Analysis of: EU chief says Europe needs to abandon caution after US treasury secretary calls Denmark ‘irrelevant’ – Europe live
The Guardian | January 21, 2026
The current transatlantic crisis reveals the intensifying contradictions within the Western capitalist alliance as the United States abandons multilateral pretenses in favor of naked great-power coercion. Treasury Secretary Bessent's dismissal of Denmark as 'irrelevant' exposes the hierarchy that has always structured US-European relations but was previously masked by diplomatic niceties. This rupture emerges at a moment when European capital faces multiple pressures: Chinese competition in manufacturing (particularly threatening German automakers), US demands for increased military spending, and internal divisions over trade policy with the Global South. The parallel drama over the Mercosur trade deal illuminates the deeper material stakes. German industrial capital desperately needs new markets as domestic and European demand stagnates and Chinese manufacturers gain ground. The European Parliament's decision to delay the agreement—by just 10 votes—represents the contradiction between industrial capital seeking export markets and agricultural interests fearing South American competition. Meanwhile, the German car industry laments the EU has 'weakened itself,' revealing how capitalist fractions compete for state support while demanding workers bear adjustment costs. The Greenland situation strips away liberal illusions about the 'rules-based international order.' When von der Leyen speaks of a 'world defined by raw power,' she acknowledges what Marxists have long understood: international law operates within and serves the capitalist system, not above it. The rush of Danish consumers to boycott American products and the flurry of diplomatic meetings represent responses to a fundamental shift—the US openly treating allies as subordinates in a zero-sum competition for strategic resources, Arctic shipping routes, and military positioning against Russia and China.
Class Dynamics
Actors: US state apparatus representing dominant capital fractions, European industrial capital (German automakers, exporters), European agricultural interests opposing Mercosur, European political bureaucracy (EU Commission, Parliament), Nordic states as junior partners in Atlantic alliance, Greenlandic indigenous population as objects of great-power competition, Working classes across all nations (largely absent from coverage)
Beneficiaries: US capital seeking leverage over European competitors, Military-industrial complexes in US and Europe (via increased defense spending), Extractive industries eyeing Greenland's rare earth minerals, Financial capital benefiting from market volatility
Harmed Parties: European workers facing austerity to fund military spending increases, Greenlandic people whose self-determination is treated as negotiable, South American workers and farmers caught between trade blocs, Danish and European consumers facing potential tariff-driven price increases
The article reveals a hierarchical alliance structure where the US exercises hegemonic power through economic coercion (tariff threats) while European states scramble to maintain the appearance of autonomy. Within Europe, larger industrial economies like Germany shape policy priorities (Mercosur for auto exports), while smaller states like Denmark discover their limited sovereignty when great-power interests conflict. The Greenlandic population, despite rhetorical invocations of their 'right to decide,' have no meaningful representation in these negotiations.
Material Conditions
Economic Factors: Declining European industrial competitiveness versus China, Control of Arctic shipping routes as polar ice melts, Greenland's rare earth minerals critical for green technology, Massive capital flows in defense procurement, Trade imbalances driving US protectionism, European dependence on US security guarantees
The crisis centers on competition between capitalist blocs for market access and resource control. German automakers explicitly frame Mercosur access as compensation for losses to Chinese competition—revealing how capital seeks new zones of accumulation when existing markets become contested. The defense spending increases demanded by Trump represent a massive transfer from social reproduction (healthcare, education, infrastructure) to military production, benefiting arms manufacturers while disciplining European workers. Greenland's value lies not in its productive capacity but in its strategic position and extractable resources—classic colonial dynamics wrapped in sovereignty rhetoric.
