Alexander Stubb on Greenland: the good, the bad or the ugly?

Summary

Podcast Summary: The Rachman Review

Episode: Greenland: the good, the bad or the ugly?
Date: January 20, 2026
Host: Gideon Rachman (Financial Times)
Guest: President Alexander Stubb of Finland

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Overview

In a tension-filled episode recorded during the World Economic Forum in Davos, Gideon Rachman interviews Finnish President Alexander Stubb about the transatlantic crisis over US demands to take possession of Greenland, and its implications for NATO, European security, and the war in Ukraine. President Stubb, who maintains relationships with both US President Donald Trump and Ukraine’s President Volodymyr Zelenskyy, provides nuanced analysis of diplomatic options, European agency, military preparedness, and shifting world order dynamics.

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Key Discussion Points & Insights

1. The Greenland Crisis: Possible Scenarios

• Three Scenarios: President Stubb frames the Greenland situation as "the good, the bad, and the ugly."

  • Good: A diplomatic off-ramp leading to strengthened NATO Arctic security.

  • Bad: Escalation into tariffs and trade war with the US.

  • Ugly: Potential military conflict, which Stubb considers very unlikely.

    “Needless to say, as a Nordic, as a Finn, I think what the United States has proposed flies against basic international law, territorial integrity and sovereignty.”
    — President Stubb (02:55)

• European Divides:

  • One camp, including Stubb, wishes to de-escalate through diplomacy.
  • Others argue for a tougher, retaliatory line against the US, including tariffs.

• Misunderstandings: Stubb clarifies that the presence of Finnish and allied troops in Greenland was part of a joint reconnaissance mission with the US (“broken telephone” led to Trump’s misinterpretation).

  “Basically, what the soldiers from the eight countries were doing there was a mission, a reconnaissance mission that had been agreed with our allies by the United States as well… So unfortunately, this was a little bit of a broken telephone.”
  — Stubb (03:54)

• Role of Dialogue: Intensive “phone diplomacy on steroids” among allies attempts to find an off-ramp, with hopes pegged on the NATO summit in Ankara.

  “…it's always better to talk than not to talk.”
  — Stubb (05:37)

2. Transatlantic Power and European Agency

• Tariffs & Leverage:

  • Stubb rejects the notion that the US holds all the escalation power, noting the EU’s control over modern economic “warfare” tools like tariffs, trade policy, and monetary policy.

    “I would quite fundamentally dispute, disagree with that. Remember that the modern instruments of what could be called warfare or escalation, many of them are actually the exclusive competence of the European Commission..."
    — Stubb (06:49)

• Diplomacy behind Closed Doors:

  • Prefers private, “back office” diplomacy over media statements; laments that the Greenland dispute is distracting from Ukraine.

3. Ongoing War in Ukraine

• Diplomatic Progress:

  • Stubb insists Western alignment on Ukraine is stronger than a year prior; security guarantees and a “prosperity package” are more defined.

    “I would say that it's more three against one rather than two against two…”
    — Stubb (11:08)

• US Ambiguity:

  • At times, the US has sounded aligned with Russian talking points (e.g., territorial handovers) but now seeks a mediating role.

• Security Guarantees:

  • Stubb acknowledges the paradox of the US offering security guarantees to Ukraine while threatening NATO territory elsewhere, but stresses pragmatism.

    “Well, there is obviously a tension and a paradox in that, but we have to work with what we have.”
    — Stubb (13:19)

Ukraine's Resilience

• Commitment:

  • Stubb admires Ukrainians’ resolve; notes Russia's strategic failures and Ukraine's unbroken civil spirit.

    “Ukraine in my mind is unbreakable... The resolve... of the Ukrainian people is simply amazing.”
    — Stubb (13:37)

• Scenarios:

  • War of attrition continues, a peace compromise emerges, or the US withdraws (“Don’t believe in that one”).

