THE STATE OF THE EUROPEAN UNION REPORT. Europe in a period of transition

9 Introduction. The challenges of post-pandemic Europe It is clear that the 21st century is putting the European project to a severe test. Multi- ple crises (economic, migratory, democratic) and the United Kingdom’s exit process have shaken the EU to its foundations. In addition, the COVID-19 pandemic has unleashed both a health and an economic crisis. The social impact of a crisis of this scale is beyond question. Inequality has grown and the welfare state, already severely weakened by the neoliberalism of recent decades, has been further undermined in Europe and North America, although the damage has not been fatal thanks to the strength of our democratic structures. In addition, two further developments have had a major impact: China’s rapid transformation into a technological superpower, and the appearance in the west of ultranationalist, protectionist and reactionary forces that are truly worrying. This has found expression in Trumpism, which continues to be influential in the USA, both in the media and more widely, and in the European far right, which has deliberately sought to provoke the EU, particularly in Poland and Hungary. We do not yet know if this situation is merely transitional and will have a positive conclusion or if it will become worse as time goes on. What we do know is that the outcome will be strongly influenced by the EU’s response to the unexpected challenges we are facing in the 21st century. In addition to the political challenges noted above, we should add the huge threat of climate change, and the digital divide both between social groups within society and between different countries. This report on the state of the European Union, compiled each year by the Fundación Alternativas and the Friedrich-Ebert-Stiftung, focuses precisely on the challenges posed by this period of transition. In it, we analyse the situation in 2021 and the prospects for 2022, and we identify recommendations and political proposals regarding what we believe the EU should do, from a progressive perspective. The EU must respond to a very difficult set of circumstances. These can be summed up as the choice between capitulating to a wave of anti-European nationalism and individualism or taking a decisive leap towards a more integrated Europe that defends its essential values of democracy, the Rule of Law and freedom. These values, as stated in article 2 of the Treaty of the European Union, are based on a set of principles, one of which we wish to highlight as being particularly necessary just now: solidarity.This is a value that encapsulates the very meaning of a supranational