When Europe's survival instinct kicks in, opportunity knocks

Read the international press for two days in a row and you could be forgiven for concluding that Europe is facing an existential moment. Not a cyclical slowdown. Not another policy disagreement. But something far deeper - the gradual unravelling of the post-WW2, American-led consensus that has underpinned European security, trade, alliances and capital flows for nearly eighty years.

For the first time in generations, the United States is not just questioning its commitment to Europe - it increasingly appears to be undermining it. Defence guarantees are framed as conditional rather than automatic. Trade is openly transactional. And support for far-right, anti-EU political parties across Europe is no longer entirely covert or merely rhetorical. Division within the Union no longer looks like a by-product of geopolitics; it increasingly resembles part of the strategy.

But the pessimists should think twice before dressing for the funeral. Europe’s survival instinct can sometimes be surprising. Let’s look at the last forty years.

The high point of the European Union’s modern story came in the 1990s: the Maastricht Treaty, the four freedoms, and the belief that economic integration would naturally deliver political stability - and an end to the terrible wars between European states. The launch of the euro and the creation of the European Central Bank in 1999–2000 marked the moment the EU stopped being an aspiration and became a functioning polity. Four years later, ten more members joined the EU, with four more shortly after. Countries like Poland - possibly one of the most punished countries in the twentieth century - have experienced what can only be described as a twenty-year economic transformation since accession.

But this was the high point. After 2008, the EU seemed to move from one crisis to the next: the Global Financial Crisis, the euro crisis, Brexit, Covid, Ukraine and now a profound geopolitical shift involving the United States itself.

And yet, beneath the noise, the terrible headlines and the repeated death forecasts, the EU lives on. And the pattern is familiar.

The EU does not react quickly to shocks. Its first instinct is often denial, followed by a noisy, uncomfortable phase of consensus-building. Then, when the cost of inaction becomes undeniable, it takes a step that would have been politically unthinkable only months earlier. The crisis is not eliminated, but contained — and a new policy tool is added to the palette.

The euro crisis is the clearest illustration.

What began as a Greek fiscal problem quickly metastasised into a systemic threat involving Spain, Italy, Ireland, and ultimately the credibility of the single currency itself. Early responses were hesitant. Bailouts were contested. The ECB stood back and market volatility became rampant.

The turning point came when Mario Draghi stated that the ECB would do “whatever it takes” to save the euro, followed by “believe me, it will be enough.” What followed — liquidity facilities, OMTs, and ultimately quantitative easing — permanently changed Europe’s monetary architecture. Tools that had once been dismissed as impossible became policy overnight. The euro survived. Spreads fell. The system held … and today Spain, Portugal and Greece are booming.

The Ukraine crisis and the sudden realisation of how dependent Europe was on Russian gas triggered another such phase. The EU has significantly reduced its reliance on Russian energy and is legally phasing out gas imports completely by 2027–2028. Supply chains were re-engineered toward Norway, the United States and other suppliers, and what many believed would take a decade happened in a handful of years.

But today’s challenge is different again.

This is not a financial crisis or an energy shock alone. It is something deeper. A geopolitical stress test. A world in which “might is right” is re-emerging, and where external actors appear increasingly willing to test, strain, or exploit internal divisions.

Many conclude this is the end of Europe as we know it. That the future belongs to continental-scale nation states: the United States, China, and eventually India. That the EU is too slow, too fragmented, too consensus-driven. Too regulated. Too social.

That view misunderstands the survival instinct of a polity.

The EU has tools at its disposal to adapt under pressure. When the stakes become existential, it re-interprets rules and creates mechanisms that did not exist before — sometimes elegantly, as in the Brexit negotiations, and sometimes not, as in the euro crisis. But it does happen.

There is a reason the line attributed to Jean Monnet still resonates: Europe will be forged in crisis. Not through optimism. Through necessity.

And let us not forget that the EU remains a region of rule of law, deep capital markets, and broadly predictable policies. You do not need to be close to the ruling family to get business done.

And there is one final perspective worth holding onto.  Research by Danny Quah shows that the world’s economic centre of gravity has been moving east for decades. In the 1950s it sat firmly in the North Atlantic. Today, it lies somewhere around Central Asia. That is closer to Europe than to the United States. That probably means something.