Europe 2050: Geometries of peace, power, and prosperity

CEPR has launched “Europe 2050: Geometries of Peace, Power, and Prosperity”, a new initiative that explores what Europe should aspire to become by 2050. By adopting a long-term perspective, the initiative seeks to move beyond short-term crises and assess current policy choices against a clearer strategic vision for Europe’s future. It will generate longer commissioned policy papers addressing the initiative’s core themes, and shorter pieces published on a rolling basis through an open call. Together, these contributions aim to frame a forward-looking debate on Europe’s long-term economic, political, and strategic future.

Wake-up calls and the big snooze button

Over the past five years, Europe has been woken up repeatedly and violently at least a dozen times.

The first alarm was the Covid crisis. Within days, national governments reinstated border controls and imposed export restrictions, exposing the fragility of the European Single Market. It took more than a year to rebuild common mechanisms, including joint vaccine procurement and distribution. Integration, long assumed to be irreversible, proved more contingent under pressure.

The next wake-up call came as global supply chains seized up after the pandemic. Semiconductor shortages halted production lines; container ships were blocked in the Suez Canal. These disruptions revealed the vulnerabilities of deep dependence on complex global value chains. Efficiency had been optimised; resilience had not.

Then came the sight of Russian soldiers advancing on Kyiv. War had returned to the continent. The attempt to moderate Russia’s ambitions through economic interdependence, Wandel durch Handel, had failed. At the same time, Europe faced the prospect of a winter without sufficient gas and the risk of industrial shutdowns. The immediate energy crisis was managed, but largely by replacing pipeline gas with more expensive liquified natural gas (LNG) imports, worsening Europe’s terms of trade and transferring significant income abroad.

European industry, especially machinery and automotive, also woke up to its growing dependence on the Chinese market, even as Chinese firms became formidable competitors within Europe itself. It also became evident that China was prepared to use its newly acquired economic power coercively.

The Draghi and Letta reports sounded yet another alarm. Their diagnosis was stark: Europe is falling behind in productivity growth; the Single Market remains fragmented; capital markets are incomplete; innovation and scale financing are insufficient. These are structural weaknesses, not cyclical ones. Addressing them requires sustained reform.

Then came a rapid succession of six shrill wake up calls from the United States: sharp criticism of European leaders and values at the Munich Security Conference; “Liberation Day” tariffs; US negotiations with Russia excluding Europeans and Ukrainians; the acceptance of an asymmetric trade deal; a national security strategy invoking the language of “civilisational erasure”; and finally, the Greenland episode, raising fundamental questions about US reliability as a partner.

One might have expected that any single one of these shocks would suffice to keep Europe fully awake to the possibility that it may increasingly need to fend for itself. Instead, it sometimes feels as if an enormous snooze button sits at the centre of Europe – too easy to press, too tempting to use. National political cycles, institutional constraints, governance rules, and entrenched interests intervene. And so, despite the alarms, Europe seems to drift back toward sleep quickly.

But since the status quo is not an option, going back to sleep will not improve prospects. This CEPR project begins from the recognition that Europe must now stay awake and find the energy for deep reform. Rather than starting from “what is politically possible,” we propose starting from the end: from a clear vision of Europe’s future.

Read in French on Le Grand Continent

Read « Projet 2050 : manifeste pour une Europe qui se réveille » on Le Grand Continent, which is partnering with CEPR on the dissemination of the output from this initiative.

Europe 2050: A vision

The discussion should begin with a simple but demanding question: where do we want to be in twenty-five years? Call this the “Singapore test.” A twenty-five-year horizon is distant enough to move beyond today’s constraints and crises, and to focus on what truly matters. It disciplines thinking and distinguishes tactical adjustments from steps toward a coherent destination.

We begin with an existential presumption: in twenty-five years, Europe still exists as a coherent political entity. It may not be uniform. Integration may proceed at different speeds and depths. But there is a clear core, a group of countries bound not only by treaties but by shared values: democracy, openness, the rule of law, and mutual responsibility.

This core Europe can defend itself. It possesses integrated military capabilities and the political will to use them for deterrence and defence. It can respond not only to conventional threats but also to cyber, economic, and informational attacks. Security is not outsourced; sovereignty is substantive, not symbolic.

Political systems are legitimate and inclusive. Democratic institutions function effectively; minorities are protected. Political disagreement is vigorous but bounded by shared constitutional norms. Trust in government means confidence that institutions act in the public interest.

Demographic decline has been addressed pragmatically. Europe has developed a smart and managed immigration system aligned with labour market needs and supported by effective integration policies. Migration is orderly, humane, and legal. Dangerous irregular crossings have largely ceased because legal pathways exist and are enforced. Immigration is neither demonised nor romanticised; it is treated as one component of a broader economic and social strategy.

Europe enjoys access to abundant, affordable, and clean energy. Dependence has been reduced through renewables, technological progress, and integrated energy markets. Climate adaptation is anticipatory rather than reactive, combining infrastructure, urban planning, and innovation. Europe continues to reduce emissions while supporting global transition efforts.

