European Sovereignty or Decline? Options for European Union Grand Strategy

CSDS POLICY BRIEF • 30/2025

By Giovanni Grevi

26.11.2025

Key issues

• The EU is moving into a new phase of grand strategy driven by US estrangement, Russia’s aggression and intensifying geo-economic competition, prompting a push toward greater European sovereignty;
• While Brussels has outlined pillars of competitiveness, military readiness, preparedness and partnership, major political, economic and institutional constraints risk reducing this ambition to a form of “sovereignty on the cheap”;
• Without decisive collective investment and strategic alignment, the EU will face three suboptimal alternatives, each amounting to managed decline: outsourcing, binding and retrenchment.

 

Introduction

Jean Monnet envisioned that Europe would be made in crises: providing concrete solutions to successive challenges would foster European integration. This assumption has broadly proven right so far, but it seems less suited as guidance for the future. It emerged in a geostrategic context where European integration unfolded within a Pax Americana. Today, America’s support for a liberal, rules-based international order is unravelling and its commitment to European security is in question. Although multiple crises have triggered policy innovation at the EU level, their cumulative impact has polarised European politics, fomenting nationalism and eroding the liberal fabric of the EU.

Europeans face the prospect of protracted confrontation with Russia, while Washington looks at Europe through an extractive prism. Concerning vital matters of European security, after regularly bypassing Europeans to deal directly with Moscow, last week the Trump administration presented Kyiv with a peace plan that largely reflected Russia’s agenda. On the global stage, Europe finds itself increasingly at the receiving end of the systemic rivalry between the US and China, both of which weaponise interdependence at will. This is a context where crisis management is necessary, but cannot be a substitute for grand strategy. The EU’s fragmentation along national and institutional cleavages, and the fact that most power assets rest with its member states, may lead to the conclusion that the EU is not fit for grand strategy. Yet, precisely the features that make the EU a unique international actor underscore the importance of grand strategy to mitigate its weaknesses and harness its strengths.

Grand strategy is defined here as encompassing what an international actor stands for in the world, what it wants to achieve and how. In the words of John Gaddis, ‘the calculated relationship of means to large ends’. The core requirement of grand strategy is a sense of purpose, articulating a consistent set of ideas and priorities that inform policy across the board, with or without a codified master plan. Over the past decades, successive elaborations of EU grand strategic principles and priorities, if sometimes thin or incomplete, have informed EU external and internal policy initiatives. Today, the EU appears caught between the soaring aspiration of Europe’s “independence” and Europe’s strategic shrinking on the world stage. The implication is a need to either empower Europe or devise new approaches to cope with a self-inflicted decline.

This CSDS Policy Brief builds on recent contributions on the impact of the Ukraine war on the EU’s grand strategy and on different approaches to grand strategy. It reviews how the EU’s grand strategic narrative and practice are adapting to the second election of Donald Trump and looks ahead at strategic options for the EU over a five to ten-year horizon. It argues that the alternative to a credible European sovereignty agenda consists of different shades of decline management, including outsourcing, binding and retrenchment.

EU grand strategy from Russia’s invasion of Ukraine to “Trump 2.0”

Russia’s full-scale attack on Ukraine in 2022 fractured Europe’s strategic landscape. In the face of Russia’s aggression, Europe effectively adopted a grand strategy of transatlantic anchoring and resilience building. The return of large-scale war in Europe intensified calls for Europeans to learn the “language of power”, with top officials speaking of Europe’s “geopolitical awakening”. It also reactivated a long-dormant vector of EU grand strategy – enlargement – as a response to fierce geopolitical competition in Eastern Europe. Advancing (open) strategic autonomy informed the EU’s nascent geoeconomic agenda, whereas this framing was sidelined in defence matters, due to the renewed emphasis on transatlantic cooperation to counter Russia.

On the geoeconomic front, the principles of de-risking and economic security took centre stage. Promoting Europe’s competitiveness, protecting critical technological sectors and partnering with others were the three main objectives of the EU’s 2023 Economic Security Strategy. In defence matters, the 2022 Strategic Compass and the 2024 European Defence Industrial Strategy outlined ambitious goals to strengthen Europe’s military capabilities, bolster defence production and support Ukraine. However, much of Europe’s defence investment took place on a national basis and relied heavily on outside suppliers, chiefly the US.

