The European Union possesses enormous economic, technological, and military potential, yet it remains strategically constrained due to institutional fragmentation, the unanimity requirement in foreign and security policy, and the absence of effective exclusion mechanisms. Persistent economic and ideological divisions between Eastern and Western Europe exacerbate internal tensions, fostering perceptions of inequality and fuelling nationalist and anti-EU sentiments in the East. While the EU ranks among the world’s most powerful actors, its inability to organize and leverage its resources effectively limits its geopolitical influence. To become a credible strategic power, Europe must strengthen institutional cohesion, implement qualified majority decision-making in key areas, develop centralized command structures, and close the economic gap between East and West.

Institutional Structure: EU Institutions as State Bodies

The European Union was formed after World War II to ensure peace, stability, and economic cooperation in Europe. The European Coal and Steel Community in 1951 and the Treaties of Rome in 1957 established its economic foundation. Over decades, it grew from an economic agreement to a political union with common institutions, a single market and currency, and greater foreign and security policy alignment.

Now with 27 member states, about 450 million people, and an 18 trillion-euro GDP, the EU stands as a major global economic and trading bloc. Its shared powers make it a significant international actor.¹

Within this system, some institutions possess genuine political power and can be functionally compared to the state bodies of a country. At the top is the European Commission, which acts as the Union’s executive. It initiates legislative proposals, monitors their implementation, manages the budget, and represents the EU internationally.² Legislation is jointly adopted by the European Parliament and the Council of the European Union.³ The Parliament assumes parliamentary oversight and legislative functions, while the Council of the EU acts as the Council of Ministers, coordinating policy, adopting laws, and approving the budget.

The European Council, composed of the heads of state or government of the member states, sets the Union’s strategic direction and defines political priorities comparable to a summit of heads of state.⁴

Legal oversight is exercised by the European Court of Justice, which ensures the uniform application of EU law. The European Central Bank is responsible for the monetary policy of the Eurozone. As an independent central bank, it guarantees price stability and provides economic stimulus.⁵ Taken as a whole, this institutional structure creates a unique form of separation of powers at the supranational level.

Institutional Decision Constraints and Veto Power

Despite this institutional architecture, the EU lacks decisive strategic instruments of power. In foreign and security policy, key decisions must be adopted unanimously by the Council under the treaties.⁶ This unanimity rule grants each member state a de facto veto and allows governments to block or delay collective decisions to extract concessions in unrelated policy areas. Unlike majority-based state systems, the EU has no operational mechanism to exclude or bypass systematically obstructing members. Formal expulsion is not provided for in EU law.

Article 7 procedures are limited to sanctioning serious violations of EU values and cannot resolve strategic deadlock. Even in the strongest case, they can suspend voting rights but cannot force withdrawal or exclusion, although a member state may choose to withdraw voluntarily.⁷

Recent cases illustrate the structural vulnerability. In 2025, Hungary blocked joint EU conclusions on Ukraine through abstention, which prevented a unified positioning. Shortly thereafter, previously frozen EU funds of approximately 545 million euros were released.⁸ Similarly, Slovakia delayed the EU’s 18th sanctions package against Russia in the summer of 2025 to obtain energy-related concessions, including continued Russian gas imports until 2027. Only after assurances did Slovakia approve the package.⁹

The structural effect is clear. A system requiring unanimity in strategic matters enables transactional obstruction. In contrast to power blocs such as the United States, China, or Russia, which can execute strategic decisions through majority rule and centralized authority, the EU remains procedurally constrained in foreign, security, and geostrategic action.

The EU Between Economic Union and Geopolitical Actor

Overall, the EU combines elements of executive, legislative, judicial, and monetary authority but remains limited in core strategic domains such as unified foreign policy, military command, and coordinated geopolitical execution. Member states continue to prioritize national economic and foreign policy interests when they conflict with collective European positions. This pattern existed during UK membership and remains visible today in differing national alignments toward Russia and the United States.

From a military and strategic standpoint, the Union’s weakness is not a lack of capacity but a lack of integrated command and decision structures. Twenty-seven defense systems, procurement regimes, and planning processes fragment available power and reduce usable strategic output.

