The European Union is not merely facing a series of overlapping crises, but the simultaneous unravelling of the geopolitical, economic, and democratic orders that have long underpinned its stability and global role. This moment of systemic disruption poses a stark question: can Europe move from being an object of global shifts to becoming a subject that actively shapes the emerging world order?
When asked what challenges the European Union is currently facing, one can rattle off an increasingly long list: geopolitical vulnerability, democratic backsliding, populism, the climate crisis, rising living costs, tightening public finances. However, instead of dissecting each issue in isolation, it is more revealing to examine the deeper tectonic shifts. Beneath the surface, three foundational orders that have underpinned the European Union and the broader Western world for decades are eroding simultaneously.
First, the geopolitical order. We are witnessing the return of unrestrained hard power, spheres of influence and imperial ambition. Russia’s war of aggression in Ukraine has shattered the post-Cold War European security order. Meanwhile, China is steadily expanding its influence in Asia and beyond, pressing its strategic claims. New lines are drawn to divide and apportion the world.
Second, the economic order is under pressure to change. Climate change is forcing a historic transformation towards green and sustainable production. At the same time, digitalization and artificial intelligence are remaking the global economy, upending labour markets and industrial models. Meanwhile, the global economic centre of gravity is shifting to Asia. And as geopolitical fault lines harden, states are increasingly using economic tools as weapons, racing for dominance in critical technologies, imposing trade restrictions, and reshaping supply chains.
Third, the democratic and societal order is increasingly fragile. Populism, polarisation and political violence are on the rise. Our societies are growing ever more divided. The 2025 Edelman Trust Barometer describes Europe as entering a “grievance-based society”. There is an increasingly widespread belief that institutions are unfair and ineffective. Trust in institutions is fraying, disinformation is spreading, and foreign adversaries are exploiting these fractures. Illiberal democracies are no longer outliers; they are becoming mainstream.
For Europe, these three orders – geopolitical, economic, and democratic – have long been a foundation of peace, prosperity, and stability. And for much of the past century, the United States helped cement and safeguard them. But under Trump 2.0, Washington has become an accelerant of their collapse.
Trump is speeding up their decline. He undermines NATO, challenges allied sovereignty (Greenland), launches tariff wars that shatter global trade norms, and seeks to reverse the green transition. His administration openly supports far-right actors in Europe, from the German AfD to Poland’s PiS.
As Robert Kagan put it at this year’s Dahrendorf Lecture in Oxford: Europe may now be one of the last liberal bastions in the world, caught between an anti-liberal power in the East and an anti-liberal superpower in the West.
Europe’s answer: Independence
Europe must come to terms with this transformation and decide what role it wants to play in this interregnum period.
In her Charlemagne Prize speech, European Commission President Ursula von der Leyen, gave contours of an answer: the “next great era – the next great unifying project – is about building an independent Europe”. Europe as a collective capable of acting, shaping and defending its interest and values. She outlined a number of imperatives ranging from a new “Pax Europaea” where Europe takes responsibility for its own security, a more economically competitive European Union, new momentum for enlargement, and finally an invigoration and defence of European democracy.
And the EU has undoubtedly made progress with regards to the three collapsing orders. Geopolitically, it is increasing its own defence investments and establishing Security and Defence Partnerships with countries such as Japan, Korea, and the United Kingdom. Economically, it is trying to boost investment via completing the capital markets union, forging new trade partnerships and advancing the clean industrial deal. And on democracy, the EU is preparing a Democracy Shield initiative, with the aim to protect the Union from malign interference.
The roadblocks ahead
But there are a range of challenges impeding progress.
The Union is divided. Hungary continues to veto initiatives, often backed explicitly or tacitly by other governments such as Slovakia. Consensus remains the EU’s default mode, making it easy for individual member states to block collective action, even in areas of strategic importance.
Governance reform remains stalled. Despite repeated calls for treaty change or at least more flexible decision-making, there is little appetite among member states to reform voting procedures, strengthen supranational authority, or empower EU institutions to act more decisively in times of crisis. Budgetary constraints are tightening. Many EU countries are heavily indebted, limiting both national and collective financial firepower. The EU’s own budget remains modest compared to the scale of its ambitions. Proposals for common borrowing, deeper fiscal integration, or sovereign investment capacity face political resistance. Without financial firepower, even the best plans remain toothless.
Institutional overload is growing. The EU increasingly finds itself trying to do more with outdated structures and overstretched capacity. Implementation bottlenecks and bureaucratic excess persist and coordination between national and EU levels is often lacking. And public support is volatile. While overall support for the EU remains high, trust in institutions is uneven. Populist narratives continue to thrive in several member states, and many citizens view Brussels as distant, technocratic, or unresponsive. This weakens the political mandate for deeper integration and enlargement.
Finally, shifting political majorities in the EU institutions are already shaping a more defensive agenda. The political direction of travel is regressive or counterproductive in some areas. Climate ambition risks being scaled back, even though green leadership is a core source of competitiveness. While attacks on civil society funding, coming from within segments in the European People’s Party, threaten an integral part of a healthy democracy.
These tensions between ambition and capability, between vision and the constraints of reality, are not new. But in the context of three collapsing orders, they now carry far greater weight. What’s at stake is not the effectiveness of European policymaking, but Europe’s ability to act coherently in a fragmenting world, and to help shape the new orders that will emerge.
Since the end of the Second World War, Europe was an object of history. A map on which geopolitical lines were drawn. A battleground of contestation. The question now is whether Europe can become a subject of history. Shaping events rather than being shaped. That will require political courage, strategic clarity, and a renewed belief in the European project.
This article is based on a presentation on the state of the European Union, delivered at the Heinrich-Böll-Stiftung’s annual strategy conference of its German offices in June 2025.
The views and opinions in this article do not necessarily reflect those of the Heinrich-Böll-Stiftung e.V.
