New world is 'built on power, strength, and force': German Chancellor Merz tells Davos

Merz addressed the World Economic Forum in Davos, Switzerland, only hours after a major U-turn on Greenland by US President Donald Trump, who walked back his threats of using force to acquire the Arctic island that is part of NATO ally Denmark.

Trump also said that he would refrain from imposing additional tariffs on a group of European NATO allies that have opposed his takeover bid, which would have included Germany.

While the turnaround came as a major relief to European leaders, Merz used his speech at the gathering of policymakers and business elites to drive home the message that the world has entered "a time of great power politics".

Russia's invasion of Ukraine marked the beginning of "a new era, but change runs much deeper," the German leader said.

"China, with strategic foresight, has worked its way into the ranks of the great powers," Merz said.

"The United States' global pole position is being challenged, and Washington reacts by radically reshaping its foreign and security policy."

The new world order, Merz said, is "built on power, on strength, and when it comes to it, on force. It's not a cosy place."

'We do have a choice'

But Merz, who leads Europe's biggest economy, also stressed that the world was not "at the mercy" of the new order, calling on European partners to close ranks and increase cooperation to boost defence capabilities and economic competitiveness in order to prevail.

"We do have a choice. We can shape the future. To succeed, we must face harsh realities and chart our course with clear-eyed realism."

Recalling Germany's quest for world dominance that culminated in World War II, Merz said, "A world where only power counts is a dangerous place."

"Let us bear in mind, our greatest strength remains the ability to build partnerships and alliances among equals based on mutual trust and respect."

Germany 'will do more' in Arctic

Turning to the latest geopolitical upheaval, Merz welcomed Trump's U-turn on Greenland, saying, "This is the right way to go."

Germany supports talks between Denmark, Greenland and the US, Merz said, after Trump hinted at a possible agreement over Greenland following talks with NATO Secretary Mark Rutte on Wednesday evening.

But Merz did not back away from his support for Greenland's territorial integrity.

"Any threat to acquire European territory by force would be unacceptable. And ladies and gentlemen, new tariffs would also undermine the foundations of trans-Atlantic relations," he said.

However, he acknowledged that European allies "must do more to secure the high north as NATO" and vowed that Germany would ramp up its involvement in protecting the Arctic region.

"We will protect Denmark, Greenland, and the north from the threat posed by Russia. We will uphold the principles on which the transatlantic partnership is founded, namely, sovereignty and territorial integrity," Merz said.

The German leader said he welcomed the US taking "seriously" the threat posed by Russia in the region.

"We share the conviction that as European NATO allies, we must do more to secure the High North as NATO," he said. "Germany is doing just that. We are doing it in the framework of NATO, and we will do more."

According to sources, the stationing agreement for Greenland is to be revised to take into account the planned US missile defence system Golden Dome, which Trump wants to set up on the world's largest island.

In addition, the US is to be given a say in investment projects from other countries in Greenland, while greater involvement of European NATO countries is planned in the Arctic region.

EU summit in Brussels

In the lead-up to the conference in Davos, Merz sought to avoid further fuelling the Greenland row, indicating that Europeans wanted to respond to "such challenges" in a "level-headed and appropriate" manner.

Next, Merz is set to travel on to Brussels for the EU summit, which will also focus on the Greenland spat.

The chancellor is expected to be on his way there during the ceremony planned by Trump to launch his new Board of Peace, which European capitals fear as a rival to the UN.

Merz, who has been tight-lipped on potential German involvement in the board, did not touch on the issue in his address at Davos.