The war in Ukraine underscored the centrality of the transatlantic partnership to the grand strategy of the EU, deepening Europe’s dependence on the US not just for defence but also for energy security. The EU did not fully align with the US on every matter, such as the bloc’s China policy, but the paradigm of an increasingly cohesive West standing up to revisionist challengers gained traction. That proved to be a short-lived strategic framing. As Europe sought reassurance through a revamped transatlantic partnership, it continued to lose ground in US grand strategy. This trend – partially mitigated during the Biden administration – predated Trump’s return to office. Since at least the first Obama administration, the US has narrowed its core national interests, prioritised the Indo-Pacific and grown more introspective. Even so, the first ten months of the second Trump administration have marked a systemic disruption.

Amidst puzzling statements and policy reversals, such as on the conflicts in Ukraine and Gaza, Trump’s foreign policy signature has been to disconnect American national interests from the preservation of a rules-based international order. The alternative to US liberal hegemony has not been sharp strategic diplomacy but an erratic “America First” agenda directed to maximise gains for the US through short-term transactions. The US commitment to allies in Europe and Asia appears today highly contingent on them not only investing more in their defence capabilities, but also meeting US unilateral demands on economic, technology and regulatory issues, such as through coercive trade deals. Lopsided transactions are replacing strategic trust, as the direction of US foreign policy becomes unpredictable. Europe is a marginal variable in Trump’s Washington, whether it is disparaged or ignored, as the elaboration of the bewildering Witkoff-Dmitriev peace plan for Ukraine, endorsed by President Trump, confirms. Meanwhile, the Trump administration has repeatedly challenged the EU and its democratic norms on ideological grounds. This is a tectonic shift in the very foundations of the EU’s grand strategy.

A new phase for EU grand strategy? Profile, purpose and principles 

The “Trump effect” has triggered a new phase in the evolution of the EU’s grand strategy. While these are early days, and differences between EU member states blur the picture, a dual dynamic is at play. At one level, Europeans are in permanent damage limitation mode, striving to please President Trump to maintain some measure of American support for Ukraine and avert further turmoil on the trade and regulatory fronts. The ongoing, frantic diplomatic manoeuvres to contain the fallout of President Trump’s plan for Ukraine and reaffirm basic principles to achieve a just peace are the latest instalment of these efforts. At another level, the EU is laboriously piecing together a post-American grand strategy. This approach recognises that the centrality of the transatlantic partnership for Europe, all the more so in the face of Russia’s aggression, does not necessarily entail its durability. The hope is therefore to keep the US onside while empowering Europe. The EU’s fledgling post-American grand strategy can be outlined with reference to its constituent elements, namely the EU’s projected self-image, its driving purpose and the main operating principles of European statecraft.

The EU has been profiling itself as a reliable and predictable partner in a volatile world: steady and level-headed, while resolved to take more responsibility for its security. This narrative rests both on Europe’s (shrinking) market power and on (residual) trust in the EU as a pillar of rules-based governance. In contrast to all previous iterations of EU grand strategy, however, most Europeans recognise that Europe can no longer rely on the US to secure its core interests as much as it did. It needs to count on its own determination and resources, while working with Washington and other partners where possible. Echoing statements by President Macron of France, Chancellor Merz of Germany and various other European leaders, Commission President von der Leyen affirmed in May 2025 that “our next great era – the next great unifying project – is about building an independent Europe”. This appears to be a step-change, at least in terms of strategic narratives: achieving independence is presented as Europe’s overarching purpose. The common denominator between terms such as independence, strategic autonomy or sovereignty, when referring to the EU, consists of setting Europe’s course in ways that are not determined by others, and reducing Europe’s dependence on others while pursuing its priorities.

Drawing on the April 2024 “Letta Report” on the single market, the September 2024 “Draghi Report” on European competitiveness and the October 2024 “Niinistö Report” on preparedness, four main organising principles frame the EU’s evolving strategic approach: 1) competitiveness; 2) military readiness; 3) preparedness; and 4) partnership.

