In 2025, we observed, most of us shocked, as the world’s global order reshuffled and the EU experienced serious economic and military threats by other superpowers for the first time in over 80 years. Autocratic regimes and violence are the new norm; the “Western world” is now a concept that belongs to the past, and the European economy is struggling. Consequently, the EU changed its priorities, and those who fight for social justice, sustainable businesses and democracy find themselves in a difficult situation. If we cannot control what is happening in other parts of the world, the EU has power over how it adjusts and replies to this situation. And the compass it has chosen won’t bring it where it wants to go, but concrete and innovative solutions to make a positive change in Europe in 2026 do exist.
At the moment, different objectives are competing for a place at the top of EU priorities for policies and funding. Defence and competitiveness have won the game so far at the expense of everything else. In our view, this is not only short-sighted, but it is most of all answering the problems of today with the recipes that created the problem in the beginning.
The EU needs to be more competitive on a global scale while ensuring its industrial autonomy. Until now, the ongoing European Commission has decided to focus primarily on supporting an export-oriented economy, such as the EU automotive industry. The reasoning behind is that the automotive sector has a high economic turnover (about a trillion euros in 2021) and supports 3 million direct employment and 11 million indirectly. It is also a highly polluting industry prone to delocalisation. On the other hand, the EU is levelling down its support to economies with similar economic figures and high intangible added value. For instance, the social economy has a similar turnover and employs at least 11 million people directly and provides a track proven records of high intangible added value. These range from social cohesion to social innovation, locally rooted economy (that can internationalise but doesn’t delocalize), democratic practices, solidarity, to green transition.
Social economy is a key player to keeping affordable pricing in essential sectors like housing, energy, health, care, sustainable agri-food, sovereign European digital space, circular economy, all key sectors for striving and cohesive societies. As Enrico Letta (author of the 2024 EU report on the future of the Single Market, commissioned by the European Council) put it, the EU single market is more than a market, and must evolve to include more directly aspects of inclusion and cohesion. Therefore, for the EU economy to keep on being an economic global driver, we must certainly support our export economy, but that should go hand in hand with policies that support an economy that is at the service of people, that is locally rooted and sustainable for the planet. That balance should be the European economic compass, because the economy has a strong impact on the society and environment in which it develops.
Another key driver of the European economy should remain the green and digital transitions. The latter because it is a driver of innovation and productivity, but also because at the time being the EU is still quite dependent on China and the US for raw material, digital infrastructure and software. It would be a mistake to copy any other digital model, while it would be wise for the EU to continue to drive a digital space as it has started: one that is promoting sovereignty of individuals over the use of their data, one that further promotes the redistribution of wealth generated by data use towards those who generated them (instead of that wealth only benefiting intermediary platforms and brokers) and by truly enabling a digital world that is democratically designed for the common good. It is a matter of altogether public mental health, economic fairness and safeguarding a sound democracy.
The digital world has great impact not only on our societies, but also in terms of natural resources, and the EU digital space, just as any other economic development, should incorporate the environmental dimension. In fact, the green transition should continue to drive the EU economy, not only because the survival of our specie and many others (and the wellbeing of the planet) is in danger, but also because the green transition, well designed, is an economic drive in itself. Even China is betting on renewable energy, and one day Governments around the world will have to face the fact that they have no alternative but to develop environmentally sustainable economic practices, not only for their people, but also for their businesses. The EU better be ready before it is too late.
The other major challenge the EU is facing is defence. Now that the USA is no longer an ally, the EU needs to create deterrence to prevent attacks on its territory. This, of course, means investing in military expenses, but in the 21st century, EU defence also means investing against cyber-attacks and propaganda from autocratic forces. Because more than defending people’s integrity and frontiers, defence is about protecting values, and those of the EU are defined in Article 2 of the EU Treaty. They are based on principles of human dignity, freedom, democracy, equality, the rule of law and human rights. These values are all intertwined and are what make the EU unique compared to the rest of the world. Europe’s richness lies within the diversity of cultures and views; freedom of expression; on the solidarity it built between countries but also within them through social protection and redistribution of wealth; on strong democracies through separation of powers (legislative, executive and judiciary, and now even media) and strong institutions and civil society. Therefore, any euro put into military devices should be doubled by as much of the expense in social spending and civil society. Otherwise, these EU values will become a distant memory, and we may as well not spend money on military defence and give Russia or the US the keys to the Berlaymont.
As the President of the European Committee of the Regions, Kata Tütto, put it, “The number of challenges is increasing, and the money is shrinking”, so 2026 is a key year to voice how to tackle the manifold challenges of the EU in a way that allows defence, competitiveness, social justice and democracy altogether. The EU budget clearly isn’t extendable; therefore, the negotiations for the next EU Budget, the Multiannual Financial Framework 2028-2034, is one of the most important battles the EU will have to face this year and the following, as it will set the EU project for failure or victory. On the other hand, national budgets are more flexible, and given the strong increase in inequalities over the last decades, it would make sense to reduce them and request the bigger wallets to participate more in the efforts towards defence and democracy. Otherwise, austerity measures will affect the people most in need harder, while it will benefit the richest, the only ones who will be able to invest in defence.
Social Economy Europe has and will continue to fight for strong social and environmental investment, funding and policies. It will work more intensely in showing the world that a positive economy that works for people, the planet and democracy already exists and just needs to be supported as a guiding economic model. So, for the beginning of the year, we aim to reassure everybody that there are concrete and positive solutions; they simply need a level playing field and proper political support to thrive. In 2026, more than ever, SEE calls out to all like-minded actors, to all those who refuse the status quo and who want to live in a world of freedom, peace, solidarity and democracy, to join forces to build together the economy we want. This is what we wish for 2026.
