Strategic Realignment and Implications for Europe & Central Europe, with a Special Focus on Hungary

Europe is entering a period of “forced multipolarity,” where strategic choices are narrowing and costs are rising. Three broad paths are emerging:

✓ Strategic Alignment with the U.S.
Guarantees defense under NATO and secures access to North American markets. However, it compromises Europe’s strategic autonomy and leaves it vulnerable to U.S. domestic political volatility.

✓ Hedging and Strategic Autonomy
Involves tailored agreements with both the U.S. and China while preserving technological sovereignty. Yet, this strategy risks Europe being squeezed between rival powers and suffering from high internal fragmentation costs.

✓ Deep Regionalization (“Fortress Europe”)
Seeks to build economic and technological resilience and promote the Euro as a partial reserve currency. This inward turn, however, would shrink Europe’s global influence and exacerbate internal tensions, fueling populist backlash.

Recent EU Commission white papers (April 2025) and Geopolitical Futures assessments suggest that Europe will likely pursue a hybrid strategy: reinforcing transatlantic defense ties while selectively decoupling from China in key economic sectors and accelerating industrial sovereignty — particularly in defense, energy, and digital technologies.

In this emerging environment, Central and Eastern Europe (CEE) must navigate a complex overlay of economic realignment, technological bifurcation, and shifting geopolitical loyalties. Hungary, uniquely exposed by its deep ties to China and Russia, finds itself at the intersection of these forces. Its strategic choices over the next 12–24 months will define its long-term positioning within Europe, the transatlantic alliance, and the wider global system.

Control over technology ecosystems — semiconductors, artificial intelligence (AI), and green energy — will increasingly define strategic power in the coming decade. As global power centers harden into competing blocs, CEE countries that invest early in resilience, technological competitiveness, and strategic clarity will be best positioned to transform systemic disruption into national advantage.