    “Here we have three scenarios. Scenario number one is that we continue the war of attrition... The second scenario is one where we get a peace agreement... And then of course, the third and worst scenario is that the US withdraws, but I don't believe in that one.”
    — Stubb (15:14)

4. Profiles in Leadership: Zelenskyy and Trump

• Zelenskyy:

  • Praises Zelenskyy’s resilience under pressure, likening Finland’s historical experience to Ukraine’s struggle.

    “He's one of the most impressive human beings I have met throughout my life... I admire him a lot.”
    — Stubb (16:48)

• Trump:

  • Notes the importance—but limits—of personal diplomacy.
  • Says Trump’s public persona is distinct from his private side: “Sometimes he listens, sometimes no.” (18:08)

5. Europe’s Military Preparedness & Strategic Autonomy

• Finland’s Model:

  • Stubb describes Finland’s defense culture, extensive reserves, and readiness; positions compulsory service as a backbone of national defense.

    “We didn't drop our guard... we have obligatory military service, about a million that have done it... biggest artillery in Europe, together with Poland.”
    — Stubb (20:00, paraphrased)

• Welfare State and Defense:

  • Asserts that societal welfare and strong defense aren’t mutually exclusive.

    “We have a very good welfare system. Of course, as always, it can be improved. It has always coexisted with military expenditure...”
    — Stubb (22:28)

• European Defense Dependence:

  • Recognizes Europe’s reliance on the US but sees positive trends toward more self-reliance.

    “I still think that it is in the geopolitical and military interests of the United States to stay engaged in Europe. And I still think that they will do it. I don't see any signs of major withdrawals.”
    — Stubb (23:49)

6. Three Priorities for Europe

• Boost Defense:
  • Industrial and capability upgrades.
• Diversify Trade:
  • Expand global agreements, balance engagement with China.
• Sustain Liberal Order:

  • Europe as an agent of multilateralism amid global multipolarity.

    “Europe still believes in the liberal world order and in multilateralism...”
    — Stubb (25:53)

7. On Optimism & World Order

• Stubb expresses guarded optimism, likening the current era of flux to historic world order transitions, and stresses the need to give the Global South more agency for multilateralism to succeed.

  “The most difficult time to maintain optimism is when the world order is changing... As they did after World War I, the League of nations wasn't strong enough. But after World War II, multilateralism won the day...”
  — Stubb (26:57)

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Notable Quotes & Memorable Moments

• The Core Greenland Choices

  “There’s three scenarios on Greenland. It’s the good and the bad and the ugly... among allies, you should be able to discuss things diplomatically rather than coming on with full force.”
  (President Stubb, 02:19–02:55)

• On Diplomacy:

  “Phone diplomacy on steroids.”
  (President Stubb, 04:52)

• Pragmatism:

  “We in Finland are very pragmatic, so we try to deal with a world that exists, not a world that we would like to exist.”
  (President Stubb, 18:08)

• Finnish Defense Ethos:

  “We have the biggest artillery in Europe, together with Poland. And as I always say, we don't have it because we were worried about Sweden.”
  (President Stubb, 20:44)

• On Optimism and Historical Change:

  “The most difficult time to maintain optimism is when the world order is changing... Don't get anxious about this shift... that world is over.”
  (President Stubb, 26:57–28:44)

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Timestamps for Key Segments

• Greenland crisis scenarios: 02:19–03:45
• Misunderstandings over troops: 03:54–04:31
• Diplomatic strategy for de-escalation: 04:52–06:32
• EU leverage and tariffs: 06:49–07:23
• Ukraine war diplomatic status: 10:18–12:36
• Ukraine’s resilience & Russian failures: 13:37–15:09
• Finnish defense approach and societal model: 19:43–23:21
• Europe-US security imbalance: 23:21–25:13
• Three priorities for Europe: 25:13–26:57
• Optimism and global order transitions: 26:57–28:44

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Tone and Language

• Rachman: Analytical, probing, slightly dry humor.
• Stubb: Candid, diplomatic, occasionally self-deprecating, pragmatic, and optimistic.

