Thirty-three trillion euros. That is the savings of European households, one-third of which finances projects abroad [2]. At the same time, the gap in real disposable income per capita between the EU and the United States has doubled in twenty years [2].

The Union does not have a money problem. It has a rules problem. And 2027 is the opportunity to change them, or to confirm that they will remain as they are.

A solid track record, a real slowdown

The single market has delivered on its initial promises. Its trade impact was three times greater than under a standard trade agreement [1]. The first twenty years of reform represented a gain of 2% of GDP and nearly 1.5% of employment, according to the European Commission [1]. Hungary, for example, sees its real GDP increase by 14.7% compared to a scenario without a single market [1]. These benefits represent, however, barely half of what a fully realized single market could produce [1].

Since 2000, the engine has slowed. Real disposable income per capita has increased nearly twice as much in the United States as in Europe over this period [2]. The Draghi Report of September 2024, 400 pages of diagnosis, is harsh: the Union is accumulating a worrying lag in economic and technological terms [2].

The technological lag is particularly visible. In 2024, 70% of foundational AI models have been developed in the United States since 2017 [18]. Three American cloud providers account for more than 65% of the global and European market [18]. There is no European company with a market capitalization above 100 billion euros created in the past fifty years [18]. In the United States, six companies valued at over one trillion euros have been created during that same period [18].

On defense, Europe has made up a decade of underinvestment. In 2014, only 3 members of the Alliance dedicated 2% of their GDP to defense [5]. In 2024, there were 18 out of 31 [5]. In 2025, military spending by the 32 NATO countries grew by 20% in a year [4]. The Hague summit set the following target: 3.5% of strictly military spending by 2035, plus 1.5% for security-related spending [4].

Citizens, for their part, have never had more faith in the Union. Spring 2025 Eurobarometer measures the highest level of trust in eighteen years [6]. Trust in the European Commission has become majority for the first time since 2013-2014 [6]. France stands out: in autumn 2025, only 27% of French people declared they trust the EU [7]. The European average was 48% [7].

Unanimity as a machine to neutralize what citizens demand

Trust is rising everywhere. It runs up against an architecture designed for 6 and then 15 sovereign states, not for a bloc of 27 nations with divergent interests facing Sino-American rivalry [19].

Several areas remain subject to unanimity voting: common foreign and security policy, defense policy, operational police cooperation [19]. These are precisely the areas where the demand for European sovereignty is strongest. It was only the lifting of the Hungarian veto that made it possible, in June 2026, to formally resume accession negotiations with Ukraine [12]. For months, one government had held hostage the enlargement policy of twenty-six partners.

The budget obeys the same lock. The Union spends approximately 1% of its GDP [15]. The IMF deems this envelope structurally insufficient to finance the necessary transitions [15].

It is financed 70% by the contributions of member states, brought to record levels [9]. For the 2028-2034 period, the Commission proposes a commitment ceiling of 1,985 billion euros, or 1.26% of European gross national income [9]. Any new own resource requires unanimity of the Twenty-Seven. The same lock that blocks foreign policy blocks fiscal policy.

Modifying the treaties first requires a simple majority of 14 member states out of 27 to open negotiations [19]. Any legally binding agreement must then be ratified by all 27 [19]. Some states may organize a referendum. In 2005, this approach had led to the rejection of the constitutional treaty [19].

The gap between discourse on strategic sovereignty and actual decision-making rules stems from unsuitable architecture. “For too long, we have been able to rely on security provided cheaply by the United States, inexpensive products manufactured in China, and affordable energy purchased from Russia. That era is over,” stated the 2024 strategic agenda of the European Council [13]. The institutional inadequacy, however, persists.

Two simultaneous ruptures that leave no more room for maneuver

American disengagement has been part of US domestic politics since 2016. Europe can no longer rely on the American security umbrella or on post-war multilateralism. An autonomous European defense becomes a condition for the survival of the Union as a space of freedom. This shift toward a multipolar world is probably irreversible, and Europeans must build their own strategic identity through future choice, as Ivan Krastev analyzes in The Long Road to Democratic Decline (2025) [22].

The economic and technological rupture is equally structural. The 2024 Draghi Report puts the minimum annual need for additional investments at 750 billion euros [2]. The Commission and the IMF estimate that such an effort would increase output by approximately 6% over fifteen years [17]. The current investment landscape is fragmented, with significant disparities in access to private financing for innovative companies [2].

European savings reached 33 trillion euros in 2024 [2]. One-third finances projects abroad [2]. Financial fragmentation, not lack of savings, creates the bottleneck. Without financial union, the single monetary policy exacerbates divergences between member economies instead of resolving them, as shown by Agnès Bénassy-Quéré’s work on the policy mix in a world of structural supply shocks [20].

Institutions, monopolies, and culture determine whether a wave of innovation leads to growth or stagnation [21]. If American and Chinese AI giants reproduce the logic of established interests that blocked progress in the past, a Europe without its own champions will be doubly dependent, for its security and its productivity. Technological progress creates shared prosperity only if citizens and institutions shape its directions [24]. A fragmented Europe does not.

