The brain drain from Europe is real and worsening. Net inflows of tech talent into Europe plummeted from 52,000 in 2022 to 26,000 in 2024 – a 50 percent decline. Europe is training highly skilled workers but is systematically losing them to the US, Canada, and increasingly to Asian markets.
The situation is particularly acute in the field of AI. A mapping of global AI professionals revealed that Europe has roughly 30 percent more AI talent per capita than the US. However, this apparent strength is deceptive, as Europe is unable to retain this talent. Germany and France are experiencing net losses of AI specialists, primarily to the US and the UK. Even AI hubs like Berlin and Munich are losing experienced professionals to the US, the UK, and Switzerland, despite attracting significant influxes of AI specialists.
The costs of this brain drain are enormous. Europe’s AI workforce is highly educated and internationalized – on average, 57 percent of AI professionals in Europe completed their bachelor’s degree outside Europe, compared to 38 percent in the US. Europe is therefore not only investing in the education of its own citizens, who then emigrate, but also attracting international talent who leave Europe again after a few years. The public sector finances this education with tax revenue, but the returns flow elsewhere.
The push factors are clear: high taxes, cumbersome regulation, bureaucratic inertia, rigid academic hierarchies, and limited funding opportunities. The pull factors for the US are equally clear: world-leading universities, dynamic labor markets, strong entrepreneurial ecosystems with abundant venture capital, greater academic freedom, and higher salaries.
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Is there a democratic legitimacy deficit in the EU?
The question of the EU’s democratic legitimacy is complex and has been the subject of controversial debate for decades. Empirical evidence reveals a structural legitimacy problem that cannot be resolved solely through formal procedures. This so-called “democratic deficit” manifests itself in several dimensions.
First, the EU suffers from a transparency problem. Decision-making processes, particularly in the Council, take place behind closed doors. According to Novak, consensus in the Council often consists merely of the absence of explicit dissent, not of actual agreement. This lack of transparency reinforces the impression of an “impenetrable” technocratic elite, detached from the population.
Secondly, there is an accountability deficit. Studies on the accountability of EU agencies show that many control mechanisms are ineffective. Management boards, which are supposed to act as supervisory bodies, are in many cases “not the watchdogs they are formally meant to be.” Many delegates appear ill-prepared for meetings, do not participate actively, and seem to have no interest in the agency’s overall performance. The European Parliament, in turn, raises questions on issues outside the agencies’ mandates or on points already addressed in available reports.
Third, the vertical transfer of powers to supranational institutions weakens national accountability systems without the creation of equivalent mechanisms at EU level. The horizontal shift of power from representative democratic institutions to an autonomous and non-representative judiciary further exacerbates this problem.
The trust of European citizens in the EU has not recovered as hoped after past crises. The population increasingly perceives the EU as a “monolithic bureaucratic bloc” that stifles the social, economic, and democratic needs and voices of its citizens. This perception is not unfounded when complex legislative processes are virtually impossible for non-experts to understand, and voter interest consequently declines.
Can soft power compensate for economic weakness?
The idea that Europe can compensate for its dwindling economic influence through normative strength and soft power is attractive, but deceptive. Soft power—the ability to influence through attraction rather than coercion—presupposes credibility and stability. But credibility ultimately rests on the ability to assert interests and overcome challenges.
The reality of international politics is sobering: influence does not arise from moral superiority, but from the ability to offer alternatives that are attractive or indispensable to others. Economic strength is not a secondary consideration, but a prerequisite for influence. Those who restrict freedom, competition, and the rule of law lose precisely what once made the EU strong.
Europe’s geopolitical irrelevance is becoming increasingly apparent. While the US and China pursue aggressive industrial and military strategies to secure their global influence, Europe remains paralyzed by political disunity and slow decision-making. The EU lacks a coherent foreign economic policy, and its diplomatic efforts suffer from the absence of a unified voice, as individual member states prioritize national interests over collective strategies.
The fragmented structure of the EU separates economic instruments from geopolitical interests, thereby jeopardizing its economic sovereignty. China has already used its economic influence in Europe to pressure EU members to block or weaken resolutions on international arbitration over the South China Sea and on human rights. When economic dependencies dictate foreign policy positions, sovereignty becomes a fiction.
Soft power without an economic and, where applicable, military foundation is ineffective. Only relative security policy strength enables Europe to protect its political and economic interests, as well as its values, internationally. Only on the basis of this strength can Europe contribute to a stable order from which it benefits economically and within which it can fully develop its soft power.
Is the EU still reformable?
The central question is not whether the EU has problems – that is obvious – but whether these problems can be solved within the existing system or whether they are inherent to the system. An analysis of previous reform attempts raises doubts.
The Draghi report of September 2024 precisely diagnoses the problems and calls for fundamental changes: massive investments in innovation, a European industrial policy, the completion of the Capital Markets Union, deregulation, and a strengthening of the European defense industry. The European Commission responded to the Draghi report in January 2025 with the “Competitiveness Compass.” However, this compass falls short of Draghi’s proposals and once again promises “unprecedented simplification efforts”—a promise that has been repeated for over two decades and never fulfilled.
The structural problem runs deeper: as long as 27 member states must decide unanimously on fundamental issues, as long as particular national interests dominate collective European interests, and as long as the EU lacks its own substantial budget and relies on contributions from member states, fundamental reforms remain unlikely. The omnibus proposals for regulatory simplification are criticized by environmental organizations, which fear that under the guise of simplification, protection standards will be weakened. The business sector welcomes them but considers them insufficient.
A genuine paradigm shift would require: first, the enforcement of the principle of subsidiarity – the EU should only regulate what it can demonstrably do better than the member states; second, a radical simplification of the legal body with the aim of halving existing regulations instead of adding new ones; third, genuine harmonization instead of 27 national gold-plating implementations; fourth, a shift from input to output regulation, setting targets instead of dictating processes; fifth, a capital markets union that mobilizes European venture capital; sixth, joint financing of infrastructure and strategic industries.
But political economy argues against such reforms. Every existing regulation has beneficiaries—consulting firms, certifiers, inspectors, bureaucracies—who have a vested interest in maintaining it. National governments readily use EU regulation as a scapegoat for unpopular measures, while taking credit for successes themselves. The Commission has an institutional interest in expanding its powers.
What is at stake?
The question is not abstract, but existential. Europe faces a choice between a painful but necessary reform or further relative decline. Demographic trends exacerbate the situation: Europe’s population is aging faster than that of the US or China, which further burdens productivity growth.
If Europe fails to strengthen its innovative capacity, retain capital and talent, reduce bureaucracy, and create a truly single market, its global influence will continue to decline. Economic irrelevance leads to geopolitical irrelevance. An economically weak Europe can no longer effectively represent its values and interests. It becomes a pawn in the game between more powerful actors.
The irony is bitter: A union founded to secure peace and prosperity through the rule of law, competition, and economic strength is threatened with collapse due to excessive regulation, fragmented markets, and a lack of competitiveness. This would be nothing less than the opposite of what this union was originally founded for.
The coming years will show whether Europe has the courage to undertake fundamental reforms or whether its relative decline continues unabated. The figures speak for themselves. The question is whether political decision-makers are prepared to listen and act accordingly. The time for cosmetic corrections is over. What is needed now is a fundamental change of course – or acceptance of a future in which Europe plays an increasingly insignificant role.