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Summary

This episode provides a frank, insightful look at the intersection of US-European relations, Arctic geopolitics, and the ongoing war in Ukraine. President Stubb advocates for diplomatic de-escalation in the Greenland crisis, argues for European agency, highlights lessons from Finland’s defense posture, and urges Europe to seize its moment amid global shifts. Throughout, he balances realism with a measure of optimism about international cooperation and multilateralism, even as the era transitions away from the certainties of the post–Cold War order.

Transcript

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[Gideon Rachman]

Hello and welcome to the Rachman Review. I'm Gideon Rachman, chief foreign affairs commentator of the Financial Times. This week's podcast is an interview with President Alexander Stubb of Finland. We spoke on Monday evening in Davos at the opening of the World Economic Forum. Our discussion took place at a time of enormous tension between the United States and its European allies following Donald Trump's repeated insistence that that the US Must take possession of Greenland. So can transatlantic relations be saved? There are a lot of world leaders here in Davos. President Trump himself is due to speak on Wednesday, but he's already caused shock and dismay among European delegates with his comments on Greenland.

[President Alexander Stubb]

We have to have it. They have to have this done. They can't protect it. Denmark, they're wonderful people and I know the leaders are very good people, but they don't even go there.

[Gideon Rachman]

Meanwhile, Russia's offensive against Ukraine continues.

[President Alexander Stubb]

President Volodymyr Zelenskyy says several hundred thousand people in and around Kyiv are without power today after another Russian missile strike. Parts of the capital have been without heating and electricity, in fact for several days now and in sub zero temperatures.

[Gideon Rachman]

President Stubb of Finland is one of the few world leaders who has a close relationship with both Donald Trump and Volodymyr Zelenskyy. He famously played a round of golf with Trump at Mar a Lago and he's in regular touch with the U.S. president. So I was eager to hear what he makes of the current situation. I interviewed him on stage at a hotel in Davos at a meeting organized by the Finnish Chamber of Commerce. I started by asking President Stubb about the crisis over Greenland. How does he see it playing out?

[President Alexander Stubb]

Well, I think there's three scenarios on Greenland. It's the good and the bad and the ugly. So the good basically means that we find an off ramp, we find a process, and at the end of that process we will have strengthened NATO's presence in Arctic security and perhaps the time to announce that would be the NATO summit in Ankara. The bad one is that the situation escalates. We get into some kind of a tariff war with the United States and trade war and we go from bad to worse. And of course, the ugly scenario is basically military, which I personally don't believe will take place. Now, my take is that there are two kind of camps in Europe right now. One is a group to which I include myself, that wants to de escalate, that believes that dialogue and diplomacy should still work on this, and then another one which says, well, we need to be tough, so we need to take measures on tariffs and other things, and probably we're going to end up somewhere in between. Because, needless to say, as a Nordic, as a Finn, I think what the United States has proposed flies against basic international law, territorial integrity and sovereignty. And among allies, you should be able to discuss things diplomatically rather than coming on with full force.

[Gideon Rachman]

And Finland was one of the countries that Trump singled out for these new tariffs because you had sent troops to Greenland. Do you regret doing that now?

[President Alexander Stubb]

Well, no, because I think there's a little bit of a misunderstanding. Basically, what the soldiers from the eight countries were doing there was a mission, a reconnaissance mission that had been agreed with our allies by the United States as well. And the idea was basically to suss out what kind of a training mission should we have together. And that training mission is called Arctic Endurance, and it has eight different parts, and the United States are parts of that as well. So, unfortunately, this was a little bit of a broken telephone.

[Gideon Rachman]

So you think President Trump misinterpreted what was going on?

[President Alexander Stubb]

I think there have been a lot of misunderstandings in this process, and hopefully we can sort them out during the Davos week.

