A strong “partner Europe” must be both economically competitive and socially just. In a world shaped by systemic rivalries, economic strength alone is not enough. Only if the EU combines prosperity with fairness can it enhance its capability to act on the global stage. Only through inclusive partnerships can the EU build credibility and resilience.
Europe’s promise of shared prosperity rests on the balance between economic competitiveness and social welfare – a balance coming increasingly under pressure. Rising protectionism and systemic rivalries are reshaping the international economic order and exposing the vulnerabilities of the European economy. In response, the EU is revamping its geoeconomic strategy to safeguard its competitiveness and capacity to act. Yet, a purely economic view of competitiveness will not ensure Europe’s long-term prosperity. It risks deepening inequalities, eroding trust in institutions and feeding populist agendas. Political and economic stability depend just as much on a resilient social fabric at home as on inclusive partnerships abroad that extend fair opportunities to all citizens, regions and partners.
Resilience matters for competitiveness
Competitiveness extends beyond the performance of individual firms. When viewed through the lens of geoeconomics, competitiveness – defined by the World Economic Forum (Schwab, 2019) as “the set of institutions, policies and factors that determine the level of productivity of a country” – is made up of both economic and national security components. Economic integration and global supply chains create dependencies that can become vulnerabilities, and thus the origins and producers of goods and knowledge become as important as the economic gains enabled by trade. In a geoeconomic sense, a nation’s competitiveness is inherently tied to its level of resilience, defined by the EU as “the ability not only to withstand and cope with challenges but also to undergo transitions in a sustainable, fair and democratic manner” (European Commission, 2020). Europe’s resilience – bolstered by strong social and ecological standards – is what enables it to navigate fast-paced changes in the global trade system and protect its economy from external shocks. Thus, resilience and the social justice it implies is a fundamental precondition for competitiveness and lasting strength.
Social justice as a collective responsibility
Social justice is a collective good and, at its core, it is about ensuring that the benefits and burdens of economic life are fairly distributed in ways broadly accepted across society. Liberal theorist John Rawls argued that just structures guarantee basic freedoms and allow inequalities only insofar as they provide a collective benefit (Rawls, 1971). In an extension of Rawls’s theory, Becker and Hauser highlight four key dimensions of social justice: equal opportunity, fair rewards for contributions, needs-based equity and intergenerational justice (Becker & Hauser, 2009). According to them, when supplemented with the cross-cutting requirements of gender equality and the inclusion of marginalised groups and less-developed regions, these dimensions constitute a comprehensive vision of justice. This vision, however, can only be achieved through collective action and, in the case of Europe, it depends on EU political institutions to set and enforce rules that both make social justice possible and uphold the EU’s competitiveness.
Mutual reinforcement of competitiveness and justice
Economic growth and competitiveness, on the one hand, and social welfare and justice, on the other, are closely intertwined in today’s interdependent world. Social justice cannot be achieved without economic strength: a resilient economy is necessary to finance social infrastructure and preserve political autonomy. The EU Single Market, for example, is a core economic asset that underpins both the European welfare state model as well as Europe’s independence from external powers and pressures.
At the same time, social justice is an essential component of long-term competitiveness. A workforce protected by social security and fair labour laws, as well as supported through professional development opportunities is more likely to remain productive over time. This is especially the case during periods of structural change, such as industrial relocation or digital transformation, which often generate short-term disruptions. Without an effective social safety net, these shifts can lead to labour market gaps, skill shortages and long-term obstacles to economic growth and productivity. In other words, economic competitiveness and social justice exist in a reciprocal relationship: each reinforces and sustains the other, and they form the backbone of a resilient European economic model. Evidence from the EU-Canada Comprehensive Economic and Trade Agreement shows that positive social outcomes coincide with economic growth, even amid geoeconomic competition (Trade Impact BV, IEEP & CE, 2025). Thus, it is in Europe’s long-term strategic interest to embed social justice into its economic policies to both strengthen economic growth and enhance Europe’s credibility as a principled global actor.
Competitiveness alone won’t carry Europe
Only if Europe retains its economic weight can it defend its interests in a shifting global order and act as a values-based power distinct from both the US and China. Yet credibility cannot be bought with GDP alone. Economic weight may secure a seat at the table, but it does not guarantee influence. Markets may open doors, but values keep them open. Values, at home, are also the glue of open and inclusive societies. If the EU wants to credibly promote high standards for labour rights, environmental protection or digital ethics abroad, it must adhere to them domestically as well. Double standards undermine Europe’s normative power, weaken its negotiating position and risk internal fragmentation. The “Brussels effect”, once synonymous with the EU’s regulatory leadership, risks dilution if it is not backed up by unified action and policy coherence. The EU’s new Economic Security Strategy reflects this reality: its three pillars – promoting competitiveness, protecting against unfair or coercive practices and partnering with like-minded states – directly link market strength to political agency. However, it must complement its focus on competitiveness with a renewed commitment to social justice, only then will Europe be able to retain its capacity to act.
Building inclusive partnerships for a stronger Europe
Europe’s position in the global order also depends on the alliances it forges. Many middle powers and countries of the Global South face similar dilemmas – adapting to economic transformation, maintaining social cohesion and achieving strategic autonomy – making them natural partners for the EU, especially when it comes to the larger goal of reshaping and preserving a rules-based order. The EU must chart a pragmatic yet principled course, building values-based partnerships while joining coalitions shaped by economic and security interests. Europe’s credibility, both with international partners and between EU member states, requires more than declarations. It must enforce labour standards, assess the social impacts of trade agreements and use economic interdependencies to promote fair outcomes. And to increase its legitimacy at home and abroad, the EU must honour its commitments and include a diversity of voices in the policymaking process. Ultimately, Europe’s prosperity and resilience depend on both economic competitiveness and social justice. To pursue them through equitable partnerships is not only a moral imperative but a strategic necessity. If other countries are to co-develop and take ownership of the evolving global economic order, the EU must build inclusive coalitions—not just of the willing, but of the affected.
“In other words, economic competitiveness and social justice exist in a reciprocal relationship: each reinforces and sustains the other, and they form the backbone of a resilient European economic model.”
- Lea Holst is a research assistant in the programme unit Global Markets and Social Justice at the BKHS.
- Elisabeth Winter is deputy managing director and programme director for Global Markets and Social Justice at the BKHS.
References
- Becker, I. and Hauser, R. (2009) Soziale Gerechtigkeit – ein magisches Viereck – Zieldimensionen, Politikanalysen und empirische Befunde. Berlin: Forschung aus der Hans-Böckler-Stiftung.
- European Commission (2020) Strategic Foresight Report 2020: Charting the Course Towards a More Resilient Europe.
- Rawls, J. (1971) A Theory of Justice: Original Edition. Cambridge, MA: Harvard University Press, Belknap Press.
- Schwab, K. (2019): Global Competitiveness Report 2019. Geneva, Switzerland: World Economic Forum.
- Trade Impact BV, Institute for European Environmental Policy (IEEP) & Cambridge Econometrics (CE) (2025) Study in support of an ex-post evaluation of the EU-Canada CETA Agreement - Executive Summary. Luxembourg: Publications Office of the European Union.
