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Cathryn Clüver Ashbrook, Senior Advisor, Sustainable Social Market Economy, Bertelsmann Stiftung, spoke at the Frankfurt Luncheon on November 28, 2025, about the future of American democracy. Find out what her key assessments are in our short interview.

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The weakening of Hezbollah, successful strikes in Lebanon and Iran, and Israel’s military dominance in Gaza have all contributed to Hamas’ eventual acceptance of Trump’s peace plan. Meanwhile, after decades of attempts to integrate Putin’s Russia into the international community of values, the mainstream consensus has shifted toward supplying Ukraine with advanced weapons, rearming its European allies, and imposing new sanctions. Is hard power becoming the new path to peace?

Ben Hodges: I’m not sure that Hamas has accepted President Trump’s peace plan. They have agreed to release hostages and are working to return the remains of those hostages who were killed or died in captivity.  There is still a lot of fighting so we can’t yet say that there is even a full ceasefire which I think will be a prerequisite for any lasting peace.  But the point of your question is valid.

Hard power, alone, is never going to be the path to peace.  But hard power, or the threat of employing it, is an essential component of achieving and protecting peace, when properly balanced with diplomatic, economic, and informational power.  Achieving peace in Ukraine starts with #1 a diplomatic effort resulting in a unified effort by the West, hopefully with the US included, acknowledging that Russia is the aggressor and recognizing that it is in the strategic interest of the West that Ukraine successfully defends its sovereignty, forcing Russia to live within its own borders.  #2 is the employment of the full weight of the economic power of the West, including sanctions, without loopholes and which are fully enforced, which will actually change Kremlin behavior.  It also includes the use of frozen Russian assets as proposed by the European Commission to help pay for Ukraine’s defense and reconstruction.  And it includes the disruption of Russia’s shadow fleet vessels which are transporting Russian oil to China and India.  #3 is the provision of all the weapons and ammunition and capabilities, without restrictions, that Ukraine needs to successfully defend its sovereignty, including Taurus and Tomahawks.

David Ranan: Europe is emerging from an era of hopeful belief in peaceful diplomacy and must now confront a new reality, with its own demands and shifting priorities. Hard power – once protected under a U.S. security umbrella that can no longer be fully relied – has, at least under the current U.S. administration, become Europe’s own responsibility. Still, the notion that hard power could serve as “the new path to peace” seems overly optimistic. Let us not forget that the Cold War, for all its tensions, nevertheless managed to preserve peace.

Neither the recognition of Palestine by several European countries nor Chancellor Merz’s show of solidarity with Israel seems to have influenced the course of the Middle East war—credit for the Israel-Hamas deal largely goes to Donald Trump. And while Europe remains a key donor to Ukraine, the country still relies heavily on U.S. weapons, with Trump sidelining it in his decisions. With all eyes on Washington, is Europe still seen as a significant player in the U.S. and the Middle East?

Hodges: I don’t agree that there is an Israel-Hamas deal yet…only the return/exchange of the hostages and Palestinian detainees. For there to be a lasting peace in the region, the nations of the Middle East, Türkiye, and Europe will have to be a part of the comprehensive effort.

Europe is only sidelined because it has allowed itself to be sidelined. A more forceful policy that uses all the elements of national and coalition power, to include sanctions and provision of security forces, will give Europe a ‘seat at the table’. Germany in particular must lead by example….defending principles of democracy and human rights while balancing its sense of historical responsibility.  Use clear language and be consistent in actions.  It cannot assume that the US, under this Administration, will take care of everything.

I do agree that the Trump Administration has done much to help bring the region to where it is now, particularly with the work it did during the first Trump Administration. But it’s going to take more to achieve the goal of a lasting peace and that means a two state solution. Europe can play a key role here.

Ranan: As Russia’s aggression intensifies, Europe concerned for its own security – has a clear self-interest in strengthening its defenses and supporting Ukraine. This is not only about helping Ukraine resist Russia but also about sending a strong message to President Putin. That is the essence of its significance. The Middle East, however, presents a far more complex challenge. Europe has long supported Israel – a stance Germany has particularly championed – but this creates a somewhat paradoxical situation, raising fundamental questions of principle: how can Europe back both Israel, an occupying power, and Ukraine, a nation defending itself against Russian aggression? If Europe were guided strictly by international law, it would instead support Palestinians resisting Israeli occupation since 1967. With Israel effectively a client state of the United States, Europe remains a secondary player in the region. Yet by moving beyond Germany’s rigidly pro-Israel position, Europe could potentially gain meaningful influence and play a more constructive role in Middle Eastern affairs.

Russia’s war on Ukraine and the situation in the Middle East are currently dominating the headlines. In your view, which other conflict or crisis is receiving too little attention?

Hodges: The US government is shifting its military priority away from Europe and apparently, possibly, the Indo-Pacific region and towards South America, especially Venezuela. I’m not against taking firm measures to stop the flow of drugs from Central and South America to the United States. Thousands of Americans every year die from Fentanyl.  But Fentanyl is actually coming from Mexico, not Venezuela. So the strikes on so-called Venezuelan drug boats with the use of expensive Hellfire missiles are not actually addressing the Fentanyl problem. This is being done without Congressional oversight and without explanation of the necessity for the use of military force to the American public.  This should receive much more scrutiny.

