In the next five years, Europe will grapple with the potential unraveling of the European project while its post-World War II social order continues to be strained by rapid migration flows from its unstable, often threatening periphery and by economic pressures from a globalized economy that are increasing economic inequality. The regional organizations that shape Europe—the EU, the euro zone, and NATO, in particular—have maintained European influence on the global stage so far despite the region’s declining shares of world GDP and population, but the EU’s existential crisis, exemplified by the “Brexit” vote, is likely to continue through at least the next few years.

Although the EU helped governments create shared prosperity, economic security, and peace, the euro zone’s lack of a fiscal union to match its single currency has left poorer states saddled with debt and diminished growth prospects since the financial crisis of 2008. Further, the EU has failed to create a sense that all citizens of Europe share a common fate, leaving it vulnerable to resurgent nationalism among its members in difficult economic times.

  • The future of the EU and the euro zone. Political parties, national leaders, and EU officials will continue to disagree on the proper functions and powers of the EU, as well as the wisdom of the euro zone’s current emphasis on maintaining budget discipline and current account balances without giving member states greater leeway to spur growth, much less bolder, pan-European solutions to growth differences and banking-sector problems. With policy constraints in place despite continued slow growth, EU and national governments will face weakening public support, particularly if the Union cannot adequately deal with incoming migration and terrorist challenges.
  • A threatening periphery. The danger of a more belligerent Russia and the perceived threat of Islamic extremism and spillover from the Middle East and Africa will increasingly alarm publics while failing to generate support for a uniform response. Russia is threatening Europe directly through propaganda, disinformation, and financial support for anti-EU and anti-US parties, while ISIL has inspired and assisted foreign fighters, some of whom have returned to Europe and increased the threat of European terror attacks.
  • Demographic pressures. An unstable periphery will continue to send considerable numbers of refugees and migrants to Europe, straining the ability of national governments and EU institutions to respond, causing tension between member states and with EU institutions and fueling support for xenophobic parties and groups. At the same time, the aging of existing European populations will create a growing need for new workers. EU institutions and national governments will continue to seek limits on migration and ways of better-integrating immigrants and their children.
  • Weakened national governments. One of the cornerstones on which postwar Europe was built was the deal that gained popular support for a liberal international economic order in return for the social protections of the welfare state. This bargain fostered stability both in terms of economic growth and representative democracy. The increase in electoral volatility in the past 30 years in Europe and the region’s weak recovery from the 2008 financial crisis are straining this bargain. New populist parties of both the right and the left are taking advantage of public dissatisfaction with slow growth, trimmed social benefits, opposition to immigration, and the decline in ideological distance between the established left and right.

Geopolitical Relevance of Region in Next Five Years: Uncertain Unity. Europe’s status as a global player has rested with its unity, material capabilities, and the broad consistency in goals and geopolitical outlook shared by its member states, especially France, Germany, and the United Kingdom. For the coming five years at least, the need to restructure European relations in light of the UK’s decision to leave the EU is likely to undermine the region’s international clout and could weaken transatlantic cooperation. We expect further assertiveness from Russia and deliberate attempts to split the European project. While unlikely, Russian success in regaining political dominance in Kyiv or undermining stability in the Baltics would damage the credibility of the EU and NATO.

  • The problem of an increasingly independent and multidirectional foreign policy in Turkey and its nondemocratic impulses, at least over the medium term, will add to the disintegrative currents in Europe and pose a threat to the coherence of NATO and NATO-EU cooperation.
  • At the core of the European project has been the idea that Europe stands for peace, tolerance, democracy, and cultural diversity and that Europe can avoid the divisive battles that plagued its history only through unity. One reason that most EU member-state governments worked so hard to keep Greece in the euro in 2015 was their determination to prevent the unraveling of the European project. A range of issues pose a serious threat to the future of the EU, including the Brexit process and its fallout elsewhere in Europe, the failure of major EU member-states to implement needed economic reforms, the failure of the EU to spur growth across the region, its failure to coordinate refugee policies, and the growing nativism that is particularly virulent in some of its new member states. These stresses could usher in a nasty breakup that reinforced economic decline and even more democratic backsliding.

Other Considerations. The next five years could provide opportunities for regional governance. Brexit could spur the EU to redefine how it relates to the member states and the European public. If the Brexit vote led EU officials and member state leaders to advance policies that showed the benefits of cooperation, and if European leaders found an amicable exit for the UK that let London continue to work closely with its continental counterparts on international issues, Europe could prosper. Despite increased public dissatisfaction with European decision making, European leaders still show more ability to find common cause and craft common policies than leaders in any other region. They still have the opportunity to forge a more effective EU that better respects public sensibilities about national identity and decision making, and the region’s well-institutionalized democracies have structures and checks that may succeed in reducing the effects of populist or more extreme leaders.

  • Despite antidemocratic developments in Hungary and Poland, institutional constraints have muted the impact of rightwing nativist or populist parties that have entered government in more established European democracies such as Austria and Finland. The development of strong judicial systems that practice substantive judicial review—introduced in much of Europe following World War II—remains incomplete in the newer democracies, but even in Hungary, there has been pushback to government policies seen as having overstepped accepted norms.
  • France and Germany remain committed to working together despite their differing perspectives and policy preferences, as seen by the extremely close cooperation between German Chancellor Merkel and French President Hollande on the Greek bailout, EU policy toward Ukraine, and CT cooperation.
  • It remains to be seen whether Merkel, having driven Europe’s response to most of the crises of the past decade, will recover her political momentum after failing to win support—in Germany or in the EU—for a more welcoming approach to Syrian migrants. While other European countries have not been comfortable with Germany’s role, it is hard to see another leader as capable of balancing the region’s equities and responses.
Infographic - Germany's Population Projection of 78,403,000 in 2035

aEstimates for religious affiliation are based on data from the World Religion Database and are rounded to the nearest one-tenth of a percent.

bTotal Fertility Rate is the projected average number of children born to a woman if she lives to the end of her childbearing years.

Note: Demographic data is presented for countries estimated to have the largest population in each region in 2035.