Geopolitics in Focus #2: The EU – a moment of opportunity?

Sara, you’ve been teaching a European Union focused course in time now for many, many years. But over those years that you’ve been teaching this course, the world has changed. The world order is starting to frail. There’s talk about a collapse of the Western led international order, and this poses some serious problems for the European Union.

Tell us a bit more about how you view the EU as an actor in international affairs. Just how coherent is it? So the EU is really a unique international organization when it comes to, on the one hand, being very strong and integrated in economic affairs and on the other hand, being quite weak as a political and particularly as a security actor.

So when it comes to economics and international trade, it acts under the leadership of the European Commission, and it acts with one voice. And that means when it faces international negotiations with, for example, the US or China, it’s a very powerful actor as the third largest economy in the world.

But when it comes to security, it doesn’t really speak with one voice or even foreign affairs. It’s not deeply integrated. Member states retain a lot of sovereignty, and so it’s much weaker, really, when it comes to facing challenges around Russia and Ukraine, around general security issues and challenges in the world.

Now we’ve heard a lot about the EU wanting to build up its defensive capabilities, trying to stimulate economic growth, too, in order to be able to afford those expenses. And so that brings into play the EU’s fiscal capabilities, its ability to raise funds and also then spend them in a collective manner.

How is that going to change now? Again, the EU has a problem. So there has been ongoing debate famously with the Draghi report, the former president of the European Central Bank came out with saying the EU, if it doesn’t want to lose global influence and competitive stagnation in terms of growth and so on, it really needs to develop deeper fiscal integration, more fiscal capabilities, which means a bigger budget.

It means member states basically sending money to Brussels that Brussels can then redistribute. And as you can imagine, that is met with a lot of reluctance, especially in northern member states, that feels that they have to redistribute to poorer southern member states. So it’s not an easy discussion to be had, but probably this provides a moment for that to happen.

So this is a moment of opportunity, but also a profound challenge, because if the EU doesn’t deliver on these fronts, it may also lose some of the legitimacy it’s built up in the past. Would you see it in those terms? It is a window of opportunity for the EU right now, because historically, we know that the EU in terms of deeper integration tends to be failing forward.

So they are met with a crisis and they respond to it through deeper integration that would otherwise not have been possible. So we might very well see that right now in terms of closer defense and security cooperation and closer fiscal cooperation in the EU.

This also raises the question of whether there is political support for this in Europe. And in 2024 we had European elections to the European Parliament, which produced, some would argue, a surge in populist, even anti-EU sentiment. How do you interpret these trends?

There’s no immediate sign that populism has peaked in Europe, and I think that’s where the real challenge for the EU lies, because what the populist right shares is an opposition to further European integration, often a sort of quite hardline Euroscepticism, as well as an emphasis on national sovereignty.

So that challenges these attempts to create deeper integration in fiscal policy, deeper integration in security and defense. But many of these populist governments at the national level also need the EU to deliver in terms of support for economic growth, the technological developments that the Europeans now need to catch up on, where the US and to some extent China, are leading. So is there not a tension that populists face, both wanting to pull back from integration, but also needing Brussels and a united EU to support them?

That’s right. And the question really then becomes, how do populists act when they’re in power? Do they still want to leave the EU? Generally we see not really. Here Britain is the exception in the one country that has left the European Union, whereas most other populist leaders, even when they’re in government, will say, actually, we quite like being a part of this single market and this larger political structure. However, we want to move things back to the member state, repatriate powers, which can still make coordination difficult.

So this creates huge uncertainty for business leaders who want to know which way European integration will go. And that, of course, takes me back to your course in TRIUM which tries to make sense of that. There is some uncertainty, but also, again, by understanding the institutions of the EU, we also understand how they actually generate a lot of stability.

So what we see in the US, when you have a certain political leader who might be called a populist, come in with very radical plans, he can implement those quite quickly. But that’s not the same in the European Union. So in fact, the European institutions, the European project does create a sort of constraining and stabilizing effect.

That means perhaps actually there’s more certainty for business leaders than there are in countries that have a less complex institutional structure. But now the question is, as the US is stepping back from the liberal international order and from being a sort of the core ally of Europe, can Europe then step up and take on more global leadership?

That’s the big question for Europe right now.