Europe’s Strategic Awakening: Openings and Risks in a Changing World
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Europe’s Strategic Awakening: Openings and Risks in a Changing World
As Europe navigates an increasingly fragmented geopolitical and geo-economic environment, the European Union is entering a decisive phase. Economic security, industrial competitiveness, and strategic autonomy are becoming central pillars of European policymaking, with far-reaching implications for businesses, investors, and policymakers alike. This briefing explores how the EU is repositioning itself in response to these challenges and where new opportunities—and risks—are likely to emerge.
Executive Summary
Europe faces a rapidly changing global environment, including the weaponization of trade and escalating military conflicts, while struggling internally with political inertia and centrifugal forces.
The EU’s fundamentals – with around 15% of global GDP and outsized regulatory influence ("Brussels effect") – remain strong, but are not yet used strategically through procurement rules, state aid, trade measures, and sanctions.
To reduce vulnerabilities in critical sectors (e.g., semiconductors, energy, defense) and enhance strategic autonomy, the EU prioritizes single market integration, defense collaboration, and a coherent industrial policy.