Military Capacity Without Unified Command

In aggregate terms, the EU represents one of the world’s largest military capability concentrations, but without unified command authority.¹⁰ It does not possess integrated armed forces and relies operationally on NATO structures and United States strategic enablers.

According to Global Firepower rankings, four EU states, namely France, Germany, Italy, and Spain, rank among the world’s top 20-armed forces.¹¹ Several EU members are also among the top ten global arms exporters.¹² Defense expenditure reached about US$374 billion in 2024, which is around 1.9 percent of GDP, and is projected at roughly US$428 billion in 2025, or about 2.1 percent. Russia spent about US$149 billion, China about US$314 billion, and the United States about US$997 billion.¹³ With concentrated effort and political coordination, the EU could achieve full autonomy in producing advanced weapons systems within a relatively short timeframe.

Notably, even the American F-35—the flagship fighter aircraft of the United States Air Force—relies significantly on European industrial capabilities. Around 25 percent of its components are supplied by European partners such as the United Kingdom, Italy, Germany, Denmark, and Norway.

EU land forces operate several thousand modern main battle tanks, including Leopard 2, Leclerc, Ariete, and Challenger 2 platforms, generally superior to most Russian legacy systems in sensors, fire control, and protection. EU air forces field more than 2,000 modern combat aircraft such as Eurofighter, Rafale, F-35, F-16, and Gripen.¹⁴ These are supported by AESA radar, networked warfare capabilities, AWACS, and layered air defense systems, including Patriot, SAMP T, and IRIS T. Russia fields roughly 1,000 to 1,200 combat aircraft, many older models, and has suffered substantial equipment and personnel losses in Ukraine.

Collectively, EU states maintain around 1.4 million professional soldiers, while Russia has roughly 1.5 million, although force quality has been degraded by wartime losses. From a conventional deterrence perspective, Europe can defend its territory and deny large-scale aggression. Nuclear deterrence is partly covered by France, with the United Kingdom as an additional European nuclear power outside the EU framework.¹⁵

The limiting factor is organizational. Fragmentation, incompatible systems, and unanimity-based political control convert military mass into defensive capability rather than coherent geopolitical power projection.

East-West Economic Gap, Trade Imbalances, Migration, and Political Effects

Despite more than two decades of enlargement, substantial economic and structural differences persist between Western and Eastern EU member states. Countries that joined in and after 2004, including Poland, the Czech Republic, Slovakia, Hungary, the Baltic states, Slovenia, Romania, Bulgaria, and Croatia, frequently perceive themselves as unequal participants and often see their role as labor reservoirs and sales markets for Western producers.

Trade data illustrates the imbalance. Germany records intra-EU trade volumes of roughly 1.4 trillion euros, followed by the Netherlands with about 400 billion euros, Italy with about 350 billion euros, and Belgium with about 300 billion euros. Major Eastern members such as Poland reach about 200 billion and Romania about 150 billion, while several others remain below 100 billion. No Eastern member state records a positive intra-EU trade balance.¹⁶

Income and purchasing power gaps remain pronounced. GDP per capita, expressed in purchasing power standards (PPS), is a real output measure adjusted for price level differences across member states and used for cross-country comparability. In 2024, this indicator ranged from 66 percent of the EU average in Bulgaria to 241 percent in Luxembourg, with no Eastern member state exceeding the EU mean.

Average annual full-time adjusted salaries, defined as gross earnings converted into full-time equivalents to ensure comparability across labor markets, also show a significant East-West divide. In 2024, the average annual salary stood at approximately 45,584 euros in Western member states, compared with 22,021 euros in Eastern member states, against an EU average of 39,800 euros.

