The European Union entered the third decade of the 21st century in the grip of a systemic shift. After decades of liberal consensus and ever-deeper integration, the continent now faces a force capable of not just reshaping political balances, but rewriting the very DNA of the European project. The far-right’s rise — from France and Germany to the Netherlands and Italy — is no longer a fringe phenomenon. These movements are poised to seize the reins of governments that together account for more than half of Europe’s GDP.
The core question today is whether this surge is a temporary backlash to the crises of the past decade — migration, energy, economic shocks — or the start of a deeper transformation that could fundamentally redefine Europe’s identity and its place in the global order.
The answer isn’t just academic. It will shape the future of global trade, the architecture of security, the functioning of international institutions, and the strategies of major powers — from the United States and China to Turkey and Azerbaijan.
The Economic Pivot: From Neoliberal Orthodoxy to Protectionist Nationalism
1. Slowing Growth and the Collapse of the Old Model
The economic roots of Europe’s political shift are as significant as the ideological ones. Since the 2010s, the EU has been stuck in a persistent slowdown: average GDP growth over the past five years hasn’t topped 1.2% annually, and in 2024 it was just 1%. The European Commission forecasts 1.1% growth for 2025 and no more than 1.5% in 2026.
That stagnation stems from a cocktail of pressures:
- The energy crunch triggered by collapsing Russian supplies deepened reliance on costly imports and drove inflation to 8–10% in 2022–2023.
- The European Central Bank’s tight monetary policy — with refinancing rates hitting 4.5% — made borrowing expensive and choked investment.
- Aging populations and labor flight (over 500,000 people left Greece alone since 2009) created chronic workforce shortages, especially in low- and mid-skilled sectors.
- The competitiveness gap between the EU’s core and periphery widened: while Poland and Romania saw growth above 3% in 2024, Germany managed just 0.2%.
It’s no surprise the traditional right-wing playbook — deregulation, tax breaks, privatization — has lost its shine. In its place, a harder-edged economic agenda is taking hold, blending anti-immigrant rhetoric and anti-integration sentiment with protectionism, direct subsidies, and fiscal populism.
2. The Paradigm Shift: Right-Wing Without the Liberalism
For decades, Europe’s conservative parties were synonymous with economic liberalism — open markets, limited government, fierce defense of competition. Today’s far right is rewriting that script.
The shift is already visible:
- France: Marine Le Pen and Jordan Bardella want to force public cafeterias to source 80% of their food locally, offer tax breaks to “native” families, and suspend VAT on basic goods.
- Germany: The AfD wants to scrap CO₂ and property taxes, offsetting lost revenue with higher income taxes — a direct expansion of the state’s role.
- United Kingdom: Nigel Farage promises to eliminate VAT on electricity and slash corporate tax from 25% to 15%, without saying how he’d plug the budget hole.
Such policies risk ballooning deficits already over 3% of GDP in most EU states — 4.4% in Italy, 5.2% in France, 4.1% in Spain.
The IMF and OECD warn that if current trends hold, eurozone debt could reach 110% of GDP by 2030. With defense spending rising to 2–2.5% of GDP under NATO commitments and populations aging fast, that’s a recipe for a fresh debt crisis.
3. Italy’s Lesson: Pragmatism Over Populism
Italy offers a revealing case study. Prime Minister Giorgia Meloni, who rose to power with a hard-right image, has in practice pursued a moderately conservative course. Her government is focused on gradually cutting deficits and containing public debt (137% of GDP), despite union pressure and rising social costs.
Meloni’s approach shows that right-wing governments can stick to fiscal discipline. But it also highlights the political price: protests, falling approval ratings, and limited room to maneuver on defense and foreign policy.
Europe’s Economic Architecture Under Pressure: From Internal Crisis to Global Shift
1. Structural Fatigue in the European Model
Europe’s sluggish growth isn’t a blip — it’s a symptom of deep structural fatigue. Built on the “social market economy” model and deep integration, the EU’s economic framework has grown less resilient to shocks.
