Dear Readers,
When a Shahed-type drone struck a British airbase in Cyprus last week, the US-Israeli war on Iran reached Europe. While capitals remain divided over the political and legal implications, the escalating conflict is affecting European security and economic interests. Across the Middle East and the Eastern Mediterranean, European states are helping to defend partners, infrastructure and shipping routes while evacuating their citizens stranded in the region.
The crisis exposes structural weaknesses of European foreign policy: a lack of strategic unity, limited military instruments and a widening gap between Europe’s normative ambitions and geopolitical realities. In the immediate conflict, Europe’s room for influence is limited. Its most important contribution may come later, through diplomatic engagement and efforts to rebuild a more inclusive regional security framework.
Yet the escalation also raises the broader question of how Europe can remain relevant in a fragmented international system where rules are increasingly contested. In a contribution to the latest issue of Internationale Politik, I argue that Europe’s influence in such a world will depend on strengthening its economic, technological and security capabilities while building effective partnerships.
The Iran war is another test to Europe’s economic resilience. With the Persian Gulf effectively closed and disruptions affecting global LNG supply, European gas prices have surged to their highest level since 2023, adding to an already urgent debate about Europe’s high energy costs.
Addressing the broader competitiveness challenge has been high on the EU agenda since the start of the current legislative term. Last week, the Commission presented its long-awaited proposal for the Industrial Accelerator Act, aimed at strengthening Europe’s industrial base in an increasingly contested global economy. The proposal links public procurement in strategic sectors to value added in the EU and trusted partner countries.
As my colleague Etienne Höra notes, while this approach is intended to limit competition, particularly from Chinese firms, China’s expanding manufacturing footprint abroad could complicate this objective.
Looking ahead, next week’s European Council will take place against an exceptionally demanding agenda. Leaders will not only address the fallout of the Iran war and the pressures on energy markets, but also continue discussions on support for Ukraine’s defence, reconstruction and EU accession path. We will follow these debates closely and share our analysis in our next newsletter edition.
Finally, we are delighted to welcome Florian Kommer to our Europe Program as Senior Expert for European Strategic Issues. Florian previously worked at the German Federal Foreign Office, serving as deputy chief of staff to the former Minister of State for Europe Anna Lührmann. We are very happy to have him on board!
Best wishes,
Daniela Schwarzer
Member of the Executive Board
