The recent peace initiative by the US to put an end to the Russia-Ukraine conflict exposed the fissure points of continental Europe. Donald Tusk, the Prime Minister of Poland said “It is striking but it’s true. Right now, 500 million Europeans are begging 300 million Americans for protection from 140 million Russians who have been unable to overcome 50 million Ukrainians for three years.”
The statement of the Polish PM best describes the political scenario of the West. Decline in geo-political importance of Europe, economic stagnation, and illegal immigration primarily from certain Asian and African countries created new challenges for the liberal democracies of Europe. In the last three decades, European nations increasingly depended on NATO for their security issues against all possible threats from the East – perceived or real. Because of that , the numberr of member-countries in NATO increased from 16 in 1991 to 32 in 2025. It is natural that the European nations, particularly the smaller ones will be unnerved if the US takes a neutral stand when a member nation or a nation aspiring to be a part of NATO is in conflict with a non-NATO nation.
After the summit of US and Russia at Alaska on August 15 and at short notice, the German chancellor, French President, British Prime Minister, Italian Prime Minister, Finnish President and President of the European Commission all rushed to the US to ensure that the peace solution was not tilted towards Russian demands. The events of August 2025 only exposed the increased irrelevance of Europe in global geo-politics and dependence of the European nations on the US when it comes to a perceived threat from Russia. In this respect, the situation seems to have not changed much since cold-war days. The economic scenario of Europe is also not good. GDP growth of Germany in the year 2024 was 0.2 per cent, Belgium had a growth of 0.3 per cent, Italy had 0.7 per cent, France had 0.8 per cent, and the UK had 1.1 per cent.
The long-drawn war between Russia and Ukraine raised the price of fuel in the European market. This along with low labour productivity coming out of rigid labour market regulations and lack of business innovation, primarily because of lack of venture capital, led to economic stagnation in major European economies. Out of the top 500 Fortune Global companies, only 143 were from Europe in 2021. The number declined by 15 in two decades. Amongst the top 10 companies in the list of 2024, not a single European company is there. China has 139 companies in the list as against 128 of the US. Out of 44 countries in Europe, 27 are members of the European Union (EU). The budget of the European Union is essentially a redistributive tool “to promote cohesion across the bloc”.
Their receipts primarily come from import duties collected from goods coming from outside the Union, a share of the national value added tax and national contributions based on Gross National Income. Whereas the mighty powers of continental Europe viz. Germany, France, Netherland and Italy contributed heavily, Poland, Greece, Hungary, Romania and some others were the net beneficiaries. As of 2023, in terms of million euros, the net pay-out of Germany was 19,753, that of France was 9,333. In contrast, net receipt of Poland was 7,001 million Euros and that of Greece was 3,609. The unemployed and the poor people of the bigger European nations often tend to equate reasons of their misfortune with this redistributive mechanism across the countries.
Next comes the issue of illegal migrants. In the 1960s, immigrants in large numbers started coming to France, the UK, Netherland etc. from their erstwhile colonies. In the 1980s many European nations started recruiting ‘guest workers’ from Africa and Asia. The illegal immigration from Africa and Asia has been occurring in large numbers only since the 1990s. The number increased to crisis proportions in 2015. In that year 1.3 million people came to Europe, primarily from Syria. A substantial number of these illegals either seek asylum alleging p olitical or religious intimidation in their own country or ask for refugee status after a hideout of a certain number of years.
Many claim themselves as ‘stateless’. In Sweden, the immigrants (first and second generation together) constituted more than a fourth of the country’s population. France had the second largest foreign-born population in Europe, next only to Germany and tied with the UK. Syria, Afghanistan, Iraq, Pakistan, Nigeria, Somalia, Gambia, Iran, Bangladesh, and Senegal are the non-European countries from where the asylum-seekers come in huge numbers. Beside humanitarian considerations, the liberal outlook of Germany, France, Sweden and other West European nations had an economic angle also in accepting the immigrants. Population growth in many such developed European nations is dwindling and in certain sectors, locals are unavailable for low-grade jobs. The immigrants of non-European origin are a significant part of the informal economy.
However, an increasing number of immigrants may in the long run impact the identity and culture of the nations. Liberal immigration policies of European nations are being increasingly challenged by the Conservatives and far-right political groups. Far-right parties recorded their best performance in the European parliament election (2024) and gains were especially significant in France, Germany, and Italy. The hope of resurgence of a liberal democratic Europe, which was expected in the post-Cold War period in 1990s, seems to have been belied over the years.
(The writer, a former civil servant, is an independent commentator on socio-economic issues and public policies.)