Ranan: The combined effects of war and climate change-induced famine in Sub-Saharan Africa are causing immense human suffering and staggering death tolls, including an appallingly high rate of infant mortality. This crisis is not only a profound humanitarian challenge for the Western world but also a matter of strategic self-interest for Europe. Ensuring that these countries – whose citizens understandably seek refuge in Europe – become safe and sustainable places to live is both a moral imperative and a practical necessity. While it may be challenging to convince China, Russia, and other global powers to act purely for Europe’s benefit, it should be entirely possible to forge an international pact grounded in humanitarian responsibility, uniting nations around the urgent need to save lives.

This interview took place after the event „David & Goliath: Debating War, Peace, and the Fragility of Global Order“ with Ben Hodges (on the left), Lieutenant General (ret.), U.S. Army; FBH Geostrat Consulting GmbH & Dr. David Ranan (on the right), Political Scientist & Author.

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Following the event, he emphasized in a video interview with Atlantik-Brücke the need for increased defense spending – specifically 5% of GDP or 3.5% for military investments – in order to meet the requirements of modern warfare, especially in the areas of cyber and space, which will be central to the future. In the past, the focus was on land, air, and sea forces, Badia said, but today cyber and space operations are crucial for dominance, which is why significant financial resources are needed for holistic capability development.

Despite the differing national interests of the 32 NATO member states, Badia emphasizes the alliance’s shared values. He describes how consensus-based decision-making is based on the search for alternatives, so that a rejection (“no”) often leads to an “alternative yes.” Over his 41-year career, the security policy landscape has changed constantly – from the Cold War to German reunification and out-of-area operations to new threat scenarios. Nevertheless, the community of values of the “free Western alliance” has always remained capable of action.

Badia is optimistic that, despite tensions between national sovereignty and common alliance interests, actions will always be taken in the interests of the West and that NATO plus its 35 partners stand on a stable, value-based foundation.

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Even though demand for digital forms of payment is growing, crypto-assets remain a niche phenomenon in the euro area, not least because of their high volatility. At a Frankfurt Luncheon on August 22, 2025, Prof. Dr. Fritzi Köhler-Geib, Member of the Executive Board of the Deutsche Bundesbank, spoke on “Crypto-assets – An alternative to a stable currency?” After the event, she was available for an interview.

Atlantik-Brücke: Ms. Köhler-Geib, you believe that crypto assets are not an alternative to a stable currency, even though their importance is growing. Could you explain what led you to this assessment?

Köhler-Geib: I look at crypto assets primarily from an IT, risk control, and research perspective. As things stand today, crypto assets are still a niche phenomenon in payment transactions. For example, Bitcoin’s blockchain currently processes an average of 450,000 transactions worldwide every day. This is due to a technical limitation. By comparison, in 2023, an average of 19 million transfers were made every day in conventional payment transactions in Germany alone. Among other things, this shows that Bitcoin, like many other crypto assets, does not fulfill the basic functions of money. Instead, they are primarily used as investment or speculation objects. Their value depends largely on market sentiment, which is why they are very volatile.

[related] Stablecoins are backed by real assets. They were introduced to reduce the problem of sharp fluctuations in value. However, stablecoins are currently rarely used in payment transactions. The reasons for this are the comparatively high transaction costs and the still limited acceptance of crypto assets as a means of payment. Possible applications arise in particular in the area of cross-border payments. Here, the costs of conventional payment transactions are still relatively high compared to domestic payments.

What specific risks do you see?

Crypto-assets can affect financial stability and monetary policy transmission. However, we currently consider the systemic risks to be limited, as the crypto markets are still relatively small and not very interconnected with the conventional financial system. However, the reserve holdings of the assets underlying stablecoins already represent a link between the crypto system and the conventional financial system. Stablecoin issuers hold these reserve holdings in order to keep the value of stablecoins as stable as possible. However, stablecoins remain subject to liquidity and credit risks.

In the event of so-called runs – i.e., when many users sell their stablecoins at the same time – contagion effects can occur. The majority of global stablecoin reserves are currently invested in short-term US government bonds, which is increasingly making individual issuers significant players in this market.

Since Donald Trump took office, the US has seen a deregulation of the previously relatively strict regulatory framework for crypto assets. Among other things, Trump wants to push ahead with the establishment of a strategic cryptocurrency reserve. How can we deal with this in Europe?

In order to identify systemic risks at an early stage, we must closely monitor the crypto markets and their interdependence with the conventional financial system. 2022 showed that even stablecoins can collapse. At that time, a loss of confidence triggered a sell-off that caused the algorithmically controlled stablecoin “TerraUSD” to collapse, costing investors billions. But even stablecoins with backed reserves are not risk-free. In March 2023, for example, the stablecoin “USDC” temporarily lost its peg to the US dollar because part of its reserve holdings were held at the insolvent Silicon Valley Bank. The EU Markets in Crypto-Assets Regulation (MiCAR) makes a significant contribution to limiting the effects on the conventional financial system.

At the Bundesbank, we are also intensifying our research on the future of finance in order to gain a better understanding of how the continued growth of global crypto markets affects financial stability and monetary policy transmission. It is also very relevant that we in the Eurosystem are working on digital central bank money – in both wholesale and retail variants – in order to continue to meet the needs of the population and banks for digital means of payment with secure government money in the future.

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