[Gideon Rachman]

Okay, so you mentioned these three scenarios. De escalation, the escalation, and the worst one, warfare. You say you're on the side of de escalation. Can you flesh out for us what that would look like? How do we get off this very kind of dangerous situation we're in now?

[President Alexander Stubb]

Well, you kind of need to do two things. The first one is to have an open dialogue. And of course, this weekend, you can imagine, has been phone diplomacy on steroids. So we've been talking with everyone among the allies and European leaders. As you mentioned, we've been messaging with President Trump directly as well, and that is basically to find a process on what to deal with. And while we do that, I think it's very important that the European Union and the European Council, which meets on Thursday night, will have a look at different types of measures which will increase incentives to de escalate for the US And I'm still optimistic that we can find our way out of this impasse diplomacy is never easy, but it's always better to talk than not to talk.

[Gideon Rachman]

And can you give us a sense of what kind of proposal might work for both sides? Because it sounds like the problem is Trump is very unequivocal. He wants to own Greenland.

[President Alexander Stubb]

Yeah, it depends on which side of the scale you go on this. You have one camp which says that this is a security issue. I want to believe and want to be in that camp. How do we increase Arctic security through NATO and NATO presence and U.S. troops, which for all intents and purposes, can already be there. The 1951 agreement that Denmark, Greenland and the United States has basically gives a free hand for the US to have its military there. And then the other camp is the sovereignty camp. And I think we need to try to find an off ramp and package this into a good one. It's not an easy case, I have to admit. It's probably the most difficult case that I've had since I started in office two years ago.

[Gideon Rachman]

And you said that at the European Council, they'll be discussing how Europe might react. And you seem to suggest it's inevitable that of course you will have to discuss tariffs. But there are those, I think, in America who think, you know, Europe doesn't have much it can do that America has escalation, dominance.

[President Alexander Stubb]

I would quite fundamentally dispute, disagree with that. Remember that the modern instruments of what could be called warfare or escalation, many of them are actually the exclusive competence of the European Commission and the European Union customs. So basically tariffs, trade, also actually monetary. So there are a lot of decisions that can be done together which could then be an incentive to de escalate. So in this particular case, I would argue that Europe has a lot of the cards.

[Gideon Rachman]

And do you need to use the kind of language of escalation? Do you need to perhaps escalate to de escalate? Do you need to show a threat?

[President Alexander Stubb]

Well, I prefer to do that actually, behind the scenes. And I think one of the problems is that modern diplomacy is quite often conducted, and especially in today's world, through the international media and statements. And sometimes it's, you know, good to keep your hand off the phone, at least texting, and instead do it face to face or have a conversation. And that's what I try to do a lot with the Prime Minister of Norway, Jonas Gar Sture. We feel that we're very much in the back office. One of my big worries for the Davos week is that Greenland will dominate and take all the oxygen out of the dialogue here. It's a super important question. I don't deny that. But don't forget that we have an ongoing war in Ukraine and we should not lose momentum on that either. So there are many different balls in the air in international relations right now, and especially during this week.

[Gideon Rachman]

Yeah, and you are absolutely right. And I will come to Ukraine in a minute because, as you say, one of the dangers of this whole Greenland obsession is that it distracts attention from a very serious issue there. But just a couple more Greenland questions before we go to Ukraine. You said that you're on the de escalatory side. I think we can see France, for example, is talking tough. If Trump isn't persuaded to go for a package deal now and the US Goes ahead with these tariffs, do you think it's inevitable that Europe would then respond with tariffs?

[President Alexander Stubb]

I don't want to speculate about the future, but of course, over the weekend I've been speaking and messaging with Secretary General of NATO, President of the European Commission, with the President of France, with the Chancellor of Germany, with the Prime Minister of the UK And I think the sentiment is very much that we need to prepare for the worst scenario. But I think there's one element that I still want to bring into this without meddling into US Domestic politics, and that is that I think the Senate has a big say in this. And I think it's important when we work diplomatically towards de escalating, that we also communicate with the Senate. So, you know, I'm carefully optimistic that we'll find a solution and common sense will win at the end of the day.

