The European Union seems to be moving from one emergency to the next. Europe’s leaders are in crisis-fighting mode: reactive, improvising, often uncoordinated – but ultimately modestly successful. The eurozone has not splintered; Russia is smarting under Western sanctions; some burden sharing on refugees has been agreed.

Busy with short-term problems, however, Europeans have taken their eyes off more profound, long-term challenges. How the European Union copes with its immediate problems in the next couple of years will determine how the continent will fare in decades to come.

Against this background, the Global Agenda Council on Europe has analysed some of the most pressing issues confronting the EU in 2016-17. In a new report, we present the choices that European leaders must make in the years ahead and explain how these could shape the Union’s medium to long-term development.

The immediate economic concerns that dominated the European agenda in 2008-14 are abating. The cyclical upswing in the European economy, however, must not make governments complacent about the need for reforms.

  • Faced with stagnating or shrinking working-age populations, European countries simply must fix their productivity problem if they want to generate long-term growth.
  • In the area of innovation and digitisation, European leaders often seem obsessed with data privacy and protection, rather than grasping new opportunities.
  • The European Commission’s laudable attempts to integrate and improve EU markets, for example for energy and capital, have so far been slow to get off the ground.
  • The arrival of millions of migrants, asylum seekers and refugees is a great opportunity for an ageing Europe – but only if governments, together with the private sector, act swiftly to help the new arrivals find jobs.

External political challenges also abound: an unpredictable and revisionist Russia and the meltdown in the Middle East are confronting Europe with geopolitical threats of almost unprecedented complexity. Will European governments pull together to act resolutely? Or will they discard whatever is left of their common foreign and security policy? The answer will determine whether the EU can stabilise its neighbourhood in the coming years or else risk importing instability from abroad.

Video: Leaders debate the future of Europe at Davos 2016.

Another critical question concerns the UK’s future in the EU. Will Prime Minister David Cameron, together with his European partners, manage to convince the British that they are better in than out? If Britons votes to leave the EU, the United Kingdom will probably disintegrate and the entire European integration project will suffer a possibly irreversible setback.

EU leaders must tackle all these issues at a time when the idea of European integration is losing its popular appeal. Six in ten Europeans did not bother to vote in the 2014 European elections. Only four in ten had a positive opinion of the EU in 2015.

Although Europeans gradually regained their confidence in the EU as the region emerged from the euro crisis, the refugee crisis is now making them doubtful again. At the end of 2015, migration topped the list of European concerns in all but one EU countries. European leaders must deliver solutions, and fast, if they want to prevent support for the EU from imploding in coming years.

Video: Greece's Prime Minister on the refugee crisis at Davos 2016.

Growing anti-EU sentiment affects national politics, too. In 2015, a partly anti-European left-wing coalition took over in Portugal, the generally pro-European Poles voted for a populist and eurosceptic government, while in France, only the coordinated efforts of mainstream parties prevented the nationalist Front National from gaining regional power.

Public disaffection is to some extent a hangover from the euro crisis. More profoundly, Europeans are confused about the purpose of the EU. Traditional arguments about Europe as a peace project have lost their appeal. If eurosceptic attitudes spread further, the temptation for Europe’s national governments to go it alone will rise – at a time when the need for common solutions to complex problems is stronger than ever.

Current crises, however, could also be an opportunity to imbue Europe with a new narrative. If European countries are working well together to tackle slow growth, refugee challenges and external threats, the EU would no longer be seen as a lofty and distant political ideal but as an effective, if sometimes irksome, crisis-fighting mechanism.

The views expressed here reflect the discussions of the Global Agenda Council on Europe.