The meek, Jesus famously assured us, shall inherit the Earth. European policymakers’ recent pronouncements, however, suggest they profoundly disagree with the Messiah.

Barely a single speech by EU leaders or officials these days fails to emphasise Europe’s underlying strength, resilience, or solidity. Policymakers also routinely stress the importance of Europe’s robust institutions, firm decisions, and the (latent) power of its single market.

The EU’s rhetorical muscle was on full display this week, when Danish premier Mette Frederiksen mentioned the word “strong” or “strength” eight times in a speech to MEPs unveiling her country’s EU Council presidency programme. Tellingly, Denmark’s official slogan for its six-month chairmanship is: “A strong Europe in a changing world”.

Paschal Donohoe, Eurogroup president, similarly called for a “stronger and more competitive euro area” to “further enhance our resilience” and “reinforce the international role of the euro” shortly after his re-election as chair of the (genuinely) powerful forum on Monday.

Claims of Europe’s actual or potential strength are, clearly, justified in many areas. Europe does, after all, have resilient institutions; and it should harness the economic and financial power of its citizens and companies.

However, such assertions are much more controversial – and potentially disastrous – when applied to the euro itself.

Many of the problems associated with a stronger currency are already visible. The euro’s value has surged in recent months, rising more than 13% against the dollar and more than 11% against the Chinese yuan since the start of the year.

The increase is, in part, a show of confidence in the currency. Investors, concerned at US President Donald Trump’s erratic policymaking, have sought to diversify their holdings away from dollar-dominated assets. For many, Europe seems a far safer place to park their money.

Unfortunately, these exchange-rate fluctuations are also causing growing headaches for European businesses and policymakers.

First, by raising the ‘price’ of European exports relative to their American and Chinese competitors, a stronger euro has exacerbated EU exporters’ woes at a time when Trump’s sweeping tariffs and fierce Chinese competition are inflicting serious economic pain.

Second, and relatedly, a stronger currency has rendered imports into Europe considerably cheaper, thus incentivising consumers to purchase foreign products instead of domestic goods.

This latter effect is, naturally, good for ordinary citizens. But it is also disastrous for businesses, especially in export-oriented industries such as automotive and pharmaceutical manufacturing.

For policymakers, it also means that inflation, which has only recently been tamed after three years of painfully high prices, now risks undershooting the European Central Bank’s 2% target.

Exorbitant privilege – or execrable burden?

Unfortunately, these issues would likely only become even more severe if the euro eventually displaced the dollar to earn the “exorbitant privilege” of being the world’s reserve currency.

For while the dollar’s dominance has allowed the US to borrow at exceedingly low rates (owing to the massive global demand for dollar-denominated assets), it has also harmed US businesses and, arguably, contributed to America’s decades-long industrial decline.

EU braces for Trump's tariffs. The US president said on Tuesday that the bloc will "probably" receive a letter setting its new US tariff rate on Thursday. "I just want you to know a letter means a deal,” he said. (EU officials were still waiting for the letter to arrive on Friday morning.) The comments come amid growing efforts by the EU to avoid sweeping “reciprocal tariffs” on its US exports, which had previously been set to enter into force on Wednesday, but have since been pushed back to 1 August. Trump has already imposed 50% tariffs on steel and aluminium, 25% duties on cars and car parts, and a 10% levy on most other goods since his return to the White House in January. On Thursday, he announced that a new 50% levy on copper would enter into force on 1 August. Read more.

The EU must accelerate efforts to “de-risk” from China, says Ursula von der Leyen. The European Commission president said Beijing's recent export restrictions on so-called rare earths – used to manufacture smartphones, electric vehicles, and other advanced technologies – show that her flagship policy of “de-risking but not de-coupling” from the world’s second-largest economy must “speed up”. “[W]e have learnt the lesson about the extent to which dependencies are vulnerabilities,”  von der Leyen said in an address to the European Parliament in Strasbourg. “And how tech, trade and security are inherently linked. De-risking is simply a matter of European independence.” Read more.

Paschal Donohoe re-elected Eurogroup president. The Irishman received unanimous support from his fellow eurozone finance ministers just hours after Spain’s Carlos Cuerpo and Lithuania’s Rimantas Šadžius pulled out of the race to lead the powerful forum. In a statement, Donohoe pledged to be "a genuine and honest broker" who will ensure that "all voices and positions are taken into account". "It will be my task to further strengthen our common currency area and facilitate tangible progress on our key work streams during this next mandate – from budgetary coordination to the Capital Markets Union, and from the digital euro to the Banking Union," he added. Read more.

EU’s push to boost military expenditure could undermine the bloc’s financial stability, says Denmark. Stephanie Lose, Copenhagen's economy minister, told Euractiv that Europe must ramp up defence spending “very quickly” to deter Russia’s growing military threat, but warned this outlay may pose an additional “risk” to the bloc’s economy, which is already reeling from the twin impact of US tariffs and fierce Chinese competition. “At the same time as there is this unrest in the economies across the world, [we] need to boost defence spending very quickly,” said Lose, whose country took over the rotating Council presidency from Poland earlier this month. “That is a risk factor for our economies, because if we don't combine that with wise decisions on ways to a more sustainable path for public finances, then I guess it will be a problem in terms of increased debt levels and unsustainable finances." Read more.

Today's newsletter was brought to you by Thomas Moller-Nielsen.