“Europe has a real problem,” Dimon said Saturday at the Reagan National Defense Forum. “They do some wonderful things on their safety nets. But they’ve driven business out, they’ve driven investment out, they’ve driven innovation out. It’s kind of coming back.”

While he praised some European leaders who he said were aware of the issues, he cautioned politics is “really hard.” 

Dimon, leader of the biggest US bank, has long said that the risk of a fragmented Europe is among the major challenges facing the world. In his letter to shareholders released earlier this year, he said that Europe has “some serious issues to fix.”

On Saturday, he praised the creation of the euro and Europe’s push for peace. But he warned that a reduction in military efforts and challenges trying to reach agreement within the European Union are threatening the continent.

“If they fragment, then you can say that America first will not be around anymore,” Dimon said. “It will hurt us more than anybody else because they are a major ally in every single way, including common values, which are really important.”

He said the US should help.

“We need a long-term strategy to help them become strong,” Dimon said. “A weak Europe is bad for us.”

The administration of President Donald Trump issued a new national security strategy that directed US interests toward the Western Hemisphere and protection of the homeland while dismissing Europe as a continent headed toward “civilizational erasure.”

Read More: Trump’s National Security Strategy Veers Inward in Telling Shift

JPMorgan has been ramping up its push to spur more investments in the national defense sector. In October, the bank announced that it would funnel $1.5 trillion into industries that bolster US economic security and resiliency over the next 10 years — as much as $500 billion more than what it would’ve provided anyway. 

Dimon said in the statement that it’s “painfully clear that the United States has allowed itself to become too reliant on unreliable sources of critical minerals, products and manufacturing.”

Investment banker Jay Horine oversees the effort, which Dimon called “100% commercial.” It will focus on four areas: supply chain and advanced manufacturing; defense and aerospace; energy independence and resilience; and frontier and strategic technologies. 

The bank will also invest as much as $10 billion of its own capital to help certain companies expand, innovate or accelerate strategic manufacturing.

Separately on Saturday, Dimon praised Trump for finding ways to roll back bureaucracy in the government.

“There is no question that this administration is trying to bring an axe to some of the bureaucracy that held back America,” Dimon said. “That is a good thing and we can do it and still keep the world safe, for safe food and safe banks and all the stuff like that.”

Hegseth dismissed criticism of the strikes, which have killed more than 80 people and now face intense scrutiny over concerns that they violated international law. Saying the strikes are justified to protect Americans, Hegseth likened the fight to the war on terror following the Sept. 11, 2001 attacks.

“If you’re working for a designated terrorist organization and you bring drugs to this country in a boat, we will find you and we will sink you. Let there be no doubt about it,” Hegseth said during his keynote address at the Reagan National Defense Forum. “President Trump can and will take decisive military action as he sees fit to defend our nation’s interests. Let no country on earth doubt that for a moment.”

The most recent strike brings the death toll of the campaign to at least 87 people. Lawmakers have sought more answers about the attacks and their legal justification, and whether U.S. forces were ordered to launch a follow-up strike following a September attack even after the Pentagon knew of survivors.

Though Hegseth compared the alleged drug smugglers to Al-Qaida terrorists, experts have noted significant differences between the two foes and the efforts to combat them.

Hegseth’s remarks came after the Trump administration released its new national security strategy, one that paints European allies as weak and aims to reassert America’s dominance in the Western Hemisphere.

During the speech, Hegseth also discussed the need to check China’s rise through strength instead of conflict. He repeated Trump’s vow to resume nuclear testing on an equal basis as China and Russia — a goal that has alarmed many nuclear arms experts. China and Russia haven’t conducted explosive tests in decades, though the Kremlin said it would follow the U.S. if Trump restarted tests.

The speech was delivered at the Reagan National Defense Forum at the Ronald Reagan Presidential Foundation and Institute in California, an event which brings together top national security experts from around the country. Hegseth used the visit to argue that Trump is Reagan’s “true and rightful heir” when it comes to muscular foreign policy.

By contrast, Hegseth criticized Republican leaders in the years since Reagan for supporting wars in the Middle East and democracy-building efforts that didn’t work. He also blasted those who have argued that climate change poses serious challenges to military readiness.

“The war department will not be distracted by democracy building, interventionism, undefined wars, regime change, climate change, woke moralizing and feckless nation building,” he said.

Publicly held debt is already at 99% of GDP and is on track to hit 107% by 2029, breaking the record set after the end of World War II. Debt service alone is more than $11 billion a week, or 15% of federal spending in the current fiscal year.

In a Project Syndicate op-ed last week, Frankel went down the list of possible debt solutions: faster economic growth, lower interest rates, default, inflation, financial repression, and fiscal austerity. 

While faster growth is the most appealing option, it’s not coming to the rescue due to the shrinking labor force, he said. AI will boost productivity, but not as much as would be needed to rein in U.S. debt.

Frankel also said the previous era of low rates was a historic anomaly that’s not coming back, and default isn’t plausible given already-growing doubts about Treasury bonds as a safe asset, especially after President Donald Trump’s “Liberation Day” tariff shocker.

Relying on inflation to shrink the real value of U.S. debt would be just as bad as a default, and financial repression would require the federal government to essentially force banks to buy bonds with artificially low yields, he explained.

“There is one possibility left: severe fiscal austerity,” Frankel added.

How severe? A sustainable U.S. debt trajectory would entail elimination of nearly all defense spending or almost all non-defense discretionary outlays, he estimated.

For the foreseeable future, Democrats are unlikely to slash top programs, while Republicans are likely to use any fiscal breathing room to push for more tax cuts, Frankel said.

“Eventually, in the unforeseeable future, austerity may be the most likely of the six possible outcomes,” he warned. “Unfortunately, it will probably come only after a severe fiscal crisis. The longer it takes for that reckoning to arrive, the more radical the adjustment will need to be.”

The austerity forecast echoes an earlier note from Oxford Economics, which said the expected insolvency of the Social Security and Medicare trust funds by 2034 will serve as a catalyst for fiscal reform.

In Oxford’s view, lawmakers will seek to prevent a fiscal crisis in the form of a precipitous drop in demand for Treasury bonds, sending rates soaring.

But that’s only after lawmakers try to take the more politically expedient path by allowing Social Security and Medicare to tap general revenue that funds other parts of the federal government.

“However, unfavorable fiscal news of this sort could trigger a negative reaction in the US bond market, which would view this as a capitulation on one of the last major political openings for reforms,” Bernard Yaros, lead U.S. economist at Oxford Economics, wrote. “A sharp upward repricing of the term premium for longer-dated bonds could force Congress back into a reform mindset.”