This divergence persists despite broadly comparable price levels for industrial goods across the Union, underscoring that the gap is driven primarily by productivity and income structures rather than uniform cost differentials.¹⁷

These disparities drive sustained westward migration. In 2024 alone, about 350,000 people moved from southeastern and eastern EU states to the West. The Western Balkans lost about 4.4 million people between 1990 and 2015. Bulgaria’s population has declined by roughly 22 percent since 1990.¹⁸

Without immigration or automation, the eastern workforce could shrink another 10 percent by 2035. Western Europe counts roughly 348.2 million inhabitants, while Eastern Europe has about 101.4 million, a demographic imbalance that, if this trend continues, will increasingly depopulate the Union from East to West.¹⁹

Structural weaknesses reinforce the divide through lower capital access, weaker innovation ecosystems, limited branded industrial output, and slower convergence since the Eurozone crisis. The economic gap produces psychological and political effects, including perceptions of second-tier status, reduced trust in EU fairness, and growing support for sovereignty-focused and anti-EU political movements in parts of Eastern and Southeastern Europe. Electoral developments in Slovakia and Romania illustrate this trend.

The annulled Romanian presidential election of 6th December 2025, following intelligence findings of Russian interference, further exposed political polarization and uneven pro-European alignment.²⁰

Institutional and Historical Causes of the East-West Divide within the EU

Many of today’s EU member states in Eastern and Southeastern Europe have histories marked by domination from Western powers, and these past experiences continue to influence their political and social mindsets.

Several Slavic territories were under extended rule by the Habsburg Monarchy (Austria). The historical region of Bohemia, which corresponds to the central and western part of the modern Czech Republic, was incorporated into the Habsburg domains from 1526 until the end of World War I in 1918. Similarly, Moravia, making up the eastern part of today’s Czech Republic, remained under Habsburg rule throughout the same period.²¹ The Kingdom of Galicia and Lodomeria, established after the First Partition of Poland in 1772, remained a Habsburg crown land until 1918; this territory is now divided between southern Poland and western Ukraine.²² The Partitions of Poland in 1772, 1793, and 1795 were carried out by Austria, Prussia (now part of modern Germany), and Russia, and progressively eliminated the sovereign Polish–Lithuanian Commonwealth from the map until Poland was restored only after World War I in 1918.²³

France also exercised direct control in parts of Eastern and Southeastern Europe during the Napoleonic Wars. After the Treaty of Tilsit in 1807, Napoleon created the Duchy of Warsaw from territories ceded by Prussia; this Napoleonic client state comprised central parts of what is now Poland and existed until its dissolution in 1815 at the Congress of Vienna.²⁴ Furthermore, the Illyrian Provinces were established as part of Napoleon’s First French Empire from 1809 to 1814 along the Adriatic Sea; they included large sections of present‑day Croatia and Slovenia and extended into the smaller of Montenegro and Serbia under French administration.²⁵ These historical experiences help explain contemporary sensitivities toward perceived paternalism from Western EU states.

After World War II, countries such as Poland, the Czech Republic (including Bohemia and Moravia), Slovakia, Estonia, Latvia, Lithuania, Bulgaria, and Romania were liberated from the Third Reich (Germany) primarily by the Soviet Red Army, and in the subsequent post‑war order came under Soviet political influence and control during the Cold War period.²⁶

Transition, the Collapse of Socialism, and the post-Soviet Era in Eastern and Southeastern Europe

Institutional and structural transition factors rooted in the post-socialist and post-Soviet transformation compound the gap. Eleven Eastern and Southeastern EU members, namely Bulgaria, Estonia, Croatia, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia, the Czech Republic, and Hungary, transitioned from socialist systems to market economies with significant output loss and unemployment shocks. Where early lustration (lustration is the legal and administrative process of vetting and restricting individuals from public office due to their past affiliation with or collaboration under former authoritarian regimes) and institutional cleansing occurred, such as in Estonia, the Czech Republic, Poland, Slovakia, Latvia, and Lithuania, institutional quality and innovation capacity improved faster.²⁷

Elsewhere, former elite networks persisted and contributed to opaque privatizations, clientelism, corruption, and weak meritocratic structures. Informal influence networks continue to affect investment conditions, procurement, and administrative decisions.

Formal institutions may function, but real decision pathways are not always transparent—where such networks are absent, higher corruption indices are typically observed.²⁸ This deters investors and reinforces dependency patterns, which weaken the Union’s overall cohesion.

Threat to Coherence and Global Position

The combined economic, demographic, and institutional divide constitutes a structural risk to EU stability and strategic weight. Without targeted investment, industrial development, and institutional strengthening in Eastern Europe, the Union remains economically fragmented and politically vulnerable in a period of global power competition.

