Foreword

Published: 07/01/2025

The European Union is now the world's second biggest economy, as well as the largest area of economic prosperity and high living standards in the world. The last three decades could be described as an unprecedented example of European success, which was achieved by alleviating political conflicts, creating the Single Market, and introducing a common currency. On top of that, the EU’s expansion was in reality more than a mere enlargement of the Single Market as it also anchored Central European countries permanently in the Western political community and its values.

Yet times are ever-changing and the European Union continuously faces new challenges. Two recent crises that hit the global economy – the global financial crisis of 2008 and the COVID-19 pandemic in 2020 – have shown the EU to be less resilient in its economic growth than the US. Mario Draghi has already pointed out the growing problem of European competitiveness and its gradually eroding position in innovation relative to the US and China. A third crisis, namely the Russian invasion of Ukraine in 2022, exposed even more fundamental weaknesses of the European economy related to defence and resilience, and further exacerbated overly short-term aspects of energy policy. On top of that, the Union is yet to unlock the full potential of its Single Market by fully integrating the eastern and southern members’ economies, which can happen only through an economic convergence process. Lastly, the growing populations and prosperity of emerging markets such as India and Africa raise the question of our relationship with them and the EU’s role in a reshaping the world.