The EU needs a new geopolitical compass

In a world of growing disorder, the European project is now about hard power. Whether we like it or not, we need to reinvent the purpose of European integration or risk being divided, marginalized or both.

The 9th of May marked the European Union’s official ‘Europe day’. This celebration of ‘peace and unity in Europe’ stands in stark contrast with the world beyond. Europe is waking up to fact that it sits strategically alone: Russia is an enemy, China an adversary as well as a partner, and Donald Trump’s US a threat or a liability.

In the slipstream of Russia’s invasion of Ukraine, EU member states in 2022 adopted a Strategic Compass aimed at boosting European security and defence spending in coordination with NATO and the US. This framework is in need of a major rethink reflecting Europe’s post-Trump predicament. In late January the European Union unveiled its Competitiveness Compass, a flagship initiative to rebuild European leadership in innovation, decarbonisation and security. Launched barely a week after Donald Trump’s return to the White House, the Compass’ mix of pro-growth market reforms and industrial policy has been overshadowed by the US ripping up globalisation, cozying up to Russia, escalating a trade war with China, lambasting allies and bullying everyone into submission. Economic development flows downstream from this stark geopolitical reality. To succeed, Europe’s new economic strategy has to build upon a new geopolitical strategy.

Europe essentially has three major options. One: Make Europe Great Again. That means doing a US in Europe geopolitically: developing what is needed to project European power on the continent, tying third countries to a pax Europeana built upon a big market with integrated technological and security capacities, eventually flanked by a NATO reset. To get there Europe would also have to do a China economically: rebuilding a strong European industrial and technology base through industrial, trade and energy policies that connect economic ties to geopolitical aims. Europe would then be able dominate its Eurasian theatre and an adversarial Russia, in close collaboration with countries such as the UK and Turkey, while achieving a degree of geopolitical independence in the wider world.

The second option is to buckle down on the old EU of rules, human rights and free trade, positioning Europe as the last bastion of true globalisation. Europe would then follow in the footsteps of the US under the Biden administration, engaging with likeminded countries around the world while shielding a small yard of strategic industries with a high fence of protectionism to ensure a degree of autonomy. For this strategy to provide stability in Europe, it would eventually have to involve either China or the US as a security backstop. As long as Trumpism means US indifference or worse, Europe would have to consider doing its own ‘reverse Kissinger’ in disconnecting China from Russia: offering China a European off-ramp in its trade war with the US on the condition of China neutering its partnership of upheaval with the Putin regime. Europe’s default position vis-à-vis a post-war Russia would then be one of limited trade and diplomatic normalization rather than of adversarial dominance.

The third option is for Europe to continue playing second fiddle to the United States even as Washington seeks to reshape the global order. In the short run this would mean reestablishing Europe as a strategic asset for an America First agenda: striking a US-friendly trade deal with president Trump, paying the bills for stability in Ukraine and across the EU-Russia borderlands, enabling US business interests in peacekeeping, post-war reconstruction and mining, accepting a Ukrainian peace that effectively stops the eastward flow of democracy beyond EU-borders, while towing much of the US line in relation to China. In return, Europe would continue to benefit from minimal US security guarantees while remaining integrated in US-led technology and financial markets and in the new US military industrial complex as America decouples from China. In the midterm, provided America would become less isolationist while maintaining its rivalry with China, a deeper transatlantic partnership might yet reemerge, reflecting both broader geoeconomic realities and a mutual need for burden sharing and shifting in the new world order.

Which of these options is Europe currently taking? The short answer is: all of the above at the same time. Europe is developing its capacity for defence and security while pursuing industrial policies to boost its geoeconomic standing. It continues to actively promote trade agreements globally, including attempts to deepen EU-China trade with more Chinese production in Europe. It courts US-partnership and protection, not least in relation to Ukraine and Russia, while exploring the art of a trade deal with the Trump administration. To some extent this shows a remarkable capacity for political creativity. But Europe is not cleverly hedging its bets in a world of disorder beyond its control. Instead, it is clinging to a status quo ante while being capable only of piece-meal reactions to external events.

If Europe cannot become pro-active and strategic the geopolitical cross-currents will eventually divide her politically and marginalise her geopolitically. European nations face the challenge of a new world order as a matter of necessity, not of choice. Either they succeed in channeling a response through the European Union, or their inevitable individual responses will gradually sideline the EU. The emergence of ad hoc coalitions of the willing vis-à-vis Ukraine is a benign harbinger of what could become an existential threat.

It is a tough call to do grand strategy with 27 and more independent European nation states. But Europe is no stranger to geopolitics and geoeconomics. In the slipstream of Russia’s invasion of Ukraine, the EU adopted a Strategic Compass aimed at boosting security and defence spending in coordination with NATO and the US. Earlier this year, barely a week after Donald Trump’s inauguration, a Competitiveness Compass announced a mixture of pro-growth market reforms and industrial policy to rebuild European leadership in innovation, decarbonisation and security. These frameworks are in need of a rethink reflecting Europe’s geopolitical predicament. In defence strategy the European Union has boldly set a scene where only member states can really tread. The reemergence of a Berlin-Paris entente can offer momentum but, even more importantly, symbolic leadership. Europe’s populations deserve a sense of common mission and destiny, a helpful antidote to euro-sceptic populism.

If Europe is again to become the master of its own fate, its geopolitical compass seems straightforward. Keeping Russia in check on our own requires significant European hard power capacity and autonomy vis-à-vis the US, as well as sufficient strategic and economic independence from China. The latter guarantees Europe will still be able to explore a transatlantic reset with a post-Trump US, a historically sensible scenario we would undermine by unilaterally deepening trade relations with China in the short run.

One way or the other, European nations collectively have to become conscious that the ‘European project’ is now a hard power project needing a geostrategic footprint beyond the current boundaries of the EU. In the aftermath of Russia’s aggression, the European Political Community was created as a loose coalition to reflect just that, also involving third countries like the UK, Turkey, and Ukraine. European leaders will have to spend more political capital to ensure an effective geopolitical EU can emerge in a world fully at odds with the old EU of open borders and free trade. We have been there before. In the early fifties, post-war European nations tried and failed institutionalizing political and defence cooperation. Back then, America’s protection and an economic community enabled peace and prosperity for a divided Europe. Today, with Europe fending for itself and with economic development subservient to geopolitics, failure is simply not an option.

Extended version of an opinion piece published in the Financial Times of 12 May 2025