Europe has entered a new era with new challenges

The EU is as much a dream as it is a political and economic union. Like all dreams, it needs a periodic reality check, as it is a unique experience in human history. Developments in recent years, both political and economic, have served as a wake-up call to the need for renewal, forcing the EU to assess how it can defend its interests while preserving its values in a world that is increasingly antithetical to them. And to do so, it has refocused on several priority areas for strengthening and ensuring it remains sustainable deep into the 21st century.

There is an ever-present challenge to create a high level of uniformity within this 27-state union in terms of values and direction, while also maintaining fairness with the benefits they all enjoy and the contributions they all make. The EU was built to a large extent on a best-case scenario of an ever-growing economy, while its members were not engaged, at least directly, in war or conflict. From humble beginnings, it became a union of 27 countries, despite losing a powerful member due to Brexit, and now represents the world’s largest exporter of manufactured goods and services while itself being the biggest export market for around 80 countries.

However, this has neither guaranteed it indefinite prosperity nor security. In recent years, the constantly rising cost of living, housing shortages, sluggish economic growth, a slow transition to a digital and green world, and failure to tackle migration have all taken their toll. In terms of security, the Russian invasion of Ukraine shifted attention to the security of member states, forcing them to allocate huge resources to their defense budgets, which, when accompanied by slow economic growth, has broader implications beyond just defending the realm.

EU officials agree the emphasis must be on economic growth

Yossi Mekelberg

In private meetings, EU officials admit that in 2026 the emphasis must be on economic growth if it is to sustain the union’s objectives. Only in 2020, when the economy rebounded from the COVID-19 contraction, did growth exceeded the desired 2–4 percent range; last year it stood at a mere 1.3 percent. In contrast, NATO’s summit last June concluded with its members committing to increasing defense spending to 5 percent of gross domestic product by 2035; many of these countries are also EU members. Now, it is not only the practical challenge of ensuring growth to finance defense, but also an ideological one for those who adhere to the EU’s founding principle that wars are prevented when the global liberal democratic order prevails, including beyond the Continent’s borders.

The process of expanding this European project, which began with the loose-knit European Economic Community and evolved into a free trade association that culminated in the EU, has made it a geographical giant forging an “ever closer union” of its members, yet still stopping short of becoming a United States of Europe. That goal of a single European state has so far proved to be elusive. With the rapid accession of most Eastern European countries, the EU has created a liberal democratic mass across Europe, but still has not been able to form a consensus on some crucial foreign relations and security issues, while the veto power of each member country has become an obstacle to forming a robust and coherent foreign and security policy.

As is common in history, a crisis helps focus the mind, and the EU has experienced two major ones in quick succession since the beginning of the decade. First it was the global pandemic and then the war in Ukraine, which although different in nature, are both existential issues that have meant putting the safety and security of the European societies first, and forced the EU to overcome differences among its members. It is also the recent change of administration in Washington that has challenged it to form distinct policies that differ from those of its major ally on the other side of the Atlantic. Ahead of an EU leaders’ meeting last week, French President Emmanuel Macron said that “we have the Chinese tsunami on the trade front, and we have minute-by-minute instability on the American side. These two crises amount to a profound shock, a rupture for Europeans” — and this without mentioning the war in Ukraine.

As is common in history, a crisis helps focus the mind

Yossi Mekelberg

The threats to Europe emanating from these developments are clear, but at the same time — at this important historical juncture in world affairs — they could be the making of the EU as a force that is both an economic one and, step by step, one that is able to defend itself independently. Addressing the fear of the changing international order is now a top priority for the decision-makers in Brussels, while differentiating the EU in confronting what they see as the emergence of “a new league of authoritarians working on sowing division and seeking to create an alternative international order, the more aggressive posture and unfair economic competition from China.”

Interestingly, when Europeans were asked in a recent poll what they perceived to be the strengths of the EU, they cited the traditional areas of “respect for democracy, human rights and the rule of law” or its “economic, industrial and trading power” as faring well, as is the case for promoting democracy outside the EU. The message was also clear that Europeans are not satisfied with their inability to promote peace or address irregular migration and integration issues, and are very much expecting their leaders to prioritize security and defense, support Ukraine, and confront climate change.

Inevitably, there must be trade-offs in advancing these priorities, as they all require immense resources and a leadership in Brussels that is supported by its members with a sense of unity and purpose. Nevertheless, in this stormy international environment, the EU needs to make its economic strengths count. In a letter to national leaders, European Commission President Ursula von der Leyen warned that the answer to a world shaped by “increasingly raw power, strategic rivalry and the weaponization of dependencies,” is to change the way the EU does business by improving the “bloc’s competitiveness to support our drive for independence.”

The message was aimed not only at old and new rivals, but also at the EU’s bureaucracy, which it said must become more agile, cut red tape, and accelerate deregulation. Von der Leyen underlined the urgent necessity for all 27 member states to rally around common priorities, but was adamant that if this is not possible, it is for Brussels to find ways to move forward despite disagreements. This reflects a realization that the world into which the EU was born no longer exists, and that in the new one, Europe has an even more important role to play in protecting itself and its values.

• Yossi Mekelberg is professor of international relations and an associate fellow of the MENA Program at Chatham House. X: @YMekelberg