Resources at Stake: Greenland's rare earth minerals and potential oil reserves, Arctic shipping route control, South American agricultural and manufacturing markets, European consumer markets for US goods, Military base positioning rights, Control over semiconductor supply chains
Historical Context
Precedents: US acquisition of Alaska (1867) and purchase attempts on Greenland (1946, 1867), Post-WWII establishment of US hegemony over Western Europe, 1970s breakdown of Bretton Woods and emergence of dollar hegemony, EU-Mercosur negotiations spanning 25+ years of colonial-era trade patterns, NATO expansion and militarization of the Arctic
This represents the crisis of US hegemony within a declining unipolar moment. As Carney explicitly stated, the 'rules-based order' is experiencing 'rupture'—though he frames this as aberration rather than logical development. The weaponization of economic interdependence (tariffs, sanctions, financial infrastructure) marks a shift from neoliberal globalization's promise of mutual benefit to open acknowledgment that integration serves as a tool of domination. The scramble for Greenland echoes 19th-century colonial partition—great powers dividing territories for strategic and extractive value while indigenous populations are rhetorically centered but materially marginalized.
Contradictions
Primary: The contradiction between European capital's dependence on US security guarantees and its need for autonomous action to protect its own accumulation interests. Europe cannot simultaneously subordinate itself to US hegemony and compete effectively with US capital for markets and resources.
Secondary: German industrial capital needs Mercosur markets, but EU agricultural interests oppose the deal—intra-capitalist conflict paralyzes policy, Europe rhetorically defends Greenlandic sovereignty while treating the territory as a strategic asset to be negotiated, NATO members must increase military spending while their economies stagnate, requiring austerity that undermines social stability, The US demands European support against Russia while simultaneously threatening European allies with tariffs and territorial claims, European leaders call for 'engagement not escalation' while material interests push toward confrontation
These contradictions are unlikely to find stable resolution within the current framework. Possible trajectories include: (1) European capitulation and deeper subordination to US hegemony, with costs displaced onto workers through austerity; (2) Accelerated European military and industrial integration creating a more autonomous bloc capable of independent action, requiring massive capital reallocation; (3) Fragmentation of the EU as national capitals pursue separate accommodations with the US; or (4) Deepening crisis that delegitimizes both US hegemony and European institutions, creating openings for working-class political organization. The most likely near-term outcome is muddling through—rhetorical resistance combined with practical accommodation—which only delays and intensifies the underlying contradictions.
Global Interconnections
This crisis cannot be understood outside the context of inter-imperialist rivalry in a period of declining US hegemony. The aggressive posture toward European allies reflects US capital's need to extract concessions from competitors as domestic accumulation faces limits. The Arctic has become a new frontier of great-power competition as climate change opens resources and routes previously inaccessible—Greenland's 'strategic' value is inseparable from the climate crisis that capitalism has created. Meanwhile, the Mercosur negotiations reveal how the Global South remains structured into dependent relationships with imperial core nations, offering raw materials and markets while facing barriers to industrial development. The Ukraine war looms as the suppressed center of all these discussions. Rutte's insistence that 'the main issue is Ukraine' reveals how European capital has become trapped: massive resources flow to a war that serves US strategic interests (weakening Russia, binding Europe closer to US security structures) while European workers face energy costs and inflation. The peace negotiations mentioned in passing—focused on 'land deals'—suggest territorial partition that treats Ukrainian lives and sovereignty as bargaining chips, much as Greenlandic self-determination is invoked but never materially empowered.
Conclusion
The events of January 21, 2026 mark an acceleration of contradictions that have been building since the 2008 financial crisis exposed the instability of neoliberal globalization. For working people across these regions, the key insight is that neither US hegemony nor European autonomy serves their interests—both represent competing capitalist formations that will impose adjustment costs on workers while preserving elite accumulation. The Danish consumer boycotts hint at popular frustration but channel it into nationalist consumption patterns rather than class solidarity. A genuinely emancipatory response would build connections between European workers facing austerity for military spending, American workers abandoned by deindustrialization, Greenlandic communities threatened with resource extraction, and South American workers whose labor underwrites the exports both blocs seek to capture. The rupture in elite consensus creates openings—but only if working-class organizations can articulate alternatives that transcend the false choice between American and European capital.
Editorial Note: This analysis applies a dialectical materialist framework to news events. It represents one interpretive perspective and should not be considered objective reporting.
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