[Gideon Rachman]

And final question on the last scenario, which you think is very unlikely, military intervention in the last resort, Europe would have to defend its territory, wouldn't it?

[President Alexander Stubb]

I don't want to go there, to be honest. It's a question too big to answer, especially on the base of speculation. And I think all that I hear from the US Administration is that we're not going to go to that point.

[Gideon Rachman]

Okay. Well, there is a place where, as you pointed out, there is a major war raging, which is Ukraine. And the news from there this week is pretty disturbing. I mean, people in Kiev are sitting in sub zero temperatures without power. First of all, do you think, in a sense, the west is doing Putin's work by fighting amongst themselves?

[President Alexander Stubb]

Well, I still feel that we are actually in a much better place as far as Ukraine is concerned than we were just a year ago. And I don't want to rewind the whole process, but I would say that there's been A sequence of cities that have played a role. Geneva right after the G20 meeting where the national security advisors met, then Berlin, where I was on the leaders level, and also Paris on the leaders level. And I feel that we are now on the same page, especially with the United States. And I would like to give credit, actually to Jared Kushner, who's been very influential in particular putting things down on paper and finding practical solutions. And I think the takeaway from Paris on the 5th of December was that we now have security guarantees. We're on the same page with the prosperity package, and we're working on the 20 point plan. So I would say that it's more three against one rather than two against two. And by that I mean to say that the three of us are on the same page, but we don't know what Russia is going to respond.

[Gideon Rachman]

The three being the U.S. the EU.

[President Alexander Stubb]

And Ukraine, or actually, I would put it as the coalition of the willing, because I want to keep Canada, Norway and other important players in there.

[Gideon Rachman]

And yet it seemed a couple of times in the past year that America had suddenly adopted a very pro Russian position or a position that reflected Russian talking points, particularly on territorial handovers, including territory that Ukraine still occupies. Is that definitively off the table?

[President Alexander Stubb]

Well, I think the United States sees itself very much as a mediator in this war, and that has then been reflected in some of the statements. And we all know that really, at the end of the day, the deal will come based on security guarantees linked somehow to the territorial component. Right now we're working on what I call five plus two documents. So five are the ones that have been basically negotiated between the Americans and the Ukrainians with some kind of Russian involvement, and then 2,5 from the European side. I feel that we are in a fairly good place with these documents, but I'm just worried that we're losing a little bit of momentum. So that's why I think it would be very useful if President Trump and President Zelensky met here in Davos this week to push the dossier a little bit further.

[Gideon Rachman]

Are you sure it'd be useful? Their meetings don't always go so well.

[President Alexander Stubb]

Well, they've been going quite well lately. So, you know, again, I come back to the point that it's better to talk than not to talk. And a lot of the meetings that I have either participated in with the President and with Zelenskyy or with the European leaders and Zelenskyy or with the European leaders and Trump, most of them have actually gone quite well. And at the end of the day, we found a solution. Even after Alaska, you know, that's when we started focusing on security guarantees. And you know, who would have thought that the US is committed to monitoring a ceasefire and then giving a backstop to security guarantees? Who would have believed that only four or five months ago?

[Gideon Rachman]

But can we really believe those security guarantees at the same time that the US is threatening the territory of another NATO state?

[President Alexander Stubb]

Well, there is obviously a tension and a paradox in that, but we have to work with what we have.

[Gideon Rachman]

What about the situation on the ground in Ukraine? I mean, I can see you think diplomatically things are a lot better than they could have been. But as I say, people are in sub zero temperatures without power in Kyiv. Russia's really trying to break Ukraine.

