CATÓLICA-LISBON

During the Christmas season, we celebrate, with family and community, the humble birth two thousand years ago of a child who transformed the world with a message of peace and love. The exchange of gifts is a symbol of affection and care for those close to us, ideally combined with acts of charity to support those most in need. This is the spirit of Christmas: peace, charity, humility, gratitude.

Unfortunately, the year 2025 contained little of the Christmas spirit. It began in the worst possible way with the inauguration of a narcissistic and opportunistic leader in the United States, the antithesis of humility and charity. It continued poorly, with the abrupt and illegal closure of USAID, the world’s largest humanitarian agency. This was followed by the absurdity of tariffs, the deepening of internal divisions, the war on science, the hostility toward immigrants, the growth of tensions between countries, and the normalization of nationalist policies that run counter to the multilateralism that guided the previous decade.

The year ended even worse, with a growing arms race and intense speculation in U.S. financial markets, in which short term gains, based on credit, outweighed concerns with sustainability and value creation. It was a shocking year, particularly for European peoples and defenders of liberal democracy, who saw their values and the long-standing rules of global coexistence threatened, rules that had generated a prosperous society.

The year 2025 was not an anomaly, but rather the beginning of a new global geopolitical cycle to which liberal democracies will have to adapt. Dictators and “strongmen” around the world are smiling, because this is a world they know well and in which they feel comfortable. It is a world governed by the law of the strongest, and all global leaders now seek to be the strongest in their region and in the world, whether by directly controlling the economy and their citizens, by strengthening their military and security forces, or by coveting the wealth of others, in an imperialist revival of the concept of national living space.

May European leaders in 2026 have the strength and intelligence to navigate these new paths.

Curiously, global economies have shown unexpected resilience in the face of all this uncertainty and change, with global economic growth close to 3%, appreciation of most financial assets, and a significant increase in precious metals such as gold, silver, and platinum as global safe haven assets, to the detriment of the U.S. dollar.

Thus, in this context, the year 2026 will bring nothing new, but more of the same. More uncertainty, more regional and international conflicts, more nationalist policies, more arms races, more reinforcement of national self-sufficiency, more rejection of multilateralism.

At the same time, 2026 will bring everything new, with the necessary adjustment of strategy by nations that continue to follow the liberal democracy model. Europe, in particular, faces existential challenges and has important choices to make.

The following are guiding principles for the new and necessary European strategy:

· Unity creates strength: Liberal democracies will have to coordinate policies, align positions, and negotiate jointly, both on cyclical issues such as responses to tariffs or other self-interested economic policies, and on structural issues such as strategic autonomy from the U.S. defense system. To achieve strategic advances, there may be variable geometry alliances and alignments. The European Union will be a key actor in this process and should deepen its alliance with countries such as Canada, Australia, New Zealand, South Korea, and Japan, and bring into its sphere of influence other key countries such as Mexico, Brazil, South-Africa, and India. Internally, the European Union will also have to advance with feasible consensus using a logic of variable geometry, excluding countries that resist. The containment of imperialist Russia will be its primary and existential strategic objective.

· Intelligent defense of values: Liberal democracies must continue to defend the values of the previous global order, not in a dogmatic and intransigent manner, but intelligently. The rules of the rule of law, the defense of human rights, market transparency, prudent risk management, the avoidance of conflicts of interest, firm regulation in the face of corporate abuses, the promotion of sustainability and equity, and the fight against disinformation are issues that should continue to guide European policies. However, solutions and regulations cannot be naive and must recognize that the world’s major countries do not comply with them, namely the United States and China. Therefore, rules cannot apply only to European companies but must be adopted as universal rules and necessary conditions for access to the European market.

· Managing financial bloc localization: Fragmentation of the global economic system is already occurring and will inevitably lead to fragmentation of the financial system as well. The U.S. financial system is currently captured by the interests of the dominant political class and a small business elite and has ceased to be an efficient mechanism for resource allocation. Investment of European financial surpluses in the U.S. market will only reinforce U.S. power and may generate a crisis in Europe when the speculative bubble in the U.S. market bursts. As a starting point, strong tax incentives should be created to encourage European citizens to invest their savings in European assets, and the prohibition of investment in speculative assets such as most digital assets, which generate no income, should be considered. In addition, the acquisition of European companies by companies from other blocs should be strongly regulated, and European companies in strategic areas should be protected, with criteria defined for such analysis and decision models.

This will lead to controversial but necessary measures for Europe in a geopolitical context that has changed in a structural way. May European leaders in 2026 have the strength and intelligence to navigate these new paths. And may European citizens have the wisdom to elect and support the right leaders and understand that the current context may require personal and collective sacrifices to ensure the survival of Europe and of our economic and social model.

At this end of year, a positive note regarding the achievement of Universidade Católica Portuguesa being considered in 2025 the second most entrepreneurial university in the country, based on the number of businesses developed by its graduates. Católica is also the leading university in the proportion of entrepreneurial graduates. Católica Lisbon School of Business and Economics is also a leader, having renewed its triple accreditation in 2025, remaining within the group of the top 1% of schools worldwide and consolidating its position in the Financial Times global rankings with top master’s programs and executive education. I also take this opportunity to thank Rádio Renascença for the partnership in the podcast Negócios com Impacto, in which every week we highlight inspiring entrepreneurs from CATÓLICA Lisbon.

A happy year of 2026 to all.