Competitiveness

The Competitiveness Compass presented in January 2025 outlines the (geo-)economic dimension of the emerging EU grand strategy and ‘establishes competitiveness as one of the EU’s overarching principles for action’. It states upfront that, in a world of great power rivalry and technological competition, ‘Europe’s competitiveness and what Europe stands for are inseparable’. Europe’s ability to ‘innovate, compete and grow’ is essential to preserving Europe’s ‘freedom, security and autonomy’. Re-launching Europe’s growth and boosting productivity through innovation are considered preconditions to reaffirm Europe’s global standing. The competitiveness agenda includes three “transformational imperatives”: closing the innovation gap, reconciling decarbonisation and competitiveness and enhancing economic security.

Military readiness

Taking primary responsibility for Europe’s conventional defence has emerged as an overriding priority for the EU agenda. The March 2025 White Paper on European defence, followed by the October 2025 Roadmap, underscores that, in the short term, ‘the future of Europe is being determined by the fight in Ukraine’ and that Europe must militarily equip itself to respond to any contingency. Indeed, President von der Leyen asserted that the first imperative for an independent Europe is ‘to develop a new form of Pax Europaea for the 21st century – one that is shaped and managed by Europe itself’. However, NATO remains the cornerstone of collective defence for most EU member states, and the anchor of  American extended nuclear deterrence in Europe. Still, the EU is supporting military readiness and encouraging industrial cooperation through various initiatives, including the “Readiness 2030 Plan” that could generate €800 billion in additional defence investment across the EU by 2029. Meanwhile, NATO members have committed to spending 5% of their GDP on defence and security by 2035. In a nutshell, the defence component of the EU’s grand strategy aims to establish a fully-fledged European pillar of NATO, enabling Europeans to take on the burden that the US are shifting their way, while ensuring the US’ commitment to the Alliance.

Preparedness

Preparedness has taken hold as another cross-cutting principle of EU grand strategy. It is closely related to the EU’s defence agenda but covers a much broader scope than the latter, ranging from military and hybrid threats to the impact of climate change and pandemics. The concept of preparedness largely overlaps with that of resilience, put forward by the 2016 EU Global Strategy, and emphasises a whole-of-society, anticipatory approach. The Niinistö Report paved the way for the adoption, in March 2025, of the EU Preparedness Union Strategy. The latter also reiterated that (mutual) resilience and preparedness should be embedded in EU external action, notably through partnerships with third countries and cooperation with NATO.

Partnership

Alongside the focus on empowering and securing Europe, the principle of partnership informs a reinvigorated agenda of global engagement. This agenda involves four dimensions. First, partnerships support resilience and competitiveness, such as diversifying the supply chains that Europe’s economy depends on. Second, partnerships feature in the EU’s geo-economic competition toolbox, such as through the Global Gateway initiative in response to China’s sprawling global geo-economic footprint. Third, partnerships are increasingly framed as a vehicle for hedging, to mitigate the risks of transatlantic disconnection and the ripple effects of the Sino-American rivalry. Fourth, this principle fits the EU’s stated commitment to rules-based cooperation, creating links that help support crumbling multilateral structures and deliver public goods. Here, the EU is deepening external partnerships in critical sectors, such as through the June 2025 International Digital Strategy, the October 2025 EU global climate and energy vision and a proliferation of new partnership formats.

European sovereignty on the cheap? 

The EU is on the cusp of a new phase in the evolution of its grand strategy, seeking to shift from a posture of resilience to one of empowerment, and from systemic reliance on the US to taking ownership of Europe’s future. At this stage, however, it is uncertain that the EU will accomplish this transition. After years of unbearably light debates on Europe’s strategic autonomy, European leaders’ calls for European sovereignty or independence are encouraging, but long overdue. Much time has been wasted, the world has moved on and challenges have deepened. In the words of Mario Draghi, ‘we have lost our growth model, our energy model and our defence model’. Whether this assessment will translate into a change of gear for the EU will depend on political determination, well-defined priorities and adequate resources. Some initial steps have been taken, but the EU and its member states have a very long way to go.

