How to understand Europe’s next 12 months in a long-term context? Coming after the initial jolt of the second Trump presidency in 2025 but before the spate of significant elections due in 2027 (including in France, Italy, Poland and Spain), at its outset 2026 resembles an “in-between” year. Russia’s war in Ukraine is the topic with the most obvious potential to generate an historical turning point—benign or otherwise—in the form of a peace deal, but even there a continuation of the conflict seems most probable.
There is, however, a plausible case for 2026 as a momentous hinge year. For many of the day-to-day considerations of European affairs, even including the fate of Ukraine, are downstream of three wider developments. The first is the rise of the radical right, and the broader political fragmentation of which it is the most prominent manifestation. The second is the open question of whether Europe can marshal greater, and more joined-up, common investments. And the third is its ability to find a sustainable, sovereign place in a multipolar world. On all three of these overarching developments, the coming 12 months look highly significant.
The roadmap for the European radical right in 2026
Start with the first. Over the past decade especially, the politics of the radical right has gravitated from protest to power, either in the form of winning office or heavily influencing those who hold it. In most European countries it either stands a good chance of winning the next national election, or represents a sufficiently large force to determine the make-up of the next government. But as it waits in the anteroom of political primacy, the radical right is having to think hard about things it once brushed aside: public administration, international commitments, and the limits imposed by constitutions and markets.
Events over 2026 will reveal much about that process.
“The politics of the radical right has gravitated from protest to power, either in the form of winning office or heavily influencing those who hold it”February will likely bring the conclusion of Marine Le Pen’s appeal against her embezzlement conviction, which will decide whether she or her protégé Jordan Bardella will run in 2027 as the Rassemblement National (RN) presidential candidate. Over the rest of the year the party will hone its electoral platform, and expose its policies to hitherto unprecedented scrutiny. How an RN president would handle France’s debt, use France’s agenda-setting power in the EU, respond to provocations from Washington or Moscow—all are matters where Le Pen’s dédiabolisation (detoxification) of the party has long benefited from ambiguities that it will find ever-harder to sustain as 2026 progresses.
April will demonstrate something different about Europe’s radical right: its ability, given time and access to the levers of power, to render elections uncompetitive or even superfluous. Le Pen’s Hungarian ally Viktor Orbán faces a tough electoral challenge from opposition leader Péter Magyar. Over his 16 years since returning to power, Hungary’s prime minister has hollowed out independent institutions and dismantled other democratic constraints. Is it still possible to defeat him at the polls? And if so, would he relinquish power?
Then September will bring the second round of the year’s state elections in Germany. The first, in March, will likely see the Alternative für Deutschland (AfD) make gains in two south-western states, complicating coalition arithmetic there among mainstream parties committed to the Brandmauer (firewall) that rules out cooperation with the party. But most significant will be votes in the poorer eastern states of Sachsen-Anhalt and Mecklenburg-Vorpommern after the summer. There the AfD is within striking distance of winning majorities, circumventing the firewall entirely, and forming its first state government. That outcome would be both a political caesura in the history of the federal republic, and a test of the AfD’s ability to deal with the realities of governing.
“The coming year could also see the Trump administration’s rhetorical support for the European radical right escalate into active interference”Of course, these are just three radical-right stories in 2026 among many. Others include Giorgia Meloni’s growing political vulnerability within Italy and growing confidence on the European stage; the intersection of the conventional right and the radical right in countries like the Netherlands, Spain and Sweden (as well as the European Parliament); and local elections in the UK that may well see Nigel Farage’s Reform expand its presence in English municipal government. Meanwhile the coming year could also see the Trump administration’s rhetorical support for the European radical right escalate into active interference, whose possible forms I discussed in my last column for Agenda Pública.
How all this will play out is unclear. But its significance to the future governance of Europe is beyond doubt.
Turning point in Europe’s economic agenda
That also applies to the money question. If 2025 was something of an annus horribilis for Europe—marked by anaemic growth, political deadlocks and a sense of passivity in the face of wider geopolitical forces—the single best explanation for that is the continent’s long-term failure to invest more, and in more coordinated ways. Mario Draghi’s report on competitiveness for the European Commission in 2024 put the EU’s investment shortfall at €750-€800 billion per year. The Trump shock of 2025 lent a new geopolitical urgency to the need for a joined-up effort to close that gap; a fragmented Europe’s bonsai militaries, bonsai companies, bonsai budgets and bonsai markets conspicuously adding up to much less than the sum of their parts and leaving the continent vulnerable.
If Europe fails to mount that effort in 2026, it is hard to believe that it ever will. Initial disbursement of the EU’s debt-backed loan to Ukraine, agreed among 24 of the 27 member states at the European Council in December, will start in the spring. Over the course of the year Germany’s ten-year, €1tn fiscal expansion, the result of the reform to the country’s debt brake in March 2025, will gain pace. (Given the significant defence component of this German spending, it also deserves to be seen as the flagship effort of the Europe-wide wave of military spending increases proceeding over the coming 12 months.) As 2026 unfolds, negotiations over the EU’s 2028-2034 budget will intensify, with coalitions over its size and shape emerging ahead of the expected deal in 2027. Then at the end of the year, by 31st December 2026, the Commission will make the last payments of the NextGenerationEU stimulus scheme launched during the Covid-19 pandemic.