From 2000 to 2020, eurozone GDP grew by an average of 1.4% a year, compared with 2.1% in the U.S. and 3.5% in South Korea. The gap has widened since the pandemic: in 2023, the U.S. economy expanded by 2.5%, while the eurozone managed just 0.5%.
The reasons are baked into Europe’s economic fabric:
- Demographic decline: Fertility has fallen to 1.46 children per woman (2.1 is needed for population replacement). By 2050, the working-age population will shrink by 16%, creating chronic labor shortages.
- Productivity stagnation: From 2010 to 2023, annual labor productivity growth in the eurozone averaged just 0.7%, compared with 1.4% in the U.S.
- Underinvestment: EU spending on R&D is roughly 2.2% of GDP, versus 3.5% in the U.S. and 4.9% in South Korea.
- Bureaucratic inertia: A labyrinthine decision-making process and the European Commission’s limited powers slow reforms. A year after Mario Draghi’s reform blueprint, none of its key recommendations have been enacted.
Together, these forces are eroding Europe’s global competitiveness — especially in strategic sectors. In 2000, the EU accounted for roughly 25% of the global economy; today, it’s under 15%. China overtook the EU by total GDP in 2021, and India is on track to catch up by 2030.
2. Energy Shock and the New Industrial Map
The 2022–2023 energy crisis was a watershed. Russian gas supplies collapsed from 155 billion cubic meters in 2021 to 45 billion in 2023, triggering an unprecedented spike in energy prices — at one point more than quadrupling.
The shock hammered Europe’s energy-intensive industries — metallurgy, chemicals, fertilizers, glass. In two years, Europe lost 17% of its aluminum capacity, 10% of its chemical capacity, and around 20% of fertilizer producers temporarily halted operations.
Deindustrialization is no longer a looming threat — it’s happening in real time. Germany alone lost roughly 12% of its industrial output from 2022 to 2024, and industry’s share of GDP dropped from 26% to 22%.
Meanwhile, the U.S. is turning up the competitive pressure. The 2022 Inflation Reduction Act (IRA) — worth over $370 billion — showers subsidies on “green” energy and electronics. As a result, giants like Northvolt and BASF are shifting parts of their operations across the Atlantic.
The EU is trying to respond with its Net Zero Industry Act, but its total support is about one-third the size of Washington’s and scattered across member states. That fragmentation deepens the divide between the bloc’s economic core (Germany, France) and its periphery (Spain, Eastern Europe).
3. Tariff Shock: Washington Brings Protectionism Back
Europe’s internal headaches now have an external trigger: the Trump administration’s hardball trade policy. Since January 2025, the U.S. has been tearing up trade deals and preparing new tariff strikes.
In May, the White House announced it was weighing a 35% tariff on cars made in the EU, citing “unfair subsidization” of European automakers. If that goes through, the European Commission estimates EU losses could hit €42 billion a year. Trump has also floated the idea of negotiating one-on-one trade deals with individual EU states, bypassing Brussels — a move that could turbocharge centrifugal forces inside the bloc.
Brussels is drafting mirror measures, including 25% tariffs on U.S. agricultural goods and a rethink of defense procurement. But there’s only so much leverage Europe has. Transatlantic trade topped $900 billion in 2024, and a full-blown tariff war would hit European exporters hardest.
4. Inflation and the Fiscal Wall
Far-right parties are calling for muscular state intervention — subsidies for basic goods, tax breaks for “native populations.” But fiscal reality is a harsh counterweight:
- Eurozone debt stands at 91.2% of GDP; France’s is 112%, Italy’s 137%.
- France’s 2024 budget deficit topped 5.2%, Spain’s hit 4.1%, Belgium’s 4.7%.
- The ECB estimates every additional percentage point of deficit adds about 0.3% of GDP annually to debt-servicing costs at current rates.
There’s little fiscal room left, and by 2030 Europe will face rising pension and healthcare costs of 1.5–2% of GDP every year. If a subsidy and tax-cut race breaks out, the EU risks repeating the sovereign debt crisis of the 2010s — but this time at the scale of the entire eurozone.