[President Alexander Stubb]

Ukraine in my mind is unbreakable. And we've seen that during the four years. The resolve and what we would say in Finnish, the cease war perseverance of the Ukrainian people is simply amazing. From a civilian perspective, it's tragic. We can never spin it into something positive. But from a military perspective, keep in mind that in the past 1,000 days, Russia has advanced less than 1 percentage point of Ukrainian territory. Now this is a war of attrition with a horrific cost. With over 1 million people either dead or wounded, it's a high cost to pay for a war of attrition. Then if I look at some more silver linings, the Russian economy is not doing well. Interest rates, inflation in double digits, zero growth for this year, no perspective of a better future. On the economic side, this doesn't mean that they won't be able to continue to conduct the war. They will, but at the same time, they've also run out of reserves. And finally, one thing that we quite often forget, if you look at the strategic aims of Putin, he has failed in all of them. He hasn't been able to to Russify Ukraine. It's actually going to become a member of the European Union. He wasn't able to contain NATO enlargement. He pushed Sweden and Finland into NATO and while doing that, he increased NATO's defense expenditure to 5%. So, you know, things are not looking that good from the Russian perspective, as tragic as it is from a Ukrainian perspective as well.

[Gideon Rachman]

But in a war of attrition, doesn't Russia, the larger country in the end, have the advantage?

[President Alexander Stubb]

They have the advantage. But then it depends on for how long the war drags out. And here we have three scenarios. Scenario number one is that we continue the war of attrition this year, right now if you look at drones, if you look at air defense, Ukraine is doing better. And we continue to support and supply Ukraine with more ammunition and military equipment and finance. And we have guaranteed the finance of Ukraine for two years through the European Union. The second scenario is one where we get a peace agreement which have to remind everyone it'll always be a compromise. I still think it will be at the end of the day, a worthwhile compromise. And then of course, the third and worst scenario is that the US withdraws, but I don't believe in that one. So let's work for the second one.

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[Gideon Rachman]

You are in an unusual position of being a good friend of both Trump and Zelenskyy. How do you find him? He's under enormous pressure. He's under pressure to have an election. He's had to get rid of his chief of staff with a corruption scandal. How do you find him?

[President Alexander Stubb]

He's one of the most impressive human beings I have met throughout my life, and I've met quite a few, including a lot of world leaders. For someone to be able to sustain this type of pressure, which has come obviously from Russia, militarily, politically from inside his country, and then sometimes also from the United States, and still keep his marbles and be able to conduct the type of warfare that they've been doing. I admire him a lot. So that's why I feel that I, as a Finn in a country that has had a similar experience in the Winter War and the War of Continuation, have an obligation to work with him as closely as I possibly can and in so many different ways. It's not only about, you know, financial or military support. It's also about mental support and conversations and trying to find different ways out of difficult situations. So what I find that we need to do in the back office in Finland or in Norway is to help interpret Zelenskyy to Trump, Trump to Zelenskyy, and both to our European friends. But I have a lot of admiration for what Zelenskyy has been doing over the years.

[Gideon Rachman]

And President Trump, I mean, everybody's very intrigued by your relationship with him. You played golf with him, you text with him, you talk with him from a distance. He seems like a very volatile, very unreasonable guy. But how do you speak him?

[President Alexander Stubb]

Well, first of all, I come from a small country, so if I'm able to forge a personal relationship with the president of the strongest country in the world, I see that as a bonus in diplomatic relations. At the same time, I under no circumstance want to inflate my relationship. I'm glad I'm able to talk, I'm glad I'm able to text. But this doesn't mean that he listens. Sometimes yes, sometimes no. And I think, just like with everyone, the person that you see behind the cameras is very different from the person that you see in front of the cameras. We in Finland are very pragmatic, so we try to deal with a world that exists, not a world that we would like to exist.

[Gideon Rachman]

What about you talk to the Ukrainians, you talk to Trump. Should we be talking more to the Russians? Because some people say, look, we've left all the talking to the likes of Kushner and Witkoff. Europeans should be going to Moscow. Others say, no, that would be a terrible mistake. What do you think?

