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Copyright © 2025 by Social Europe and Friedrich-Ebert-Stiftung

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No part of this book may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without written permission from the publishers, except for the use of brief quotations.

Open Introduction

Introduction

At the dawn of the second von der Leyen Commission, the European Union (EU) faces a pivotal moment in its history. Rapid shifts in global power dynamics, profound social and economic disruptions, and the intensifying urgency of existential challenges such as climate change and technological transformation demand decisive action. In this volatile and uncertain landscape, the EU must redefine its strategies and priorities to ensure its relevance, strengthen its resilience, and assert its leadership on the global stage in the 21st century.

This book emerges from the EU Forward project, organised by Social Europe in collaboration with the Friedrich-Ebert-Stiftung. The project convened leading scholars and thinkers to reflect on the complex challenges confronting Europe and to chart a path forward. The result is a comprehensive exploration of contemporary politics and key policy domains, each examined through a lens of strategic urgency and opportunity. The opening chapter, written by Brigid

Open Europe’s Challenge in a New Era of Shift and Shock

Europe’s Challenge in a New Era of Shift and Shock

Brigid Laffan

As the EU’s new political cycle, following the June 2024 European Parliament elections, kicks off with the launch of the second Von der Leyen Commission Presidency, the arrival of Antonio Costa as President of the European Council, and the Polish Government under Donald Tusk taking over the Presidency of the Council of Ministers, the EU faces both immediate and long-term challenges and dilemmas. The leadership team that emerged at the end of 2024 is a strong one, and the EU will need this team to work in a collaborative and cooperative manner to leverage influence. Together, they represent the collective EU.

The emerging 21st-century global order/disorder is not one that suits the EU’s DNA, its history or preferences. The EU is the world’s most robust multilateral institution, and its members have a pronounced preference for a rules-based international order in which trade is regulated and its security underpinned by the Tran

Open Can Europe overcome the radical right to forge a new path?

Can Europe overcome the radical right to forge a new path?

Catherine De Vries

In the months ahead, European Union leaders face critical decisions about how to address Europe’s profound economic, fiscal, industrial, and security challenges. A popular saying in Brussels, attributed to Jean Monnet, one of the Union’s founding fathers, is that “Europe is forged in crisis.” However, the rise of radical right parties at both the European and member state levels over recent years could significantly complicate the EU’s ability to implement necessary reforms.

Pressure for EU reform is mounting. With war raging in Ukraine and Gaza, the relationship between China and the US cooling, and a potential trade war on the horizon, the EU needs to tackle its lack of competitiveness. Securing economic growth might not be sustainable without closer fiscal integration and a stronger single market, and deeper defence cooperation is needed to meet the growing geopolitical challenges. What is more, in order to fu

Open Populists Are Taking Over—Here’s Why Democracy Is Failing

Populists Are Taking Over—Here’s Why Democracy Is Failing

Mark Blyth and Henning Meyer

Henning Meyer: Mark Blyth, thank you very much for joining me today. We’re here to discuss the global ramifications of the second Trump presidency, particularly for the European Union, in the political and economic context we find ourselves in—or will find ourselves in shortly. Let’s begin with Trump’s “America First” agenda. How do you see this playing out in terms of trade policy, and what disruptions might this create for the EU? More importantly, how should the EU respond to mitigate these risks?

Mark Blyth: Thanks, Henning. Well, the EU has had four years to prepare for something like this—or at least to devise contingency plans. But here’s the thing: many seemed to assume that the election of Trump in 2016 was an aberration. That assumption was a mistake. Trumpism isn’t a fluke; it’s the new normal.

You see this reflected in Europe too. In the UK, Reform, led by Brexit’s architect, is g

Open Industrial Policy: Key to Europe’s Role in a Shifting World Order

Industrial Policy: Key to Europe’s Role in a Shifting World Order

Karl Aiginger

In the aftermath of the collapse of the Soviet Union, with Putin’s Russia attempting to reassert influence through its aggressive war in Ukraine, the old bipolar world has disintegrated. The United States, once hailed as the sole remaining superpower, now finds its economic strength constrained by internal challenges, including Donald Trump’s second presidency. China aims to become the preeminent global power but often acts with narrow self-interest, prioritising investments that secure raw materials or political influence. This leaves the European Union to take on a leading role with its Green Industrial Deal. However, the EU faces hesitation among member states, with populism supplanting Sustainable Development Goals (SDGs) as a unifying framework in some nations, and national policies often overlooking the need for cooperation within and beyond Europe.

The European Union, which was awarded the Nobel Peace Pr

Open How to break Europe’s Innovation Stasis

How to break Europe’s Innovation Stasis

Luc Soete

Research and Innovation (R&I) have traditionally been considered pivotal to Europe’s future growth strategy. Since the Lisbon summit in 2000, the European Commission (EC) has promoted growth policies intended to be smart—yielding high value-added and productivity; sustainable—such as the European Green Deal aimed at achieving the Paris climate targets; and inclusive—enhancing not only the income conditions of European citizens but also their individual welfare and well-being. It is, therefore, unsurprising that recent policy reports commissioned by the EC on the future of the single market—the Letta report—and on the future of competitiveness—the Draghi report—have once again underscored the critical importance of R&I for Europe’s future prosperity.

