“The decisions, the announcements by the U.S. president, have simply pushed Europe out of its pretty complacent, lethargic behavior,” said Stefan Hoops, the chief of Deutsche Bank-owned asset management arm DWS, which has over €1 trillion in assets under management. 

“You might question the method, but the outcome is that Europe is finally starting to move,” he told the Financial Times in an interview published Sunday. 

Hoops’ comments come just weeks after President Donald Trump’s so-called “liberation day” tariffs spooked the world into imagining the worst trade war in recent history. While the initial fear sparked a sell-off across major European markets, a call for reciprocal tariffs and united action around rearmament changed the tone in the region. 

Since then, the Euro has gained against the American dollar, putting it on track for its best year in two decades. The European Union vowed to take action against the U.S. if negotiations don’t pan out, and has been working on deals with other allies, including Australia and India.

Trump has mellowed down on his tariff plans over the last month, replacing the high tariffs he slapped on Europe with a flat 10% levy until July. Trade agreements with the U.K. and China have helped push European indices higher. 

Last week, Germany’s DAX index hit a record high, partly due to investors’ perceived bullishness about Europe.

“I think that people have become less optimistic on the U.S. and less pessimistic on Europe,” said Hoops. 

Jim Caron, Morgan Stanley Investment Management’s CIO, said “we do not believe the pivot toward the euro has been overstated,” according to Bloomberg. “In fact, we think it is understated and has much further to rise in value.”

Europe was seen as a laggard compared to the U.S. in terms of innovation and productivity. As Nicolai Tangen, the CEO of the Norwegian sovereign wealth fund, pointed out, some of this mentality also eeked into how Europeans approach work. 

“We are not very ambitious. I should be careful about talking about work-life balance, but the Americans just work harder,” he remarked last year.

Cultural factors aside, many market watchers are eagerly tracking a change in global order that’s putting Europe on center stage.

“Europe has always been about ability versus willingness to really compete . . . We have plenty of savings, we have great innovation, and we have fiscal space. There are lots of things we could do, we just never did them,” DWS’s Hoops said. 

Maybe all Europe needed was a crisis that could galvanize it into action.