[President Alexander Stubb]

Yeah, well, it's hard to say. I mean, we've been talking about this for the past two years with our European colleagues, and I think President Macron has taken the lead in this, and our thinking is that if and when we begin a dialogue with Russia and with Putin, it should be coordinated. So this can't be one of these solo affairs. So that conversation will have to start at some stage. And, of course, I say this as someone who comes from a country with 1340km of border with Russia, and that border is not going to go away. We'll make sure that it won't go away.

[Gideon Rachman]

Yeah. And indeed, I mean, Finland is, I think, unusual in a European context, in that you've never kind of dropped your guard, you didn't demilitarize. You, I think, have, if you can't reserve it, something like 500,000 people, you could summon.

[President Alexander Stubb]

Yeah.

[Gideon Rachman]

Should Europe be doing more of that now?

[President Alexander Stubb]

Well, I mean, obviously, I do think that Europe should be more Finnish, but I fully understand this is not an imperialistic statement. And all the Finns in the audience are now laughing just for the podcast listeners. So, I mean, I'll say once more, we didn't drop our guard. We still have obligatory military service, about a million that have done it, about 280,000 that we can mobilize at wartime. We have Arctic expertise. We have 62 F18s, just bought 64 F35s. We have long range missiles, air, land and sea. We have ammo stored for a long time. And on top of that, we actually have the biggest artillery in Europe, together with Poland. And as I always say, we don't have it because we were worried about Sweden.

[Gideon Rachman]

No, quite. But Mark Rutter, for example, the Secretary General of NATO, has begun to talk in really quite hesitant to say alarmist terms. He seemingly knows what he's on about, but he said that we have to start thinking that our generation may have to fight wars in the way that generations before us did.

[President Alexander Stubb]

Is that correct? Well, I think the classic take is basically to say that prepare for the worst in order to avoid it. So what we try to do is to have a strong defense as part of the alliance and also as part of the European Union, to make sure that there's no incentive for a country like Russia to invade, that the alternative cost is simply too high. And you know, in my capacity as commander Chief, I'm in the fortunate position that I basically have the most core information of anyone in our system, beginning from our military operations to our security of supply to our border guards, et cetera, et cetera. And the more I listen to our authorities and the more I see them in action, for instance in the Baltic Sea with cables going down, the better I sleep my night. So I think we're very well prepared because we have this concept of comprehensive security. If the electricity goes down, we know what to do. If telecoms goes down and networks go down, we. We know what to do. We have a security of supply of food. And I do think that a lot of other European countries are doing a lot of field trips to Finland to look at how we do things. And I think it's a healthy development.

[Gideon Rachman]

And also I think that maybe one thing that you've demonstrated is that you can do all this and still have a welfare state. You don't have to pour all your money into the military and give up on the European social model.

[President Alexander Stubb]

No, definitely. We have a very good welfare system. Of course, as always, it can be improved. It has always coexisted with military expenditure. But I think it's also about a defense culture. And I do think that the fact that we have conscription or obligatory military service, it sort of ingrains into our backbone and DNA what it means to be Finnish, what it means to defend your country. 80% of Finns are willing to defend their country. This is colossal if you compare to anywhere else in the world, except perhaps Israel.

[Gideon Rachman]

I read in Italy it was 17%.

[President Alexander Stubb]

Yeah, 17 in Italy. So it's a little bit different then. We have 80% approval ratings for NATO membership, and then we have 80% of the population that are willing to send Finnish troops to international missions. So I think it's sort of ingrained in our system, and that's the strongest defense that you can have.

[Gideon Rachman]

And yet, I mean, I think one of the links between the crisis we have in Greenland, the crisis we have in Russia is this sense that Europe's ability to say no or to push back against the United States when it's been unreasonable is undermined by the fact that we are still so dependent on the US For European security. Just as a hypothetical, if things broke down in NATO and there was much less American defense in Europe, could Europe hold off Russia on its own?

