Sweden and other countries in Europe have, ever since the energy crisis in 1973, faced the reality that their prosperity and security rest on external dependencies. The idea of Europe is linked to interdependence and describes it as essentially something good, something that will keep former enemies, notably France and Germany, together. This article follows up and reemphasises a theme introduced in an earlier Consilio insight from 2023.
The full-scale Russian invasion of Ukraine, however, has changed the conditions for independence, sovereignty, and territorial integrity, and brought to the fore the need for radical steps to diversify dependencies on a global level. The global approach is necessary both because global transports take place mainly by sea, and because the network of real-time relationships established through the internet brings us together in real time on the global level.
Looking at the problem on a European level, the underlying vulnerabilities have been accumulating for years, even before February 2022. Christine Lagarde, president of the European Central Bank, articulated this transformation with remarkable clarity in her November 2025 speech at the Frankfurt European Banking Congress. Europe’s growth model, she observed, had been geared towards a world that is gradually disappearing. The continent’s openness to globalization, once a source of resilience, had turned into a major vulnerability. The recognition that approximately one-third of European goods would continue to originate from outside the Union underscored the impossibility of complete autonomy.
Also in Sweden, the 2023 Defence Commission Report emphasized that military and civilian security of supply had become a paramount consideration. This required functioning material supply chains across all threat scenarios. Dependencies create vulnerabilities, and it was important for Sweden, as well as other European countries, to avoid excessive reliance on any single external power. This principle applies not only to China, but also the United States, which increasingly develops a transactional approach to Europe on the basis of its own interests rather than the interests of the transatlantic community.
European countries are increasingly faced by the need for a process of systematic acquisition of innovations, technical expertise, and strategic investments in enterprises and research institutions. This goes into sectoral planning with renewed force as a consideration to be considered. For instance, the Swedish Space Strategy for 2025 to 2030 illustrates this imperative of diversification. The strategy explicitly recognizes that assured access to critical capabilities requires strategic balancing between national ownership, collaborative development, and commercial procurement. Neither complete independence nor total interdependence serves national interests in the current geopolitical environment.
The Russian reset, a comprehensive decoupling from an authoritarian energy supplier, and the reduction of Swedish and European dependencies on Russia, represents the most dramatic and rapid supply chain reconfiguration in recent memory. Prior to Russia’s invasion of Ukraine, approximately 40-45% of European natural gas imports, more than 25% of all oil imports, and almost 50% of coal imports originated in Russia. The effects of the European energy crisis reverberated throughout economies across the continent. The ambition was declared that the European Union should not depend on a few external suppliers for energy management. In the long term, Europe should largely supply its own energy. This principle extended beyond fossil fuels to nuclear fuel supplies, where both Sweden and the United Kingdom committed in 2023 to exploring opportunities for resilient supply chains independent of Russian sources.
The Nord Stream Pipelines, one and two, once celebrated as a triumph of economic integration and good interdependence, has been reframed to warn about too much interdependence. By late 2023, Germany had substantially replaced Russian pipeline gas with Norwegian supplies. The transition has taken place at enormous costs. It has accelerated Europe’s pivot towards renewable energy sources and liquified natural gas from diverse suppliers, including the United States, Qatar, and North African producers.
China’s commanding position and the challenge of technological diversification, including as regards AI.
If Russia represented an energy dependency that could be reduced relatively quickly, China presents a much more difficult challenge. China has dominance across multiple strategic sectors. It controls, directly or indirectly, a vast majority of rare earth element production, and more than half of global supply according to some estimates and possesses overwhelming advantages in refining capacity. This creates dependencies that cannot be eliminated quickly. The European Commission’s identification of strategic dependencies highlights electronics, pharmaceuticals, and critical raw materials as particularly acute vulnerability points. China’s position in each sector is dominant.
In countries such as Sweden, new deposits of rare earth minerals have been discovered, but the assessments in Sweden acknowledge that extraction may require 10 to 15 years before production commences. Competing environmental interests and indigenous reindeer herding rights put severe limits on what is possible politically to accept for national authorities. The economic calculus complicating diversification in relation to China extends beyond geology. Chinese authorities are willing to undercut competitors’ pricing to render alternative sources unprofitable. American rare earth mining ventures have so far collapsed under this pricing pressure. Meanwhile, European dependence on Chinese imports has not decreased, but rather increased, particularly in clean technology sectors. Europe’s ambitious green transition has accelerated demand for Chinese products, such as solar panels, batteries, and electric vehicles.
Alternative suppliers building a diversified network beyond China.
All of this has catalysed intensive diplomatic and commercial engagement with alternative suppliers, particularly in the Indo-Pacific region. India occupies an increasingly prominent position in these efforts. With its friendly relations spanning both Western and Eastern powers, India offers geopolitical advantages in supply chain restructuring. Aggressive American efforts to put pressure on India have complicated the picture for the United States. Southeast Asian nations, such as Vietnam, Indonesia, Thailand, and Singapore, have emerged as significant actors of importance for European supply chain diversification efforts. Yet, research reveals crucial limitations. Many alternative factories remain dependent on Chinese inputs, technology, and components. It is also a question of quality, where some production sites still do not produce on the level of quality required by companies such as Apple.
An important partner with Europe in all of this is Canada. Canada’s vast mineral resources, stable democratic governance, and existing integration within Western supply chains position it as an attractive partner.
The Global South: Beyond Traditional Partnerships
The need for a deepening engagement with the Global South becomes obvious against this background. This is based on the fundamental recognition that geopolitical competition extends far beyond traditional Western alliances. Russia and China systematically cultivate relationships with governments throughout Africa, Latin America, and Asia. They offer an alternative narrative to Western liberal norms. Russian messaging emphasizes sovereignty free from Western interference. Chinese infrastructure development proceeds without democratic conditionality. Both powers present themselves as partners rather than former colonial masters.
The German National Security Strategy explicitly acknowledges this reality through its emphasis on sustainability and partnerships worldwide. The German government in 2023 articulated the need to widen trade relations through instruments ranging from crisis prevention and stabilization to sustainable development cooperation. This strategic logic extends beyond an effort to assist. Africa contains more than half of global biodiversity, and considerable freshwater resources, and as well as vast mineral deposits essential for green transition technologies. Latin American lithium reserves are critical for battery production. Southeastern Asian critical mineral deposits could partially offset Chinese dominance. Without substantial European engagement, these regions may orient increasingly towards authoritarian alternatives, offering fewer conditions and faster infrastructure development. This means less possibility for Europe to act as a partner.
Particularly when it comes to Africa, Europe needs to continue its work to create a relationship based upon mutual interest, with support to the production of industrial goods in Africa and the development of the intellectual capital available in mega-cities in Africa, which are fast developing given the increase of the population in Africa, in contrast with most other continents.
Sweden and other countries in Europe, against this background, have a need to support European strategic autonomy and reduce dependencies while recognizing that complete independence remains neither feasible nor desirable. Accelerating domestic capacity development in critical sectors while leveraging international cooperation for technologies and resources will be key. Engaging economically also with European authoritarian powers will be necessary while avoiding dependencies that could be used as a basis for hybrid warfare and pressures from abroad.
The dimension of time requires particular attention. Sweden and European policymakers must manage transitional dependencies through strategic stockpiling, diplomatic agreements, ensuring supply continuity, etc.
Lagarde’s warning resonates powerfully. Europe faces the prospect of lost growth and lost productivity that would prove not merely disappointing but irresponsible to future generations. Yet her prescription demands political courage that often does not exist.
Lars-Erik Lundin