The actual causal chain, before the instruments

Debates about European sovereignty often fall into a trap: responding to symptoms with devices that are themselves one of the causes.

Favoring national exporters over European competition weakens the single market that is the basis of all power. Multiplying national budget vetoes to preserve fiscal sovereignty prevents financing European public goods (defense, research, digital infrastructure) that are the condition for any real sovereignty. Refusing enlargement out of fear of new voices in the Council reduces the geopolitical weight of the Union against powers that do not share its values.

The actual causal chain works like this. Rules of unanimity give each state a veto right over European public goods. This right is used as a bargaining lever by governments facing their national electorates. European public goods are therefore not produced at the level of needs.

The gap widens between citizen expectations of a protective Europe and a Europe that negotiates. Mistrust rises, particularly in France, where 27% of citizens declared they trust the EU in autumn 2025 [7]. This in turn fuels parties that instrumentalize Europe as a scapegoat. The answer lies in the decision rule that makes collective action impossible, not in more redistribution between member states.

European markets are structurally less concentrated than American markets, a real competitive advantage documented by Thomas Philippon [26]. This advantage can only materialize if the Union has the regulatory capacity to defend it against companies whose countries of origin support them massively. This regulatory capacity requires decision-making capacity.

Activate the bridge clauses or accept paralysis at 35

The ongoing enlargement engages a ten-year window that will not reopen. The Ukrainian government aims to provisionally close negotiations by the end of 2028 [11]. The Commission judges this goal conditional on accelerating reforms, particularly in the rule of law [11][12]. A EU of 33 or 35 states with current rules would be permanently paralyzed. Enlargement without institutional reform produces a dilution of collective action capacity [12].

The central trade-off for 2027 is there: activate the bridge clauses toward qualified majority, or let permanent veto rights extend to each new member.

Bridge clauses allow replacement of unanimity voting with qualified majority voting in specific areas, without formal treaty revision [19]. Their progressive activation in foreign policy, taxation, and own resources is the realistic path. France and Germany have carried it rhetorically without implementing it. The condition for a credible 2027 presidency on Europe is to translate this commitment into action.

On defense, these bridge clauses are accompanied by common financing conditional on European preference. This is the only lever on purchasing preference decisions. The work on SAFE and EDIP funds is detailed in the note “The fleet is ready, the arsenal is not.”

On financing, the Draghi Report puts annual investment needs between 800 and 1,000 billion euros [2][17]. The energy transition alone represents just over 100 billion per year [2]. These amounts exceed what public budgets can cover alone. The savings and investment union, renamed as such after the 2024 Draghi and Letta reports, aims to mobilize private capital to finance green and digital transitions [3][15][16]. It requires harmonizing savings taxation, creating long-term European products, and progressing toward a single financial regulator.

On budget, the Commission presented in July 2025 its proposal for the 2028-2034 financial framework, with an envelope of 2,000 billion euros over seven years [9]. Complementary own resources (electronic waste, tobacco products, large companies) would generate 65.6 billion euros per year [9]. They would make it possible to finance new challenges, repay the recovery plan, and reduce dependence on national contributions [9].

France has an objective interest in this lever. Its contribution to the European budget has risen from an average of 20 billion euros per year on the 2014-2020 framework to 29 billion planned for 2026 [10]. Own resources drawn from digital platforms and carbon giants would lighten this burden.

On industrial policy, an environment favorable to creative destruction (anti-monopoly regulation, access to venture capital, researcher mobility) is more effective than subsidized national champions [27]. The state can additionally co-create value by directing common spending toward public goods that markets alone do not produce at the level of strategic needs: fundamental research, digital infrastructure, pharmaceutical sovereignty [23]. Applied at the European scale, this requires completing the services single market, competition policy adapted to rivalry with American and Chinese giants, and a venture capital directive that changes the financing structure of young companies.

On defense, investment needs for the European defense industry have been evaluated at 500 billion euros over ten years [4][14]. This financing cannot come solely from national budgets without squeezing other items. Without robust coordination rules, national spending produces costly duplications and capability gaps [25]. Spending more together requires precisely the decision-making capacity that unanimity prevents from being built.

The real bifurcation is not being played out between an abstract federal Europe and preserved national sovereignties. It is being played out between a Europe that equips itself with decision-making and financing instruments commensurate with geopolitical rivalry, and a Europe that continues to display ambitions without giving itself the means. At the end of the second path, citizens will have to choose between two symmetrical illusions: national retreat or blind delegation.

Sources

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[2] Mario Draghi, The Future of European Competitiveness, European Commission, September 9, 2024, https://www.assemblee-nationale.fr/dyn/content/download/871338/file/Note%20n%C2%B0%201%20R%C3%A9sum%C3%A9%20rapport%20Draghi.pdf (accessed 09/08/2026).

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