The so-called “collapse of European civilization” mentioned by the United States is, in fact, about defending the dollar’s hegemony.

The U.S. National Security Strategy (NSS) appears on the surface to deliver a cultural rebuke, accusing Europe of facing “civilizational erasure.” Yet the essence of that statement is neither cultural nor moral; it is financial. The report’s real subject is credit and currency. In effect, Washington is saying this: if Europe can no longer sustain itself through growth, its system becomes a threat to the credibility of the U.S. dollar.

Within the dollar-based order, the euro is not a mere regional currency. It functions as an internal credit instrument operating inside the same global settlement network as the dollar itself. The European Central Bank (ECB) is permanently linked to the Federal Reserve through swap lines, and European banks can access dollar liquidity almost at will. Therefore, every expansion of the euro money supply is not only a European monetary event but a dilution of dollar credit. It is the emergence of “shadow dollars” issued beyond the Fed’s control.

The real danger lies in how this credit is used. Europe has lost its manufacturing base and remains trapped in a low-growth structure dominated by finance, bureaucracy, and services. Newly created money is no longer directed toward productive investment but absorbed by welfare programs designed to preserve political stability. Immigration subsidies, unemployment benefits, pensions, and energy aid do not strengthen the economic core; they merely delay its decay. Thus, the euro has ceased to be fuel for growth and has become a painkiller for social fatigue.

From Washington’s perspective, this is not just Europe’s problem. Every time Europe prints euros, that liquidity seeps into the dollar clearing system. European institutions buy dollar-denominated commodities, and global investors rotate capital into euro bonds, expanding dollar circulation indirectly. When crisis arrives, the Fed must activate swap lines and supply Europe with dollars. In other words, Europe creates credit and when that credit fails, America pays the bill. European debt and welfare thus re-enter the U.S. balance sheet as a monetary burden.

This is why the NSS warning is not a mere political lecture. In monetary terms, Europe’s welfare spending represents non-productive credit expansion. That credit is never repaid through growth and remains as dead money circulating within the global settlement system. Although the euro is issued in Europe, its credibility ultimately rests on the dollar’s trust. When that credit finances consumption instead of productivity, the United States must expand its own money supply to defend the system’s overall stability. The result is predictable: the real value of the dollar erodes and domestic inflationary pressure rises—America’s worst-case scenario.

To see the mechanism clearly, one must look at the hierarchy of the dollar system. Global currencies are arranged around the dollar in layers of access. At the top tier (L1) sit the dollar, euro, yen, and pound — currencies that can be exchanged within the core settlement network without restriction. Below them (L2 and L3) are peripheral currencies like the Korean won or the Taiwan dollar, which exist outside that infrastructure. The euro, as an internal currency, requires no external demand to trade for dollars; its convertibility is built into the system. But the won, for example, can be converted only if there is a counterparty willing to take it. That privilege granted to the euro is precisely the burden shouldered by the dollar.

In short, the euro is an internal credit of the dollar system that lies beyond America’s control. Washington cannot dictate how Europe uses its money, yet when European credit over-expands and triggers a liquidity crisis, the Fed must open its swap lines and supply dollars. The more Europe prints, the more that liability boomerangs back to the United States. Hence Washington frames Europe’s welfare problem as a question of “civilization,” while in reality it sees a monetary threat embedded inside its own system.

From this logic flow two strategic options. First, to pressure Europe to shift from a welfare state to a productive growth state. Second, if Europe cannot sustain itself within the dollar architecture, to let it collapse and rebuild on new terms. The tone of the NSS suggests that Washington is already entertaining the latter. The United States no longer views Europe as a partner to protect but as an internal volatility source that undermines the dollar’s credit core.

Ultimately, this is not about geopolitical dominance but about the survival of the monetary order itself. If Europe continues its welfare-driven stagnation, unredeemed credit will keep accumulating inside the dollar system. Each rescue and swap operation pressures the Fed to monetize foreign debt, undermining its fight against inflation. This is why U.S. interest-rate control alone cannot tame prices: the inefficiency of global internal credit has become a hidden inflation engine.

JP Morgan CEO Jamie Dimon’s warning that “Europe could harm the United States” should be read in this context. He was not referring to military threats but to financial contagion. Without structural reform, Europe’s debt-driven welfare policies will distort dollar-denominated asset markets and destabilize the U.S. financial system. That erosion of trust would weaken the dollar’s global status and eventually undermine America’s own credit structure.

Washington’s strategy, therefore, is clear. If Europe is to survive, it must cut welfare spending and immigration costs while raising productivity. If growth cannot reabsorb euro-created credit, Europe will remain a consuming bloc within the dollar system — a liability rather than a partner. And the United States has no desire to finance such a structure. It would rather see Europe break and reform than drag the dollar down with it. The NSS’s talk of “civilizational decline” is, in truth, an economic signal: a warning to defend the dollar’s credit integrity by forcing a reckoning within Europe. Europe now stands at that moment of choice.