Global Cooperation

Europe in 2026: nightmare or utopia?

A girl attends a concert, surrounded by European Union flags, during celebrations marking the 50th anniversary of the founding Treaty of Rome at the Brussels' Atomium, March 24, 2007.

Flying the flag - but what will the EU look like in ten years? Image: REUTERS/Francois Lenoir

Carl Bildt
Co-Chair, European Council on Foreign Relations (ECFR)
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From the refugee crisis to Brexit, tensions in the European Union today have the potential to tear the bloc apart - or pull it closer together. To illustrate what’s at stake, here are two very different scenarios for what could lie in store in ten years’ time. They are not intended as predictions, but rather a reflection of the consequences that today’s decisions could have for tomorrow.

1. If it all goes wrong

Despite an avalanche of different proposals, a series of EU summits in early 2016 failed to reach agreement on a viable common EU refugee policy. As attempts to put an end to conflict in Syria failed, an increasing number of people fled across the Mediterranean, prompting first Austria, then Germany, then everyone else to reintroduce national border controls. The Schengen zone de facto collapsed. As a consequence, tensions built up in the Balkans, with direct armed confrontation along the border between Greece and Macedonia.

The collapse of the Schengen zone also caused the general political climate in the EU to decline. In early April of 2016, a tide of anti-EU sentiment led to a referendum in the Netherlands, which held the EU Presidency, with a vote to turn down the EU-Ukraine agreement. The Kremlin praised "the wisdom" of the Dutch people.

In the UK, Prime Minister Cameron failed to secure support for continued EU membership in a referendum in June 2016, and the United Kingdom applied to leave the Union. The magnetism that had attracted new members ever since 1958 went into reverse, with calls for "concessions", "special arrangements" and a desire to leave the EU spreading in other countries.

Hopes that a more coherent ‘core Europe’ would emerge from the debris were dashed quickly, as almost all candidates in the 2017 French presidential election demanded far-reaching exemptions from EU rules. Voters decided to opt for the ‘real thing’ and elected Marine Le Pen as their new president, after she had promised an in-out referendum. In the German elections shortly afterwards, the anti-EU and anti-immigrant AfD-party came neck-and-neck with the mainstream Social Democrats.

Meanwhile, the negotiations on the exit of the UK proved to be complicated and increasingly acrimonious. By 2018 there was still no solution, and a new Conservative Prime Minister actively started to canvass other countries to leave and set up a loose free-trade area. In the meantime, Scotland voted to leave the UK, and confrontation over the Catalonia issue led to martial law being imposed in parts of Spain. With the Netherlands contemplating exit in 2019, the entire edifice of European integration was under threat.

Amidst so much political turmoil, governments paid scant attention to economic policy. Franco-German tensions had stalled eurozone reforms, with the result that the Italian debt crisis of 2021 once again threatened to destroy the single currency. Unemployment across the EU hit an all-time high of 14% that year. Following the European Parliament’s rejection of a new “Privacy Shield” agreement, several EU governments set up approval procedures for any kind of cross-border transfer and storage of data.

Protectionism spread also in the services sector, while the reinstatement of national border controls contributed to the unravelling of pan-European value chains in manufacturing. In 2019, the EU used a clampdown on dissidents in China to impose economic sanctions on its biggest trading partner. After a weak TTIP agreement failed to clear the German Bundestag, efforts to liberalise transatlantic trade were also abandoned.

In the meantime, a Russia simmering with economic and social tensions resorted to even more militarily adventurist actions in the Eastern parts of Europe, causing massive refugee streams. There was real fear of larger war breaking out.

Alarmed by and frustrated with the failures and fragmentation of Europe, US policies turned increasingly towards building a partnership with China, dismissing Europe as yesterday's world.

2. If it all goes right

The EU’s new Global Strategy for Foreign and Security Policy, agreed in 2016, turned out to be more than words. Faced with serious external threats, European governments pooled their efforts to give more robust support to Ukraine, while also helping to stabilise the situation in and around Syria through buffer zones and large-scale aid.

A genuine partnership with Turkey in managing the refugee crisis also gave new and necessary impetus to the democratic evolution of that country.

The prospect of peace and improved conditions in refugee camps in Lebanon and Jordan also helped to slow the flow of people into Europe. This allowed EU countries to devote more resources to helping new arrivals find jobs and integrate into local communities. The “not in my name” campaign against extremism, which brought together Muslims in over 20 EU countries, also helped to take the wind out of the sail of anti-immigrant politicians. In 2025, the European Commission estimated that the migrants who had arrived in the previous decade were contributing 0.2 percent to EU growth a year.

The UK, having voted to stay in the EU in 2016, threw its full weight behind a stronger EU foreign policy, a swift conclusion of TTIP and the various EU initiatives to deepen the single market.

Europe’s improving economies allowed governments to reverse cuts in defence spending. This was one reason why Russia was deterred from further aggressive moves. Another was Ukraine's success with democratic and economic reforms that gradually turned the country into a hub for innovation and highly paid jobs in the region. The contrast with Russia’s ailing economy forced the Russian leadership to redirect its efforts towards domestic reform. In its effort to turn around the Russian economy, the Kremlin signed a comprehensive free trade agreement with the EU, which laid the basis for a genuine “partnership for modernisation” to emerge a few years later.

With its 2017 election out of the way, and increasingly worried about slowing growth, Germany joined the UK’s push for European competitiveness. In 2020, the new European Commission packaged a dozen half-finished economic policy initiatives into its “go Europe!” strategy, with the aim of matching US productivity growth within three years. Although this goal was narrowly missed, 2023 was nevertheless memorable as the year when the first European start-up surpassed the US internet giants in terms of market capitalisation.

After much tinkering with Eurozone rules and institutions, the Finnish presidency of the EU in 2020 managed to forge a “grand bargain” in which euro countries finally accepted more central oversight over budget policies and reforms in return for a larger EU investment and stabilisation budget. By the middle of the decade, the euro’s fast-growing role as a global reserve currency was another of the reasons why the US was increasingly looking to the EU as a real partner in global affairs.

This essay is drawn from the Global Agenda Council on Europe's report, Europe: What to watch out for in 2016-2017.

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