Europe’s “independence moment” faces several structural, political and economic obstacles. To start with, Europe needs to reconcile emancipation from the US with persistent dependence on them, in the medium term at least. Reducing this dependence will inevitably take time and entail intensive exchanges with Washington to plan a transition to a different defence posture in Europe and manage tensions on regulatory matters, from the digital to the green agendas, while preserving Europe’s choices in these and other fields.

Fostering Europe’s sovereignty will require not just pooling resources but a deeper change of mindset. In defence matters, for example, jointly delivering more capabilities is critical but not sufficient for a credible European defence policy. The latter also requires Europeans to be willing and able to plan for all contingencies and, if the US is not engaged, fight on their own. In the technology domain, cooperation with trusted partners is very important to advance innovation, resilience and shared principles, but the digital sovereignty agenda is nowhere near the level of importance that it requires. If digital technologies are foundational to Europe’s growth, security and democracy, especially given concerns about disinformation and polarisation, among other issues, then almost complete reliance on the technologies of others simply precludes European sovereignty. The recent Franco-German summit on digital sovereignty delivered a commitment to empower Europe’s digital future, but action will have to follow words. Europe’s stark dependency on the import of the raw materials that power the digital and energy transitions, and its rearmament drive, is yet another manifestation of its vulnerabilities.

Across these and other priorities, EU member states appear reluctant to invest jointly and at the necessary scale – with the partial exception of defence. They are also wary of European institutions strengthening their role as enablers of deeper cooperation in areas core to national sovereignty, from defence to economic security. Member states baulk at any significant increase in the EU budget or even at a sensible reshuffling of priorities therein, as proposed by the European Commission. Besides, they have so far prevented serious progress towards completing the Single Market and the capital markets union, which would unlock much growth potential. Meanwhile, political instability and the rise of illiberal political forces in several member states are jamming EU decision-making, particularly in areas where unanimity applies, such as foreign policy. The risk is that Europeans will seek to practice grand strategy on the cheap, if at all, hoping to meet structural challenges with incremental measures: firefighting instead of forest management.

Alternatives to European sovereignty: shades of decline management

If Europeans are not committed to empowering Europe, they will have to consider alternative grand strategies to define and protect their core interests. Anticipating these alternatives is hard because no course of action can be determined in a vacuum. Europe’s trajectory will depend on internal and external variables – the latter being increasingly salient in shaping domestic politics and European integration.

On the international stage, at least three major variables will define Europe’s strategic context in the next five to ten years. The first is the course of the war in Ukraine, its outcome, and the strategic reality that it will produce in Europe. The second variable concerns the future of US foreign policy and its global role. President Trump’s foreign policy is unpredictable by design, but it ultimately boils down to maximising perceived benefits for the US. Beyond Trump’s second term, the return to American liberal hegemony is off the cards, but considerable variation can be envisaged with regard to the US attitude to allies and rivals and to their engagement in, or boycott of, international cooperation. The third major variable is the future of the Sino-American rivalry and the extent to which it will structure the positioning of other pivotal actors. The course of China’s grand strategy – asserting control or playing the long game in its neighbourhood, undermining the international order or pursuing influence therein – will be a decisive factor, and the risk of conflict in the Indo-Pacific a major wildcard.

If a genuine European sovereignty is not achieved in the coming years, then Europe will likely come to increasingly rely on three alternatives that will offer precarious solutions to managing Europe’s decline.

Option 1: strategic outsourcing

The first decline management strategy for Europe is playing as a supporting actor to the US. In short, “strategic outsourcing”. This is not an entirely new course of action, as it reflects a long-standing mindset of dependency among Europeans. However, this choice would carry different implications from the past, since trends in US politics and foreign policy point to a sharper prioritisation in its global engagement. For an increasingly self-centred Washington, the EU would be less of a partner and more of a client and would be treated as such, albeit the style might change depending on who sits in the White House. In this scenario, Europeans determine that gravitating in the American sphere of influence is preferable to falling into somebody else’s, even though the economic and political costs of US patronage will rise. Europe would contribute more to common defence via NATO, recognise American leadership in setting its geo-economic agenda and adjust to the US’ technological ecosystem. This scenario assumes that the US remains invested in Europe’s security, that Russia continues to threaten Ukraine and Europe and that China takes a more coercive stance. The EU would largely side with Washington in its rivalry with Beijing and pursue relations with other major powers in ways consistent with US interests. Ultimately, Europe would muddle through in a relatively sheltered strategic fly-over backyard. Transatlantic alignment, defence responsibility, the containment of challengers and de-risking would be the organising principles of a grand strategy of outsourcing.

