Global Risk Indexes (02-02-2025)

Global 98 (0 —)
MENA 96 ( —)
APAC 97 ( —)
Europe 99 ( —)
Africa 98 (+1 ▲)
AMERs 98 (+1 ▲)
Markets 99 ( —)
Markus Schmidt, Europe region analyst at Worldwise Analytica

Markus Schmidt

Analyzing Today, Anticipating Tomorrow

Europe at a Crossroads: Ukraine War Intensifies, Hybrid Warfare Expands, and Economic Instability Deepens

The Ukraine war has entered its most precarious phase, with Russian forces advancing in Donetsk and encircling Pokrovsk. Moscow's tactical success stems from sustained manpower advantages, aggressive missile barrages, and Ukraine's dwindling military resources. Western aid has slowed, leaving Kyiv vulnerable to battlefield fatigue. A failure to accelerate European military-industrial mobilization could lead to irreversible losses for Ukraine. The EU must shift from reactive military assistance to a full-scale wartime economic model, ramping up ammunition production, expanding logistical supply lines, and strengthening NATO's eastern posture to deter further Russian advances.

Hybrid warfare has escalated, with China and Russia refining cyber-influence strategies targeting European cohesion. Russian disinformation networks are actively undermining public support for Ukraine, while China's coordinated cyber operations in Spain signal a broader strategy of exploiting economic and political fault lines within the EU. These threats go beyond mere propaganda; they are shaping electoral outcomes and policymaking processes. The EU's response must include expanded counter-disinformation legislation, enhanced intelligence-sharing with NATO, and aggressive regulatory measures to curb foreign influence operations.

Economic instability threatens the Eurozone's long-term resilience, as Germany, France, and Italy struggle with industrial decline, weak consumer confidence, and geopolitical trade disruptions. The European Central Bank's rate cuts reflect desperation to stimulate growth, but structural deficiencies persist. U.S. trade policies under Trump, combined with BRICS' efforts to de-dollarize global markets, are shifting economic power away from Europe. To counter this trend, the EU must diversify trade partnerships, invest in high-tech industries, and accelerate the green energy transition to mitigate dependence on volatile global markets.

Political polarization is deepening across key EU states, with France, Germany, and Norway facing internal fractures that threaten continental stability. In France, Marine Le Pen's National Rally continues its ascent, exploiting judicial battles and economic grievances to weaken centrist dominance. Germany's CDU-AfD collaborations on migration policy are eroding democratic norms, while Norway's government collapse over EU energy directives highlights rising Euroscepticism even in traditionally pro-EU nations. Without a renewed commitment to democratic governance and unity, the EU risks fragmentation at a time of unprecedented external threats.

Energy security remains a major vulnerability, as Ukraine's gas infrastructure comes under relentless Russian attack, pushing the country toward a potential energy collapse. Moldova's continued dependence on Russian gas further exposes the fragility of Europe's energy diversification strategy. While emergency measures provide short-term relief, the EU must accelerate the development of alternative energy networks, scale up nuclear investments, and expand cross-border energy-sharing agreements to shield itself from geopolitical energy coercion.

The Arctic is emerging as a new battleground, with European strategic inaction allowing Russia and the U.S. to dominate the region. Denmark's $2 billion military investment in Greenland highlights the growing recognition of the Arctic's importance, yet the EU lacks a unified Arctic defense and economic strategy. Europe cannot afford to remain a passive observer in a region crucial for global trade routes, resource extraction, and military logistics.

Geopolitical instability in Africa is reshaping European foreign policy challenges, as Russian and Chinese influence expands in the Sahel and Central Africa. France's declining influence in former colonies is creating power vacuums that Moscow and Beijing are exploiting through military and financial interventions. Europe must recalibrate its engagement with Africa, shifting from a reactive, crisis-driven approach to a long-term strategic framework that prioritizes security cooperation, infrastructure investment, and trade partnerships.

Europe is at an inflection point. The compounding crises in Ukraine, energy, economic resilience, and internal political stability demand a decisive strategic shift. If Europe fails to adapt, it risks losing geopolitical influence and becoming a passive actor in global affairs.

Geopolitical Risk Assessment for the Europe
(02-02-2025)

Europe stands at a decisive moment as the convergence of military, economic, and political crises threatens long-term stability. The Ukraine war is reaching a critical phase, energy security remains fragile, economic stagnation deepens, and hybrid warfare tactics are escalating. Without a coordinated, strategic shift in defense, economic resilience, and internal governance, Europe risks being overwhelmed by external pressures and internal divisions.

Geopolitical Risk Index

Developments to Follow for the Europe (See All Global)

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