Future of Europe: Balancing Progress with Oversight (2035)

In the ever-evolving landscape of global politics and economics, Europe finds itself at a crossroads, with the principle of subsidiarity emerging as a key factor in shaping its future. This principle, enshrined in the Treaty on European Union (Maastricht Treaty), asserts that decisions should be made as close as possible to the citizens they affect.

Three regions stand out as exemplars of regional innovation centres: Germany, Taiwan, and various European regions connected through initiatives like the EU Capital Markets Union. Germany, with its industrial density and technology transfer hubs like the Ruhrgebiet, and cities like Berlin, Munich, and Karlsruhe, known for their strong startup ecosystems and research rankings, are leading the charge. Dresden and Leipzig, on the other hand, form a centre for deep-tech startups and regional development. Taiwan, noted for its semiconductor industry partnerships, completes the trio.

In an entrepreneurial confederation scenario, Europe could embrace subsidiarity and decentralization as drivers of innovation, becoming a platform for bottom-up innovation. However, a more likely scenario sees Europe following a cautious reform path, making improvements but remaining inclined towards centralization and harmonization.

When subsidiarity is respected, Europe can function as a laboratory of policy pluralism, allowing countries or regions to test novel approaches to taxation, labor law, startup regulation, or digital services. This would involve enabling member states, regions, and cities to design and implement policies that reflect their specific comparative advantages, administrative capabilities, and cultural conditions.

A Europe that is responsive and decentralized is more resilient, both politically and economically, than one that seeks to manage complexity from the centre. Subsidiarity and institutional competition provide Europe with a unique edge over centralized systems like China. Furthermore, subsidiarity reinforces legitimacy as policies crafted closer to citizens are more likely to reflect local preferences, respond to feedback, and command public trust.

However, the EU has pursued increasingly harmonized policies in areas such as taxation, digital regulation, and industrial policy, limiting the possibilities for individual regions to carve out a competitive advantage. In a technocratic fortress scenario, the EU could centralize further, curtailing national flexibility in favour of uniformity and control, and falling further behind in global innovation and competitiveness.

As Europe navigates its future, the principle of subsidiarity offers a path towards resilience, innovation, and legitimacy. By empowering its regions and member states, Europe can foster a dynamic and competitive ecosystem that responds to the needs of its citizens and the global market.