Option 2: super partner

A second option for Europeans is a grand strategy of investment in multiple frameworks of international cooperation. The overarching purpose would be to bind Europe’s interests to a set of rules, partnerships and institutions to mitigate volatility, offset the EU’s relative weaknesses and play to its comparative advantages. In a world of competition, the EU would stake out a distinctive “super partner” role, joining forces with like-minded actors to tame power politics and advance shared interests. This strategic option mirrors established features of the EU’s identity as a multilateral entrepreneur, but, as with outsourcing, Europe’s vulnerabilities in a harder strategic context give it a different connotation. This would not be a strategy of confident normative projection but one of pragmatic binding to reduce Europe’s exposure to headwinds, given its inherent fragilities. The EU would pursue a multi-vector foreign policy in a multi-aligned world, leveraging partnerships and rules to hedge against risks and strengthen its resilience. On the global stage, the US would grow more insular and estranged from Europe, China would channel its rise through an increasingly Sino-friendly international order and Russia, even with an end to hostilities in Ukraine, would continue to confront Europe. The guiding principles of this strategic option would include competitiveness, partnerships, resilience and multilateralism.

Option 3: Europe first

To manage their decline, Europeans could choose a third approach: “Europe First”. In other words, a grand strategy of retrenchment. The latter can take many forms, from realistic cost-benefit calculations to ideological motivations. In this scenario, retrenchment would not only entail downscaling ambitions but also mirror an increasingly nationalistic wave sweeping through Europe. Cascading crises have sapped confidence in traditional elites, paving the way for illiberal political forces to shape a fortress Europe agenda that is backed up by their political allies in the US and elsewhere. European integration stalls and even reverses in areas like the rule of law. The EU is repurposed to manage the Single Market, implement a protectionist toolbox and further restrict migration. Europeans would continue to invest in their defence but in a disjointed way, relying on NATO to integrate their forces. Relations with China would deteriorate, while transatlantic relations would become ever more transactional despite possible ideological convergence, depending on political developments in Washington. Such a strategic turn would not bode well for Europe’s support to Ukraine, as it could lead to an unjust peace and emboldening of Russia. Some Europeans would, however, consider that this is a price worth paying to be able to focus on narrower domestic priorities, while taking a security-driven approach to relations with the Southern neighbourhood. Transactionalism, economic security and border-fencing are among the organising principles of a “Europe First” strategy of retrenchment.

Decline is a choice, not destiny

These three scenarios are just broad outlines: relevant variables could intersect in many different ways, and wildcards might disrupt any strategy. That said, they help unpack what Europe’s “slow agony” may look like. All decline management grand strategies would afford Europe less prosperity, security, cohesion and agency. Whichever route the current transatlantic negotiations on the Witkoff-Dmitriev plan for Ukraine will take, both the process that led to it and its original content expose the growing risks inherent in any decline management strategy. Alternatively, a strategy of empowering Europe to set its course and punch its weight, while working with partners, would help avoid such a downward drift. It would also set a firm foundation for lasting support to Ukraine and for European enlargement. Although undesirable, however, strategies of decline management grow more plausible by the day, as the gap between the notion of European sovereignty and Europe’s stagnating growth and political turmoil widens.

Increasing recognition across Europe of the gravity of the moment, and of the need to advance Europe’s sovereignty, marks an important shift away from earlier complacency. But strategic blueprints and action plans will not deliver results on the required scale if EU member states do not walk the talk. National capitals, or at least a core coalition of them, must accept that more resources need to be better used through tighter coordination or deeper cooperation, while the potential of the single market needs to be unleashed. Failing that, they will soon need to switch to decline management strategies. More likely, they will simply become passive recipients, or victims, of developments shaped elsewhere. Either way, decline would not be the product of malign fate or be imposed by others: it would be a deliberate choice.

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