László Szepessy, a BGD Young Voice 2026, argues that predictability can become a strategic advantage for Europe in an increasingly uncertain global economy. Drawing on recent trade agreements and political developments, he explores how credible commitments can strengthen investment, build trust with international partners, and help Europe forge alliances that endure.
We often come to value something only when the possibility of losing it arises. Europe may now be reaching that point with predictability. For decades, a business operating in the EU could assume that contracts would be honored, regulations would change through a recognizable process, and market access would survive the next election. Because this framework was familiar, it was easy to regard it as administrative background. In a world of sudden tariffs, disputed alliances, and agreements reopened within months, it has become an economic asset. Europe should learn to present it as such.
Recent U.S. trade policy offers a warning. In 2025, businesses on both sides of the Atlantic planned around tariffs that could be announced, suspended, or rewritten within weeks. In early 2026, new tariff threats became entangled with the dispute over Greenland, even though the United States and the EU had agreed to a trade framework the previous July. No tariff needs to be collected for uncertainty to influence investment. A manager who cannot estimate the price of an input six months ahead may postpone an order, change suppliers, or require a higher return before accepting the risk.
An ECB model estimates that trade policy uncertainty reduced euro-area growth by about 0.3 percentage points in 2025, with an effect on business investment roughly three times larger than on consumption. The cost begins before the customs office, with decisions delayed and projects that never leave the boardroom.
Research suggests that greater certainty can produce the opposite effect. Kyle Handley and Nuno Limão's study of Portugal's entry into the European Community found that credible access encouraged firms to enter export markets, even though existing tariffs were already low. Membership gave businesses reason to believe that today's access would persist tomorrow, making them more willing to bear the fixed cost of entering a foreign market. This distinction matters because the value of a trade agreement cannot be inferred from its headline tariff reductions alone.
Europe's recent agreements offer an opportunity to put that principle into practice. Trade agreements can support wider alliances by giving partners a lasting commercial stake in cooperation. The EU–India free trade negotiations, concluded in January 2026, could remove or reduce duties on more than 96% of EU goods exports to India. The figure is impressive, but exporters will also ask how customs procedures work, which rules apply to services, and whether an administrative problem can be resolved before a delayed shipment becomes a loss. These provisions determine whether a political announcement develops into a commercial relationship that firms can actually use.
Indonesia adds a distinct strategic motive. The Comprehensive Economic Partnership Agreement, concluded in September 2025, will eliminate 98.5% of Indonesian tariffs on EU goods and open parts of the services market. Indonesia is also a major producer of nickel and cobalt, both essential for batteries, digital technologies, and the green transition. For European manufacturers, a stable relationship with Indonesia offers more than an export opportunity: it provides another route to inputs whose concentration has become a geopolitical vulnerability.
Mercosur highlights the political difficulty more clearly. The interim trade agreement has applied provisionally since 1 May 2026. A European wine or cheese producer may see a new market, while a beef or poultry producer may face new competition. Both reactions are rational. The gains from diversification can be spread across the economy, whereas the costs often fall heavily on a particular sector or region. This is where a coherent European strategy meets national politics.
The EU's institutional problem is easy to describe but difficult to solve. The Commission negotiates a single agreement, but national politics can turn it into 27 arguments about who gains, who pays, and who was heard too late. Most Council decisions on international agreements are taken by qualified majority, yet a workable legal procedure cannot, by itself, create political durability.
My view is that Europe should decide on its strategic direction earlier and defend it more firmly. If reducing dependence on a handful of markets is a shared objective, a sectoral dispute should alter the terms of adjustment rather than reopen the entire strategic question. This would not require governments to ignore national interests. It would require them to address those interests during negotiations, before the costs become visible and opposition hardens into a veto.
In practice, transition periods and safeguards should have clear triggers, deadlines, and beneficiaries. Mercosur's protection for sensitive agricultural sectors is a start, though the credibility of these safeguards will depend on implementation. Governments should also explain who will help affected suppliers and workers invest, retrain, or reach new markets. Those asked to bear the visible cost of a European strategy deserve more than a forecast showing that Europe benefits in aggregate.
The same seriousness is needed after an agreement is signed. Governments provide continuity in the rules, while businesses can identify practical obstacles and explain how those rules affect commercial decisions. Governments and business associations should publish whether smaller firms actually use the preferences negotiated on their behalf and how long customs problems remain unresolved. An SME chapter has little practical value if an exporter cannot find the right contact or get an answer in time. Implementation attracts less attention than a summit photograph, but it is where trust is either built or lost.
Central Europe has recently offered two examples of how political developments can influence investor expectations. After George Simion's first-round presidential victory in Romania in May 2025, the leu came under sharp pressure, prompting substantial intervention by the central bank. Following Péter Magyar's April 2026 election victory in Hungary, the forint strengthened amid investor expectations of better relations with the EU.
Neither episode is a controlled economic experiment; exchange rates respond to many influences. Perceived uncertainty can erode confidence, while expectations of greater policy continuity can support it. Predictability should not be confused with keeping everything unchanged. Governments can phase in a new customs requirement on a published timetable or consult businesses before revising a product standard, allowing firms to prepare for change.
Trust may sound like a soft concept until it appears in an exchange rate, a borrowing cost, or a postponed factory order. Money, contracts, and institutions function because people who may never meet expect others to continue playing by recognizable rules. Trade agreements rest on the same expectation at home and abroad. If either audience believes that a promise will be casually revised, part of its economic value disappears before the first tariff is cut.
Europe cannot make the international system orderly, but credible commitments can help it build alliances that endure. Agreements with India, Indonesia, and Mercosur must be usable abroad and politically defensible at home. That requires faster implementation, serious support for concentrated losses, and enough resolve to prevent every domestic dispute from reopening the strategic direction. Europe's promise is simple: what it says today should still mean the same tomorrow.
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