The EU continues to hold its position as the economic leader in its neighborhood, although competitors are beginning to close the gap.

On Thursday, September 25, 2025, the Bertelsmann Stiftung, in cooperation with the Vienna Institute for International Economic Studies (wiiw) and the European Centre for International Political Economy (ECIPE), released the new Geoeconomic Interconnectivity Index (GEOII). The index measures the level of interconnectivity in the areas of trade, finance, and economic policy between the European Union (EU) and its neighbouring countries. It aims to provide insight into how the EU can strategically leverage its economic relations to remain competitive against major global powers such as China, Russia, and the United States.

According to the index, the EU currently remains the strongest economic power in its neighbourhood, significantly ahead of its rivals. However, the data also reveals that China, Russia, and the US are catching up in key regions. This highlights the importance for the EU to carefully consider its geoeconomic role and implement strategies to maintain its competitive edge.

In light of the current return of power politics, it has become evident that economic interdependence is not guaranteed and must be strategically utilized to ensure stability and influence. “Europe remains the most important partner in its neighbourhood,” states Daniela Schwarzer, member of the Bertelsmann Stiftung Executive Board. “However, since 2001, the EU has lost some of its relative importance while China has systematically gained ground. The US, on the other hand, has withdrawn economically from the region, with the exception of Israel. Recent events in Ukraine and Moldova have also shown that close economic ties with the EU do not deter Russia from using military force or destabilization tactics. This emphasizes the importance of strategic and decisive use of economic interconnectivity.”

The GEOII highlights that having market power alone is not enough to ensure influence or cooperative relationships. The EU must strategically utilize its single market and economic ties to promote stability and partnerships in its neighbourhood. Some of the suggested strategies include updating its accession policy and introducing a phased integration process for the Western Balkans, modernizing its customs union with Turkey, expanding the Global Gateway as the EU’s strategic infrastructure initiative, and strategically leveraging markets, capital, and regulations to promote stability and cooperative relations.

The GEOII will be presented at an online launch event on October 1, from 14:00-15:30 CEST. The event will discuss the main findings and implications for the EU’s neighbourhood policy. Interested individuals can register for the event at this link.

For media inquiries, please contact Etienne Höra at +49 52 41 8181-197 or etienne.hoera@bertelsmann-stiftung.de.