Geographically, Europe is not a continent.

However, the area is bonded by common heritage which is mainly – but not exclusively – historical and religious. Through a combination of its Roman-law legacy and Christianity, Europe developed a culture of individualism and self-responsibility. This became the basis of a free society and allowed the area’s staggering economic and scientific development over the last 300 years. As a result, the European system spread across the globe.

To facilitate analysis, we do not include the region’s northeastern flank – Russia and Belarus – in our Europe category. We do not claim that these countries are not European. However, in view of Russia’s size and the gravity of its Asian interests, we treat it as a separate entity. At the same time, we have put the Black Sea region, including Turkey and the Caucasus, in our Europe section.

Due to its – unfortunately now fading – culture of individuality and responsibility, Europe had become the most prosperous region of the world. After the horrors of two world wars, it has developed a consensus to remain peaceful. The European Union, and especially the internal market that was created as part of its forerunner, the European Community, has contributed greatly to peace and stability in the subcontinent.

Among Europe’s biggest challenges today is the excessive public expenditure states need to maintain their increasingly inefficient welfare and administrative systems. Politicians, in their need to create an illusion of security for their electorates, have increasingly turned to curbing individual freedom and enterprise with red tape.

The sovereign debt problem remains unaddressed and is made worse by insufficient provisions for retirement systems – all in a continent with low fertility rates.

In global politics, Europe needs to find a way to preserve its vital interests. The primary task is to establish a balance between Europe’s close ties with North America – the transatlantic relationship – and the Eurasian vector. The relationships with the United States and Russia must be prioritized. Another critical issue to address are the relations with Europe’s doorstep, in the Mediterranean and Africa.

Unfortunately, Europe’s ability to assert its interests globally is increasingly limited. The cause is most European countries’ political unwillingness to build a credible system of common defense. Europe’s somewhat hypocritical doctrine of a values-driven foreign policy is fading in the face of a limited financial capacity to carry it out.

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See our reports on Europe

  • Report
  • Scenarios

Leadership Challenges 2020: France and the sociology of bad governance

In France’s ideal republican model, the enlightened elite lead the public toward a unified, egalitarian system. The model is corrupted, however, with the some “more equal” than others, and increasing centralization causing distrust within society. The result is a lack of accountability for those governing, which has led to increasing dysfunction throughout the system.

Dr. Emmanuel Martin
  • Report
  • Analysis

Opinion: Russia and Ukraine, or who will outwait whom?

The leader of Ukraine had high hopes for the December 9, 2019, Normandy Four talks in Paris. President Volodymyr Zelenskiy promised Ukrainians the start of a vigorous peace process with Russia. However, Russian President Vladimir Putin is in no hurry to end the Donbas conflict. The United States has lost interest in Ukraine while Germany and France are pursuing a complex agenda that includes normalization of relations with Moscow. 

Dr. Pawel Kowal
  • Report
  • Scenarios

Germany: The exhausted man of Europe?

Formerly Europe’s growth engine, the German economy is now lagging behind other eurozone countries, and could potentially affect growth in the entire region. This poor performance is partly caused by the looming threats of U.S. tariffs and a disorderly Brexit. However, systemic problems, like a lack of technological innovation in the once outstanding automotive industry, are also contributing to the issue.

Dr. Michael Wohlgemuth
  • Report
  • Scenarios

Taxing the digital economy

An ongoing international effort to rewrite the global tax rules for the digital economy would be a dramatic shift with potentially damaging consequences. Fear of countries unilaterally levying their own digital taxes has led to an alternative at the OECD, motivated by both fiscal and political factors. The new proposal would abandon the tax’s connection to business location and would work toward an international minimum tax on corporate profits. If the plan overcomes stiff political challenges and succeeds, consumers and workers may pay the price. If not, the global tax environment will continue to be chaotic, but tax rates will likely remain low and promote investment and growth.

Adam Michel