The Shift
Spheres of Influence Instead of Rules and Norms
We have seen it coming, but the first month of 2026 made it crystal clear: The continued retreat of the United States from the post–World War II global order, and the realization that Europeans can no longer rely fully on their ally, partner, and friend, is fundamentally reshaping the European Union’s geopolitical outlook. We now live in a world where the international landscape is no longer held together by a dense fabric of rules, predictability within a general framework of openness, but is instead defined by spheres of influence and great powers taking what they deem to be theirs.
As the web of global political integration becomes increasingly fragile, political geography is reasserting itself. It cannot be wished away and will shape European action. Russia will not vanish from the map, and the Arctic will remain where it is: a European overseas territory at the crossroads of global strategic interests.
The Implications
The US Wants to Dismantle the European Union
First, make no mistake: The aim of the current US administration is to dismantle the EU as it exists today. For US President Donald Trump, the EU is an adversary that embodies everything he rejects – multilateralism, a values-based liberal order, and cooperation grounded in rules rather than brute force. His strategic objective is to divide the EU, deal bilaterally with individual states (each of which pales in size compared with the US), and render the EU’s supranational structure irrelevant. This understanding must be the yardstick against which EU member states should measure their responses.
Second, the era of wishful thinking – that things will somehow return to normal – is over. The threat that the territorial integrity of an EU member state may be violated by military means (though withdrawn at the time of this writing) has shown Europeans that they are largely on their own and must prepare accordingly. Europeans should, in principle, remain open to the transatlantic partner, not least because security – for now – can still only be jointly guaranteed with the United States. Yet the urgency of gaining greater strategic autonomy can no longer be ignored.
The Response
The Art of the Deal, Liberal-Democracy Style
The European Union was not designed to operate as a third entity in a world dominated by great-power rivalry. While it remains an economic heavyweight, its political and security DNA is rooted in rules, cooperation, and – crucially – a US security umbrella provided through NATO. This is reflected in its core competences and institutional setup.
In confronting the consequences of renewed great-power competition, the EU must chart its own course by decisively strengthening its capacity to shape what lies within its own sphere of control, while simultaneously weaving a new web of strategic interdependencies with partners. This must be done through variable geometry, both within and beyond the Union.
One central pillar – alongside defense capabilities and military strength – is the Single Market and the EU’s economic governance. This is an area in which the Union possesses both the competence and the capacity to act.
In a world of bullies and uncertainty, reliability will remain a decisive asset
Global shifts make it imperative to take bold decisions to strengthen Europe’s prosperity and clout – and, by extension, its long-term security. The evidence is clear. This means further deepening the Internal Market, including in services, creating a genuine capital markets union to unlock financing, and decisively fostering an ecosystem for digital technologies. Together, these steps would enhance the EU’s resilience while boosting prosperity at home.
At the same time, the EU should seize the opportunity created by the US retreat from global leadership to expand its own role. In this context, the Union is well positioned to assume parts of the global system’s functions. This would play to its own advantage, significantly strengthening the international role of the euro, as my colleague Shahin Vallée has outlined, keeping the EU at the forefront of the climate-neutral industrial transformation to capture the long-term gains of clean industries, and enable the EU to act reliably vis-à-vis willing partners in the Global South.
Ideally, this agenda should be pursued by all EU member states. But time is of the essence. To strengthen Europe’s economic sovereignty, frontrunner groups – including with regard to the Single Market – should be used to establish best practices and drive deeper cooperation and integration, while remaining open for other member states to join.
If there is one silver lining to recent developments, it is the realization that the EU is not alone. Many actors feel the same chill when confronted with this new era. They seek to preserve elements of a rules-based order as a shield against great-power domination. For the EU, this means turning to its neighborhood and creating a ring of friends where this does not already exist.
Credibly advancing – and concluding – EU enlargement with Ukraine, Moldova, and the countries of Southeastern Europe is essential to strengthening the Union’s influence in its immediate neighborhood. Closer alignment with the European Economic Area countries such as Norway and Iceland, as well as with the United Kingdom and Switzerland as closely aligned military and economic partners, is equally vital. Beyond Europe, partners with which the EU is already deeply economically intertwined – such as Canada, the Mercosur countries, and India – should be integrated into this new geopolitical fabric.
Across the globe, countries are watching closely which path the EU chooses. In a world of bullies and uncertainty, reliability will remain a decisive asset.
The European Union – or, where necessary, frontrunner groups within it – can use external pressure to forge European agency and build strength from within. The erosion of the transatlantic relationship makes it necessary to return to the drawing board and aim for a comprehensive package deal for which the EU holds a specific mastery: combining deep economic reforms with strengthened defense capabilities, while simultaneously accelerating enlargement alongside internal reform.
Such a liberal-democratic deal – negotiated among equals, with a clear role for the European Commission and robust public debate – may seem difficult to sustain amid current uncertainty. Yet a grand bargain, led by a core group of member states willing to lead and to make sacrifices openly, will be indispensable.
Germany, in particular, will bear a special responsibility. It must be among those initiating this process and seeing it through. This also requires a shift in tone – from a narrow focus on deregulation and reducing bureaucratic burdens to the EU as an accelerator of growth and economic strength in Europe. Exactly this is the EU’s larger mission during the current geopolitical shift. To succeed, Berlin will need partners not only in Paris and Warsaw, but also in Rome, The Hague, and Vilnius.