What is surprising, however, is that despite the growth and “consolidation” of the European R&I system over recent decades, supported by stronger legal foundations in various treaties, its impac

Open Europe’s education gamble: Can the EU compete in a Changing World?

Europe’s education gamble: Can the EU compete in a Changing World?

Jo Ritzen and Job Zomerplag

On 1 December 2024, Ursula von der Leyen began her second mandate with a new team of Commissioners, presenting an ambitious vision for a Europe that is free, democratic, strong, secure, prosperous, and competitive. However, this vision confronts a world in turmoil: war rages in Ukraine, genocide and unrest scar the Middle East, China asserts its geopolitical influence, and transatlantic relations are strained by whispers of new trade restrictions. Amid these global challenges, can Europe’s education and skills agenda rise to contribute to the vision of a competitive Europe?

A mixed report card

The state of education and skills in the EU reflects stark contrasts. The 2022 PISA results show declining educational performance and growing inequality. While European students perform on par with American peers in reading, science, and mathematics, underachievement has risen sharply since 2018. Near

Open How Europe’s fiscal rules are strangling growth

How Europe’s fiscal rules are strangling growth

Paul De Grauwe

Fiscal policies in Eurozone countries have long been shaped by the Stability and Growth Pact (SGP). This framework was conceived as a means to enforce orthodox fiscal rules designed to steer member states towards balanced budgets. Although the SGP was temporarily suspended during the pandemic, it was reintroduced in 2024 with minor, largely superficial, revisions. The recent reforms for instance introduced individualised debt reduction paths with high-debt countries facing debt-to-GDP reductions of at least one percentage point annually on average during the adjustment period.

The core principles of the SGP therefore remain unchanged. The European Commission retains the authority to initiate so-called “excessive deficit procedures” against countries with budget deficits exceeding three percent of GDP. These procedures compel governments to implement austerity measures aimed at gradually reducing deficits, with the ultimate obje

Open The Vanishing Act of Social Europe: Will it rise again?

The Vanishing Act of Social Europe: Will it rise again?

Dominic Afsharian

European social policy over the past decade has felt like a magic trick: from a social “triple A” to “a strong social Europe for just transitions,” audiences were captivated by grand promises. Then, suddenly, social Europe vanished. When Ursula von der Leyen first announced her Commissioners-designate in 2024, policy areas like “social” or “employment” were conspicuously absent. Instead, both Roxana Mînzatu and Hadja Lahbib were tasked with “preparedness.” While von der Leyen has since backtracked on this decision, uncertainty persists: what does the next Commission have in store for social policy?

The Commission’s priorities

Based on von der Leyen’s political guidelines and her mission letters, two main trends can be expected: (a) the subordination of the “social” to the “economic” and (b) the management of the status quo. These trends are evident in two social policy flagship projects: the “Union of Skills” an

Open The Capacity to ‘Compete’—Rethinking the Welfare State

The Capacity to ‘Compete’—Rethinking the Welfare State

Anton Hemerijck, Azizjon Bagadirov and Robin Wilson

As the world changes, norms, values and political preferences change. As social risks evolve, so do policy ideas and reforms. The mid-20th century objective of male-breadwinner full employment has, since the momentous entry of women into the labour market from the 1980s, given way to norms of gender equality and equal pay, and policy ideas about improving family services for dual-earner families. Education and care for children cannot be left singularly to dual-earning parents engaged in remunerated employment, just as public healthcare and old-age pensions are today self-evidently accepted. Social insurance, the breakthrough innovation of the modern welfare state, buffers boom-and-bust macroeconomic cycles while mitigating the household poverty which otherwise constrains economic engagement and impedes social mobility. Where individuals can rely on adequate income protection, they are l

Open A Changing Europe: Strategic Autonomy and Security in 2025 and Beyond

A Changing Europe: Strategic Autonomy and Security in 2025 and Beyond

Almut Möller and Henning Meyer

Henning Meyer: Almut, thank you very much for joining me to discuss the critical issues of European foreign and security policy at a time of profound change as we move into 2025. To get us started, the concept of strategic autonomy has been prominently discussed within the European Union. How do you assess its relevance in today’s environment, and what does achieving it actually entail?

Almut Möller: Thank you, Henning. It’s great to join you in this conversation and dive into these crucial topics. Strategic autonomy is a concept that can sometimes feel abstract—almost like something developed in a laboratory. However, it’s deeply rooted in real-world challenges. Over the years, the hope that the global setup naturally reflected the interests of the EU and its member states has been contested for quite some time.

The world today, in 2025, poses serious and existential threats to

Open About the Authors

Dominic Afscharian holds degrees in political science and economics from Heidelberg University and the University of Tübingen. He has worked with think tanks, consultancies and academic institutions and is currently a research officer at the Zentrum für neue Sozialpolitik in Berlin.

Karl Aiginger is Director of the Policy Crossover Center: Vienna – Europe. He is also Professor at the Vienna University of Economics and Business and Honorary Professor at the University of Linz. He is founding editor-in-chief of the Journalof Industry, Competition and Trade (JICT). He was Director of the Austrian Institute of Economic Research (WIFO) from 2005 until 2016.

Azizjon Bagadirov is a political theorist working at the European University Institute in Florence. His research focuses on theories of social justice and well-being.

Mark Blyth is The William R. Rhodes ’57 Professor of International Economics and Professor of International and Public Affairs at the Watson Institute for International an