[President Alexander Stubb]

Well, I just want to remind everyone gently that we were not members of NATO. We only became members on the 4th of April, 2023. So we always felt that we had a strong and independent defense. And now if you look at the way in which all Europeans are taking more responsibility, I believe that we're moving to a better direction. At the same time, I don't like the hypothetical because, as you know, I'm an avid pro European, avid pro American and transatlanticist. And I still think that it is in the geopolitical and military interests of the United States to stay engaged in Europe. And I still think that they will do it, and they continue to do it. I don't see any signs of major withdrawals. And I think the biggest, basically dependence on our side and American security comes more actually from the military stuff than from the military staff. There's a big difference there. But I think it's in our vested interest to make sure that we can continue together. And that's why I keep on saying that we need to nurture the transatlantic relations relationship. At the same time, we need to understand that the world is changing and America is changing, so we need to take more responsibility ourselves. This is in many ways Europe's moment. So the current administration is pushing Europe to take more responsibility for itself. And I don't mind that. I think that's a good trend as well.

[Gideon Rachman]

So, as a convinced European, what are the three things that the Europeans should be doing?

[President Alexander Stubb]

Well, the first thing we need to do is we need to hike up our defense. And for me, Europe helps through the industrial base. A lot of people are here. It also helps to push the capabilities of European and NATO states, whereas NATO then takes care of the core security. The second one is actually to diversify your trade portfolio. And that's what Europe is doing right now. We believe in trade rules, multilateral. But now we have over 40 trade deals, the latest one signed with Mercosur, with over 70 countries in the world. And given that we are almost 30 in the EU, that's half the world countries that are in trade agreements with us. And this also means actually leaning a little bit more towards China. So we're going to start seeing Europe playing a game. And if you want to package into a big frame, which I'll try to do, I think Europe still believes in the liberal world order and in multilateralism, whereas there are bigger players in this world, like the United States, like Russia, like China, that look more for a multipolar and transactional world. And then the rest of the world, the Global south and otherwise, are looking okay, who do I want to play ball with? And they now have a choice. They don't want to make a direct choice. They'll probably do both. But this means that Europe needs to be a hell of a lot more humble going south, which is a theme.

[Gideon Rachman]

That you've written about in your book. And I think one of the things that struck me, reading the book and knowing you over many years, is that you're pretty optimistic person, somebody who believes that things can improve, are improving. Can you maintain your optimism in this current situation?

[President Alexander Stubb]

Well, I think the most difficult time to maintain optimism is when the world order is changing. And I do think that you and I and our listeners are going through a generational moment similar to 1918 after World War I, 1945 after World War II, or 1989 after the Cold War. And we can get it wrong. As they did after World War I, the League of nations wasn't strong enough. But after World War II, multilateralism won the day and the UN was created, which for all intents and purposes was able to maintain peace. But then in 1989, I think we got a little bit intellectually lazy. We sort of believed in this Kantian determinism that everyone will fall in love with democracy and free markets and globalization. But that didn't happen. And now we're back into this sort of tug of war between multipolarity and multilateralism. And in my mind, we have to give agency to the Global south in order for multilateralism to win the day. It'll take a few years. You know, I think the order will start settling about 20, 30. We don't know what it's going to look like, but it's going to take a few years and then usually those orders, they last two decades, as it did after World War I, they last four decades, as it did after World war II, or they last three decades as it did after the Cold War. So don't get anxious about this shift. It feels uncomfortable for us international liberals who believe that we were only looking at technological advancements, green fields, peace signs and rainbows. That world is over.

[Gideon Rachman]

That was President Alexander Stubb of Finland ending this edition of the Rachman Review. Thanks for listening and please join me again next week. Thinking long term about your investment career? Hear stories, advice and lessons from seasoned leaders at Capital Group on the Capital Ideas podcast. Subscribe and start listening today. Published by Capital Client Group, Inc. Hi.

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