Why Europe can remain a global power bloc and what it must do to achieve this:

1. Closing the Structural East-West Economic Gap and Increasing Population Migration

The internal economic divergence between Western and Eastern member states remains pronounced. GDP per capita (PPS) and wage levels in the EU range from significantly lower values in Bulgaria (approximately €1,360 in the lower wage segment) to significantly higher levels in Luxembourg (approximately €6,300 in the upper segment).²⁹ On average, annual salaries in Western member states are more than twice as high as those in Eastern member states. These disparities contribute to labor mobility within the Union, including the emigration of highly skilled professionals and broader intra-EU population flows. In 2024, approximately 1.5 million people moved to another EU Member State as part of intra-EU mobility.³⁰A significant share of this movement is associated with flows from Eastern and Southeastern Europe toward Western Europe.

These developments must be addressed through coordinated EU financial assistance programs and targeted national demographic measures.

2. Overcoming Fiscal Fragmentation: The Case of Ukraine

The EU has so far provided Ukraine with at least €193 billion in direct financial, economic, and humanitarian aid.³¹ At the same time, a further €90 billion has been pledged, but has not yet been released due to a lack of unanimity in EU Council decisions, decisions which Hungary does not politically support.³²

Hungary has repeatedly used its veto power in EU decision-making bodies to block or delay collective financial commitments to Ukraine. This stance is directly related to an ongoing dispute over energy security and infrastructure. Hungarian authorities have raised concerns that the Druzhba pipeline, which supplies Hungary and Slovakia with Russian oil via Ukrainian territory, has been experiencing disruptions under unclear circumstances. Budapest has demanded guarantees for the uninterrupted operation and verifiability of the pipeline, including the possibility of external inspections. The Ukrainian authorities have not yet allowed such inspections, and the dispute remains unresolved.³³

Consequently, Hungary made its approval of further EU financial aid for Ukraine contingent on the restoration of secure and verifiable energy transit conditions. This condition resulted in a blockage of approximately €90 billion in additional EU aid. The political reaction within the EU has further exposed internal divisions. Several Western European actors have characterized Hungary’s position as an “act of disloyalty” to the Union and emphasized the expectation of unified support for Ukraine.³⁴

From a Hungarian (and Slovak) perspective, however, the matter is portrayed as a question of national energy security and the reliability of infrastructure, rather than a political deadlock. Here, too, the division within the EU becomes apparent: while Western European countries have more financial resources to diversify their energy sources, states like Slovakia and Hungary are dependent on Russian energy suppliers. A different price level is unsustainable for their industries and populations.

This episode highlights a structural fault line within the EU: While western member states prioritize strategic cohesion and a common external stance, parts of Eastern Europe place greater emphasis on immediate security and economic dependencies, particularly in the energy sector. Under the principle of unanimity, these diverging priorities allow a single member state to translate national concerns into EU-wide policy constraints.

3. Unified Foreign Policy: External Pressure and Institutional Fragmentation in the Iran Crisis 

A similar pattern is currently emerging in the fragmentation of foreign and security policy responses to the Iran crisis. At the beginning of 2026, EU member states initially adopted unified positions regarding the broader Iranian nuclear issue, but subsequently diverged in their responses to the outbreak of hostilities in February 2026.

Spain, in particular, went beyond mere political criticism and restricted the use of its territory, including airspace and military infrastructure, for U.S.-led operations in the context of the escalation with Iran. Italy also pursued a more restrictive operational line, limiting the use of certain military facilities for offensive operations, and France reportedly has closed its airspace to American arms deliveries to Israel. Germany signalled political distance at the highest level, with the Chancellor emphasizing that this was “not our war,” reflecting a general reluctance toward direct military escalation.³⁵

These measures reflect a broader Western European trend of combining diplomatic positioning with practical limitations on military escalation.