5. Europe’s Economic Future: Three Scenarios for 2025–2035
Looking ahead, Europe faces three plausible economic paths:
- Scenario A — “Conservative Adaptation”: The far right fails to capture power in major states. The EU gradually tweaks its model with moderate tax incentives, investment in tech sovereignty, and energy diversification. GDP growth stabilizes at 1.6–1.8% by 2030, and an open trade model endures.
- Scenario B — “Fiscal Nationalism”: The far right takes power in Germany and France, rolling out subsidies and tax perks for domestic industries and tightening migration. GDP growth slips to 0.8–1.2%, deficits top 5%, and uncertainty chills investment.
- Scenario C — “Fragmentation and Tariff Spiral”: The EU fractures into clusters with divergent economic policies. Trade wars with the U.S. and China intensify, the single market weakens, GDP growth sinks below 0.5%, the euro loses its place as the world’s second reserve currency, and the EU’s global economic share drops to 11–12%.
The Political-Structural Shift: Sovereignty vs. Integration
1. The Far Right and the Crisis of the EU’s Architecture
The European Union was built on the gradual transfer of sovereignty from nation-states to supranational bodies — the European Commission, Parliament, and Court. That process, begun with the 1957 Treaty of Rome, delivered decades of stability and growth. But today it faces a challenge unlike even the debt crisis or Brexit.
Far-right movements — from France’s National Rally and Germany’s AfD to Italy’s Lega and Hungary’s Fidesz — aren’t just railing against Brussels’ bureaucracy. They question the very legitimacy of supranational authority, invoking the idea of “reclaiming powers” and reasserting national law over EU law.
This is no longer theoretical. In 2021, Poland’s Constitutional Court effectively placed national law above EU law. Hungary debated a similar move in 2023. If Germany, France, or Italy follow suit, the EU’s legal fabric could start to unravel.
2. Institutional Paralysis and Centrifugal Forces
The far right’s rise brings not only ideological tension but also governance gridlock. The EU’s decision-making system depends on consensus and mutual recognition. When governments inside the Council of Ministers or European Council refuse to follow the common line, deadlock becomes the default.
The Netherlands offers a case in point: after Geert Wilders’ Party for Freedom quit the governing coalition in 2025, the country failed to approve a defense-spending hike to NATO levels and shelved a climate package. Similar trends are visible in Italy and Austria, where right-wing parties demand a rewrite of EU migration law in favor of national control.
This paralysis fuels fragmentation. Countries are increasingly cutting bilateral deals outside the EU framework — gas supply agreements with Qatar, infrastructure partnerships with China — undermining the principle of a unified external policy.
3. Clashing Sovereignties and Legal Collisions
If far-right parties seize power in major EU states, law will become the first battleground. Their platforms already include moves that directly contradict EU treaties:
- Scrapping the supremacy of EU law (Le Pen, AfD)
- Curtailing free movement within the Schengen Area
- Unilateral migrant deportations in violation of the 1951 Geneva Convention
- Pulling out of climate commitments under the European Green Deal
Such steps would create a dual legal reality: EU laws would remain on the books, but member states would stop enforcing them. That would strike at the EU’s core — its single market and unified legal order.
History offers a warning. In the 1960s, France’s so-called “empty chair” policy — a boycott of EU institutions — paralyzed the bloc for almost a year. That crisis eventually ended in compromise. Today’s rupture could be far deeper: if states start ignoring European Court rulings or Commission directives, the Union risks becoming a hollow shell — still standing, but stripped of real power.
4. Political Map: A New Axis Inside Europe
The far right’s rise isn’t evenly distributed, but it’s already redrawing the geometry of European politics. Three distinct “axes” are emerging across the continent:
- The National-Conservative Sovereignty Axis: Poland, Hungary, Italy, and to a degree Austria and Slovakia — states pushing to curb supranational authority and prioritize “national interests.”
- The Integrationist Core: Germany, Belgium, the Netherlands, and the Nordic countries — defenders of deeper political and economic union.
- The Wavering Center: France, Spain, and the Czech Republic — swing states where upcoming elections will decide the trajectory.