Admittedly, these are four very different fiscal instruments, at different stages in their lifecycles, decided upon by different authorities. But it is reasonable to expect that, together, over the course of the year they will determine the contours of Europe’s fiscal future.
“Germany’s spending splurge and the wider increases to military budgets will be a test case of the growth-boosting power of such investments”The Ukraine loan opens the door to future common borrowing without EU unanimity. Germany’s spending splurge and the wider increases to military budgets will be a test case of both the growth-boosting power of such investments and Europeans’ ability to deploy them effectively. (In other words: do they really increase productivity and capabilities, or are they wasted on pork-barrel causes without strategic European value?) Meanwhile the EU budget talks will pit petty disputes over subsidies against a more visionary conversation about how to build the Europe of the mid-2030s. And the end of NextGenerationEU will foment discussion, related to all three other points, about whether this emergency measure deserves to be a one-off or a springboard to the more systematic fiscal integration the union needs.
The next year will not resolve every question, but it may well decide whether or not Europe ultimately enters the final years of the 2020s more or less confident about borrowing, doing business and investing together; whether it will stand together as one strong tree or continue as a wind-buffeted copse of bonsais.
These two defining internal topics—the trajectory of a fragmenting politics and the fate of fragmented fiscal policies—will both intersect at multiple points with wider geopolitical events. A clarifying moment could come at the US-China summit in April, which (notwithstanding the volatility of Trump’s foreign policies) could conceivably raise the curtain on a “G2+1” world in which Washington and Beijing, with Moscow as a junior partner, seek to carve up the globe into spheres of influence. Under pressure from both over trade, technology, and security, European governments ought to find in such a moment an urgent impetus to make common cause with other middle powers squeezed between the two giants.
Fortunately, 2026 will also bring plenty of opportunities for them to do so, as a tour of the global map shows
Opportunities and challenges in a multipolar global arena
To the far east, Japan will this year join Horizon Europe, the EU’s research and innovation programme. To the south-east, the EU aims to conclude trade deals with Malaysia, the Philippines and Thailand. Moving clockwise around the map, 2026 will be a major year for EU-India relations, starting with the summit between the two in New Delhi on January 27th at which leaders hope to sign a comprehensive free-trade agreement and discuss, among other things, the mooted India-Middle East-Europe economic corridor (IMEC). There and elsewhere, EU leaders will need to address accusations of protectionism over its newly implemented Carbon Border Adjustment Mechanism, casting the CBAM instead as a framework for cooperation on green industrialisation. “African states seeking to avoid dependence on any one external power will heed whether the EU can step out of the US’s shadow and work pro-actively with other partners”To Europe’s immediate south-east and south, the first action plan of the new Pact for the Mediterranean is due early this year, and should flesh out the pact’s bid to reinvigorate European relations with North Africa and the Levant. That and the NATO summit in Ankara in July will also offer openings to deepen security cooperation with Turkey. Beyond the Sahara, African states seeking to avoid dependence on any one external power will heed whether the EU can step out of the US’s shadow and work pro-actively with other partners; for example, on projects like the renovation of the Lobito Corridor rail link between Angolan ports and mineral deposits in the Democratic Republic of Congo.
Across the Atlantic, it is not (yet) too late for EU member states opposed to the trade deal with Mercosur to rally round and approve this step whose immediate economic benefits would be secondary to the geopolitical significance of deepening ties with likeminded partners like Brazil. Finally, due west, 2026 will see the implementation of the EU-Canada Security and Defence Partnership—including Canada’s participation in the Security Action for Europe (SAFE) defence funding instrument.
Circling the map, then, 2026 will bring opportunities for Europe to deepen its cooperation with partners in the global “middle space” between the US and China. The disparate examples mentioned above are all, to at least some extent, about hedging against one or both of the superpowers.
Yet disparate they remain; a hodgepodge of one-off initiatives, mini-lateral groupings, and case-by-case coalitions of the willing. These are of course better than nothing, but in a world where the US and China both seek to bind their trade, energy, technology, investment and security interests into package deals offered to (or imposed on) partners, they are insufficient. It is probably not realistic to hope for a consolidated “third pole” led by the EU, Brazil, India and the like. But the prospects of those powers retaining a reasonable degree of sovereignty and autonomy into the mid-21st century may well depend on their ability to knit together that middle space into, at least, a denser network of middle-power cooperation.
“The coming 12 months could bring defining developments on all three fronts marks out 2026 as much more than an «in-between» time”The future of European politics, of the continent’s ability to invest in a shared future, of its relevance in a multipolar order—that the coming 12 months could bring defining developments on all three fronts marks out 2026 as much more than an “in-between” time. Rather, it stands to be a hinge year, a year of transition, perhaps even a year that comes to be seen as the boundary between the early-21st century and mid-21st century Europe.
For the continent’s political mainstream, the stakes are particularly high. As the radical right hones its recipes for government and moves closer to power in more places—with a real possibility of being the leading political force by the end of the decade—the onus on others to supply a more compelling rival offer becomes greater. That rival offer must necessarily grapple with the other two topics raised here: Europe’s fiscal and geopolitical strategies. In that respect, too, these three themes for the year ahead are deeply interconnected.