So far, no comparable publicly documented restrictions by Eastern European EU member states regarding the use of their territory for U.S.-led operations are known, even though the Eastern EU states also support Brussels’ official policy of de-escalation and adherence to international law. Nevertheless, the region’s governments maintain a political partnership with their transatlantic partners and generally act more passively, avoiding an open confrontation with the U.S. The Czech Republic, for example, explicitly articulated this position in the context of the war in Ukraine when Prime Minister Petr Fiala emphasized that “the Czech Republic stands with its allies.”³⁶

This divergence reflects broader structural differences. Eastern European states tend to maintain a security policy more closely aligned with NATO and the U.S., characterized, among other things, by their continued reliance on the United States as their primary external security guarantor. In Western Europe, by contrast, this reliance is less pronounced, allowing for a greater emphasis on strategic autonomy, legal frameworks, and de-escalation mechanisms.

The result is a differentiated political outcome: Western Europe combines political caution with operational limitations on military engagements, while Eastern Europe signals its loyalty to the alliance and its focus on deterrence. This episode illustrates a broader pattern of strategic incoherence within the EU under crisis pressure.

4. Closing Internal Weaknesses Through External Actors and Structural Levers

Internal asymmetries also create opportunities for external actors to exploit fragmentation. China has intensified its economic engagement in parts of Central and Eastern Europe through targeted investment activities and infrastructure-related cooperation formats, operating in regions characterized by lower capital availability and greater dependence on external investment inflows.

In Bulgaria, this structural situation has historically enabled sporadic external industrial cooperation, including, in some cases, announced or prepared Chinese investment projects aimed at gaining access to the EU single market via more cost-effective production sites. Although such initiatives have not always led to lasting industrial integration, they illustrate how unequal capital strength within the Union creates differentiated market entry points for external economic actors.³⁷

Chinese investors are also active in Romania, with renewable energy projects. A 342 MW solar park is currently under construction in Părău, being implemented by Shanghai Electric as the EPC contractor. The investment volume is approximately €275 million, with completion scheduled for 2026/27. The situation is even more drastic in accession candidate Serbia, where the national energy company NIS (Naftna industrija Srbije) has close ownership and control links with Gazprom, while China is the country’s largest foreign investor.³⁸

Conclusion: The EU’s Strategic Implications

Europe’s greatest weakness lies not in a lack of resources, but in a lack of institutional integration. With a GDP of around €18 trillion, the EU is one of the three largest economies in the world, the largest regulated single market with over 450 million consumers, and one of the regions with the highest purchasing power.³⁹ Trade between the EU and the United States reached around €867 billion in 2024, while trade between the EU and China exceeded €845 billion.⁴⁰ Europe controls important industrial and technological niches in mechanical engineering, automation, chemicals, specialty materials, and aerospace, and exports regulatory standards worldwide. From an aggregate economic and military perspective, Europe possesses significantly greater capabilities than Russia and is strategically indispensable to both the United States and China.

Nevertheless, the EU was not originally conceived as a classic geopolitical power. National prioritization is therefore potentially structurally embedded and not anomalous. However, developments to date point toward a gradual realignment of the Union’s strategic coherence. The coming years will determine whether this leads to fragmentation or a more clearly defined hierarchy of interests within the European framework.

The combination of unanimity rules, fragmented command structures, and the lack of enforceable exclusion mechanisms limits power projection and decision-making capacity. Consequently, the greatest threat to the Union stems not primarily from external rivals, but from internal fragmentation. The persistent economic and institutional divide between eastern and western member states is of central importance in this regard. This “East-West divide” risks undermining cohesion, creating vulnerabilities that could be exploited by external actors, and weakening the Union’s capacity for collective action in critical areas.

The political necessity is therefore twofold: the EU must build centralized and operationally integrated military structures capable of rapid strategic action, and it must develop mechanisms to prevent systematic gridlock so that internal disagreements do not paralyze decision-making.

To become a genuine strategic power, Europe must take three key steps. First, it should replace unanimity in foreign, security, and sanctions policy with qualified majority voting. Second, it must accelerate economic convergence between East and West to reduce structural inequalities. Third, it must strengthen institutional safeguards that protect collective action. This could—after compliance with legal procedures—include the possibility of expelling members who willfully obstruct agreed priorities.

Addressing these internal weaknesses is essential to transforming Europe’s considerable economic and military potential into a credible geopolitical power bloc. If this does not succeed, the alternative is further fragmentation and thus the loss of an opportunity to become a global political and economic factor.

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