If the far right wins in France and Germany, the balance shifts dramatically: the sovereignty bloc becomes dominant, and the “integrationist core” is reduced to a minority voice.
5. Political Futures: How the EU’s Institutional System Could Evolve
- Scenario A — “Managed Divergence”: The far right gains influence but doesn’t break the Union. National parliaments gain more power, and the EU reforms itself, accepting flexibility and a “multi-speed Europe.” Integration continues, but in a more asymmetrical form.
- Scenario B — “Constitutional Crisis”: National courts and governments increasingly elevate domestic law over EU law. The European Court of Justice loses authority, the European Commission loses enforcement tools. The Union survives, but its decisions become optional — a shift toward a “commonwealth of sovereign states.”
- Scenario C — “Fragmentation and Breakup”: A wave of unilateral moves by major states leads to treaty revisions or exits (Frexit, Italexit). The EU splinters into regional blocs, the euro loses its status, Europe’s foreign-policy clout collapses, and the global center of gravity tilts decisively toward the Indo-Pacific.
Geopolitics: Europe in a Changing World
1. Strategic Priorities Upended
If Europe enters an era of far-right dominance, its foreign policy will transform as profoundly as its economy and institutions. The long-standing focus on multilateralism, human rights, and global trade liberalization — Europe’s calling cards for decades — will give way to something very different.
First, the relationship with the United States will shift. Donald Trump has already set out to renegotiate transatlantic deals and apply tariff pressure. Unlike centrists, far-right leaders are ready to hit back in kind. That could fracture the transatlantic alliance — even inside NATO. Defense spending in Europe will rise, but strategic coordination will weaken.
Second, ties with Russia and China will likely deepen — not out of ideological affinity but cold pragmatism. Germany’s AfD has already called for resuming Russian gas imports, and Marine Le Pen labeled sanctions “self-destructive” in 2024. Such moves would reshape the Ukraine war dynamic and erode the West’s sanctions regime.
Third, Europe will turn toward Africa and the Middle East in search of labor and raw materials. But under far-right governments, that will look less like partnership and more like transactional leverage — deals to repatriate migrants and trade investment for border control.
2. Fallout for the Global System
Europe’s rightward turn would ripple far beyond its borders:
- Global trade would fragment: tariff wars between the U.S., EU, and China would become structural, and global supply chains would splinter into regional networks.
- Global institutions would weaken: the WTO and OECD would lose clout as major powers pivot to bilateral deals and preferential trade zones.
- Capital flows would shift: investment would migrate to more predictable jurisdictions — primarily the U.S. and Asia. The EU is already losing ground: foreign direct investment fell 23% in 2024 compared with 2021.
By 2035, Europe might not just be weaker — it could become secondary in the global economy. Its share of global GDP could slip to 11–12%, and the euro could lose part of its reserve currency status.
Strategic Takeaways and Recommendations
- Rebuild EU institutions to prevent decision-making paralysis — possibly by expanding qualified-majority voting in sensitive areas and strengthening the European Parliament’s role.
- Rethink fiscal policy: new rules must balance budget discipline with strategic investment in technology, infrastructure, and defense.
- Counter U.S. tariff pressure with a bolder industrial policy — building European value chains in critical sectors like semiconductors, hydrogen, and AI.
- Recalibrate migration policy: rejecting uncontrolled openness shouldn’t mean demographic suicide. The EU needs 2–3 million new workers annually just to sustain economic activity.
- Update Europe’s foreign strategy: deeper engagement with Turkey, Azerbaijan, and Central Asia is key to building alternative supply routes and reducing dependence on Russia and China.
… Europe now faces a choice that will define its future for decades. The far right’s rise isn’t a passing storm — it’s a symptom of deeper forces: economic exhaustion, demographic decline, institutional stagnation, and geopolitical pressure.
The real question isn’t whether the far right will take power — that seems almost inevitable. It’s whether European societies can turn this upheaval into a catalyst for renewal or whether they’ll let it shatter a project that has symbolized integration and peace for seventy years.
Europe’s fate — whether it remains a pole of the global system or fades into a regional bloc haunted by its past — hangs on that answer.