By Dr Alexander Wolf, Head of the Berlin Office, Hanns-Seidel-Foundation
Published on
The opinions expressed in this article are those of the author and do not represent in any way the editorial position of Euronews.
While millions of Europeans are renewing their gym contracts or committing to “Dry January” these days, this ritual of private self-optimisation at the turn of the year seems strangely out of date.
2025 was not just another turbulent year in the history books, but the year in which the old world order was finally laid to rest.
Anyone who on 1 January 2026 looks back honestly will realise that good intentions are no longer enough – a survival strategy is needed.
The events of the past year – from the tectonic shifts of Liberation Day in April to the open attack on the independence of the US Federal Reserve – were the final warning shot across the bow of the old continent.
The message many in Berlin, Brussels and Paris still refuse to accept is clear: the West as we once knew it no longer exists.
For the political and economic outlook in 2026, this demands a radical recalibration. The era of strategic naïveté is over.
We can no longer afford New Year’s resolutions that are forgotten by February.
What Europe needs now is a hard, unsparing look at reality – and the resolve to abandon three comfortable illusions that have lulled us into a false sense of security for far too long.
Illusion one: ‘The US will come back’
The hopeful glance across the Atlantic has become a political reflex in Europe. In 2026, we need to unlearn that reflex. The idea that transatlantic relations will simply snap back to the familiar normality of the 1990s after a brief period of disruption is both dangerous and paralysing.
The capital markets, often the most honest barometer of geopolitical reality, have already passed their verdict. Gold rose by around 60% in 2025, while global investors steadily cut their exposure to the dollar and repositioned their assets in safe havens. This is not cyclical noise.
It is a structural vote of no confidence in the old reserve currency. For Europe, the conclusion is unavoidable: 2026 must become the year of financial and security emancipation.
Europe has to learn how to swim without the “big brother”. This is not anti-Americanism; it is sovereignty.
A European pillar within NATO that actually deserves the name, and a euro area with deeper capital markets capable of absorbing shocks from overseas on its own, are no longer nice-to-have projects. They are the life insurance of the European model. Illusion
Illusion two: ‘The market will sort things out with China’
For decades, the mantra in Germany and across Europe was “change through trade”.
The assumption was that sufficient exports would eventually lead to convergence. By 2025, that belief had been decisively disproved. Competition with China is not a normal contest for market share; it is a systemic struggle for displacement.
When innovation in Shenzhen unfolds at a pace Europe can only dream of, this is not fair competition. It is an attempt at technological dominance. At the same time, the escalation of US tariffs last year shook the global trading order and pushed Europe uncomfortably between the fronts.
Europe’s response in 2026 must no longer be plaintive or defensive. We need to stop treating industrial policy as a mortal sin against the market economy. Targeted support for key technologies such as electric mobility, robotics and artificial intelligence is not a traditional “subsidy” this year. It is self-defence.
Anyone who wants “Made in Germany” or “Made in Europe” to still carry weight in 2036 must regain strategic control over supply chains and production capacity.
Markets can regulate many things. They do not regulate geopolitics.
Illusion three: ‘AI will take my job’
While Europe hesitates at the macroeconomic level, hysteria often dominates at the individual one. Fears that artificial intelligence will wipe out jobs on a massive scale ignore a basic demographic reality: Europe is shrinking.
The bottleneck is labour, not employment. Labour shortages will persist well beyond the coming year, whether we like it or not. Yet the same rule applies here: those who stand still will lose. 2026 will be the year of specialists.
AI is not a job killer; it is a killer of mediocrity. It punishes average performance and rewards excellence. Those who carry out generic tasks that algorithms can perform faster and more cheaply will come under pressure.
Those who combine deep human expertise – in crafts, strategy, care or research – with technology will be among the winners. For education systems and companies, this means a shift away from training broad generalists and towards cultivating deep skills. Technology is the lever that allows Europe to maintain prosperity despite a shrinking population – but only if the continent masters it rather than merely consumes it.
The imperative of the moment: strategic autonomy
What follows from the collapse of these three illusions?
The guiding principle for 2026 cannot be “growth at any price” or a “return to normality”. It has to be strategic autonomy. Europe is on its own.
Neither Washington nor Beijing will rescue the continent. Both pursue their national interests with ruthlessness.
Europe has yet to relearn. This may sound bleak, but it is not pessimism. It is realism – and realism is the first step towards strength.
Europe has immense substance: one of the world’s largest internal markets, deep intellectual resources, financial power and a long history of resilience.
2026 must be the year in which this substance is finally translated into geopolitical clout. Instead of resolving to “exercise more”, Europe should resolve to “embrace reality”.
Those who enter the year with a clear strategy and without illusions will not only weather the storm but learn to navigate it.
Those who wait for the wind to die down and the old world to return will, sooner or later, capsize.
Dr Alexander Wolf serves as Head of the Berlin Office at the Hanns-Seidel-Foundation.