Governance is highly decentralised. Decisions are taken as close as possible to citizens. Local and regional authorities raise significant revenues and manage many public services, strengthening accountability and trust. Fiscal decentralisation encourages experimentation and policy diversity.

At the same time, Europe acts collectively where scale matters: defence, trade, climate policy, external relations, and core market regulation are exercised at the European level. The result resembles the Swiss model: strong local autonomy combined with credible central authority for shared interests.

The euro has become a fully global currency. It is widely used in trade, finance, and reserves. European capital markets are deep and integrated, allowing funds to flow efficiently across borders and support innovation. Monetary and fiscal institutions are credible and coordinated.

Physical integration matches institutional integration. High-speed rail connects major cities efficiently, reducing reliance on short-haul flights. Travel across the continent is fast, reliable, and sustainable.

European universities rank among the world’s leading institutions, not by replicating the Ivy League, but by building a distributed, accessible system of excellence. Innovation ecosystems link research, entrepreneurship, and industry across multiple regions. Europe generates both technology and talent at scale.

As a result, Europe stands as one of three major global powers, alongside the United States and China, not as a hegemon, but as an autonomous actor capable of shaping outcomes. It cooperates when beneficial, acts independently when necessary, and resists pressure when required. It is not forced to choose sides in every conflict because it is a side in its own right.

This vision is ambitious but not unrealistic. It does not assume uniformity or consensus on every question of integration. Differences are inherent in a pluralistic Union. But it assumes political choice, institutional adaptation, and sustained effort. Above all, it provides a benchmark against which present reforms can be judged.

Acting now

Achieving this vision demands more than technical fixes. It requires clarity of purpose and honesty about constraints. It requires rethinking both domestic policies and policies at the European level. Our focus in this project is on the cross-border dimension and what should be done at the European level (EU or coalitions of the willing). European integration has often advanced through crises, not because crises are desirable, but because they force decisions. Today’s challenge is to act with similar resolve without waiting for further deterioration.

Governance reform is central. Unanimity in key policy areas constrains action. Reducing its scope would not eliminate disagreement but would prevent paralysis. Differentiated integration and coalitions of the willing may increasingly be necessary. This raises difficult questions about voting rights, institutional balance, and the treatment of governments that do not adhere to fundamental EU values, but these questions cannot be avoided.

Defence policy illustrates the urgency. The war in Ukraine exposed the limits of current arrangements. Greater cooperation is unavoidable, but the form remains contested: joint procurement: shared capabilities, operational integration? Interoperability alone may not suffice. Financing (national budgets, common debt, or European taxation) remains unresolved.

Immigration is another structural challenge. Demographic trends and global instability suggest continued pressure. The questions are scale, enforcement, and legitimacy: how much can be absorbed, how asylum rules can be applied consistently, how family reunification is managed. Schengen’s experience shows both the benefits and fragility of open arrangements and may offer a template for flexible cooperation.

Europe must accelerate innovation, productivity, and growth. It must decide where to compete at the technological frontier and where to rely on external providers. Artificial intelligence exemplifies the dilemma: regulation is necessary, but excessive or poorly designed rules could weaken competitiveness. Broader questions about education, risk-taking, and attitudes toward failure are equally important.

Financial integration remains incomplete. The banking union is unfinished; common European safe assets remain limited; the euro’s international role is constrained. Efforts to strengthen it raise strategic and institutional questions, particularly in light of new financial technologies such as stablecoins.

Fragmentation persists in goods markets, where regulatory differences limit scale. Proposals such as a “28th regime” seek to create a truly European framework for firms, but their scope is contested. Energy markets highlight the interplay between decarbonization and security.

Trade policy has become more contested. Tariffs, export controls, carbon border measures, and industrial policy are now strategic tools. Europe must balance openness with resilience, particularly in sectors such as automotive. Engagement with China remains necessary but increasingly conditional.

Globally, Europe must build flexible partnerships (with the United Kingdom, Canada, Japan, India, Latin America, and others) while avoiding rigid bloc divisions in a world where Western unity itself cannot be assumed.

Across all these domains lies a fiscal dilemma. Defence, technological investment, and support for Ukraine require substantial resources. The choice between debt and taxation cannot be postponed. Debt is high, but underinvestment carries its own risks.

Deadlines can help discipline action. Clear targets (such as the 2035 phase-out of internal combustion engines) structure expectations and investment decisions, even if occasionally revised.

An uncomfortable truth must be acknowledged: the European project is not guaranteed to succeed. If insufficient progress is made, powerful anti-European forces, aided by external actors, may hollow it out from within. The result would not merely be stagnation but a loss of autonomy, leaving Europe increasingly dependent on other powers.

The challenge is therefore not only one of ambition but of execution. The European Union and coalitions of the willing have demonstrated that diversity can be combined with cooperation, and principles with pragmatism. While flexible integration made Schengen possible, it was the readiness of a coalition of the willing to mount an intergovernmental emergency response that proved crucial during the euro crisis. Whether it can do so again, under far more demanding conditions, will determine its place in the world for decades to come.

Source : VOXeu