What turned 2025 into a year of better averages and bigger challenges?

2025 leaves me with mixed feelings. It was an annus horribilis for climate, trade and international cooperation, and a difficult year for Europe. The main victim of Trump’s tariff war has so far been the US itself, and Europe’s raw economic data – growth and inflation look better than in 2024. But our challenges have clearly grown further.

Bruegel, meanwhile, is thriving: we celebrated our 20^th birthday with a record number of publications and events, including 14 anniversary events in European capitals (six more are planned in early 2026). We tried to push the envelope on European policy challenges on many fronts: 

• responding to geopolitical shifts;
• transforming the governance and funding of European rearmament;
• integrating Ukraine into Europe’s military-industrial sector;
• improving sustainable finance regulation;
• breaking the deadlock on Capital Markets Union;
• using data as a production factor;
• designing a more effective EU budget;
• reconciling EUs clean industrialisation with that in the Global South;
• rethinking global trade governance; and
• creating a 28^th – or as we prefer to call it, 0^th – regime for startups – to name just a few. 

A special highlight was our second joint Paris Report with CEPR, describing how Europe can build international coalitions of the willing for climate action and nature restoration.

However, living up to our mandate of improving economic policy is increasingly hard. We used to see ourselves as the think tank that challenged conventional wisdom and promoted better forms of European governance. We still do. But we now find ourselves having to defend some of that wisdom – competition, rules-based trade and a cost-benefit approach to regulation – against an onslaught of poorly designed intervention, regulatory quick fixes, economic nationalism and policies benefiting special interests.

I want to thank all of you, our readers, and wish you a merry Christmas or happy holidays, and the best possible 2026.

Explore additional highlights for this year on Bruegel’s 2025 wrapped page.

The Why Axis is a weekly newsletter distributed by Bruegel, bringing you the latest research on European economic policy. 

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