Europe stands on a knife-edge. While China relentlessly builds and the United States races ahead in technology, the European Union risks drifting into slow decline—economically weaker, strategically dependent, and exposed to forces it cannot control. The Draghi report on EU competitiveness warns that without decisive action Europe will forfeit not only growth but its ability to defend its way of life.
The threats are multiple and reinforcing. Industrial capacity has thinned as factories moved abroad; vital know-how in energy technology, semiconductors and advanced manufacturing erodes further each year. Clean-tech ambitions clash with energy costs that remain far higher than in the U.S. or China. Fragmented capital markets and labyrinthine rules slow down every promising innovation until competitors elsewhere seize the lead. At the same time China dominates global supply chains for rare earths, batteries and pharmaceuticals, leaving Europe exposed to political leverage from Beijing.
To these economic headwinds comes the hard edge of security. Russia’s full-scale war on Ukraine is no longer a distant regional conflict but a strategic earthquake. A revanchist Kremlin openly threatens NATO’s eastern flank, tests Europe’s airspace and cyber-defences, and bets on Western fatigue. A continent that struggles to produce artillery shells fast enough, or to coordinate its own air-defence procurement, cannot assume that the U.S. nuclear umbrella will always suffice. Economic fragility and military vulnerability feed each other: a weaker industrial base makes rearmament harder, while insecurity discourages long-term investment.
What Europe needs is not another round of cautious communiqués but a surge of purposeful action. The Draghi report calls for hundreds of billions in annual investment to rebuild manufacturing and energy systems, but money alone will not be enough. Decision-making must be faster, regulation simpler, and the single market finally completed so that ideas, capital and skilled workers can move as freely as ambition demands. Industrial policy must target critical sectors—clean energy, digital infrastructure, advanced defence technologies—while integrating climate goals with competitiveness rather than setting them in tension.
Europe has shown before that it can reinvent itself when the stakes are existential. Today the choice is stark: either remain a mosaic of well-meaning but slow-moving states, or act as a true union capable of building, defending and innovating at scale. The alternative is a future where prosperity ebbs, dependence grows and security is left to others. In an age when power belongs to those who can out-build and out-last their rivals, Europe must decide whether it wants to shape the century—or be shaped by it.