Europe Goes to Love Island

This blog post is based on an article published in El País on the 25^th of January 2026. The original article can be found here.

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At the final bonfire, the contestants on La isla de las tentaciones – the Spanish version of Love Island which gave us one of the best TV moments of 2025 – are forced to confront the ultimate decision: leave the island alone, return with the partner they arrived with, or depart with the “seducer” they met on the show. Over the preceding weeks, they have lived through an alternative reality and, from that vantage point, choose what they believe will be their new life.

Economists would describe this situation as a counterfactual, and they would label what the contestants give up when making their choice as an opportunity cost. Europe, of course, does not have the luxury of temporarily testing an alternative reality. But it can project one. And by failing to answer the fundamental question of its relationship with Mercosur, Europe is already incurring a significant opportunity cost: the cost of what might have been, but is not.

In a world where the fast eat the slow, agility in decision-making is an undeniable advantage. This is not the quality for which the European Union is best known, and the handling of the EU-Mercosur trade agreement is a case in point. Negotiations began in 1999, yet it was not until 2019 that the two regions finally concluded a deal. Even then, the agreement was only signed more than six year later, on 17 January in Asunción, Paraguay, by Ursula von der Leyen and António Costa, presidents of the European Commission and the European Council. Last Wednesday, the European Parliament decided to refer the treaty to the Court of Justice of the European Union. This step may delay the EU’s ratification of the agreement by at least another two years.

If the agreement doesn’t take effect until 2028, the opportunity cost of eight years of delay would amount to €280bn in foregone exports and €447bn in lost gross domestic product across the EU. Each additional month of delay during 2026 translates into €4.4bn in GDP that is never generated and €3bn in exports that are never realised.

The delay in bringing the agreement into force is a symptom of a deeper malaise: Europe’s inability to acknowledge that every decision entails costs as well as benefits. This logic applies as much to La isla de las tentaciones as it does to trade agreements. In the case of Mercosur, it is true that certain agricultural products may be adversely affected. For that reason, the agreement includes quotas, safeguard clauses and a compensation fund designed to cap and remedy potential losses. However, for the vast majority of economic sectors, including agri-food, the agreement would lead to higher sales.

Europe’s hesitation carries a direct cost, reflected in the wealth that is never created and the commercial gains that never materialise.

A Europe that is afraid to take decisions and accept the trade-offs they entail is not only poorer, but also less assertive. In an increasingly polarised world, the EU must be able to defend its interests. That requires confronting trade-offs and overcoming internal constraints that slow down or entangle decision-making. This does not mean abandoning citizens or sectors whose interests are adversely affected, but rather acknowledging those costs and seeking to minimise them.

At the final bonfire, Europe should weigh the dilemmas implicit in each choice, including the cost of kicking the can down the road. These decisions should aim to shape the current international reality as outlined by Mark Carney’s speech at the World Economic Forum in Davos. If the United States and China use their economic might as a tool of geopolitical power, the EU-Mercosur agreement is a way to reduce their leverage.