International Institute for Middle East and Balkan Studies (IFIMES[1]) from Ljubljana, Slovenia, regularly analyses developments in the Middle East, the Balkans and around the world. Prof. Dr. Anis H. Bajrektarevic, professor of international law and global political studies based in Vienna, Austria, has prepared a comprehensive analysis entitled “Haunted by Two Ongoing Guernicas: Europe Searches for Its Moral Triumph.” In this work, he examines Europe’s role in the global arena and questions whether the continent will ever be able to achieve a moral triumph again.
(Lessons from Iceland, Bhutan, and New Zealand)
“It is not the walls that make the prison, but the prisoners themselves.”
Mak Dizdar
Caught between two never-ending conflicts of uncertain ends and its beginnings —Palestine and Ukraine—and trapped in a cycle of confrontational despair, the European continent finds itself demoralized and disoriented, deindustrialised and disenfranchised. Hot rhetoric does not warm up a steep, cold recession. As it witnesses loss of its geopolitical centrality, the unravelling of global cooperation – to say; slowbalisation, internal depopulation, collapsing social cohesion and fracturing cross-generational contract, Europe desperately searches not just for stability, but for its moral triumph.
What could mark such a turning point? Is the strategic decoupling and geo-economic binarization a way out? Is there, on the horizon of an attainable future, a model of renewal—one grounded not in abstract geopolitical ambition, but in the tangible, lived well-being of its people? In seeking an answer, Europe might look not to its (selectively interpreted) past or (deceiving) power, but to its priorities.
In a world often driven by economic growth metrics such as Gross Domestic Product (GDP), some nations have dared to redefine what it means to thrive. Rather than chasing purely financial gains, countries like Iceland, Bhutan, and New Zealand have taken bold steps to prioritize the holistic well-being of their citizens. Iceland’s recent shift to a nationwide four-day workweek, Bhutan’s long-standing focus on Gross National Happiness (GNH), and New Zealand’s reimagined budgeting framework centered on well-being illustrate three distinct, yet deeply aligned, approaches to redefining progress in the 21st century.
Since 2019, Iceland has been at the forefront of an innovative experiment in workplace reform. Through a series of trials led by Reykjavík City Council and the national government, the country tested reduced working hours for thousands of workers without a drop in pay (Haraldsson & Kellam, 2021). The results were overwhelmingly positive: improved work-life balance, lower stress levels, and in many cases, even higher productivity.
The Icelandic model challenges the assumption that more hours equal more output. It also generated ripple effects in gender equality. Men and women reported greater sharing of domestic duties and child-rearing responsibilities, making the shorter workweek not only a labor reform but also a cultural shift.
Unlike most current narratives that link the introduction of new technologies (such as AI) with massive joblessness, Icelandic case is a strikingly bright. This transformation reflects a broader national commitment to well-being, mental health, and equity. Iceland’s success reveals that redefining the workweek can improve both quality of life and economic performance. Simply, the new technologies can bring the self-realisation for many, not just a profit for the few.
Bhutan stands as a global benchmark in its official rejection of GDP as the sole measure of progress. Since the 1970s, the country has embraced Gross National Happiness (GNH), a development philosophy structured around nine domains, including psychological well-being, health, education, good governance, and ecological diversity (Ura et al., 2012). This multidimensional model is designed to ensure that material growth does not come at the expense of spiritual and environmental integrity.
Bhutan’s policies reflect this philosophy. The country is not only carbon-negative—absorbing more carbon than it emits—but also constitutionally mandated to preserve at least 60% forest cover (Royal Government of Bhutan, 2008). Tourism is limited to minimize cultural and ecological disruption, and all national planning must pass through a GNH policy screening tool. Personal happiness in Bhutan is a constitutionally guaranteed category.
The Club of Rome warned in its landmark 1972 report Limits to Growth that unchecked economic and population growth would inevitably collide with the planet’s finite resources (Meadows et al., 1972). Bhutan’s development philosophy can be seen as a rare real-world embodiment of this insight: a country designing its policies around planetary boundaries before surpassing them. Bhutan is not against economic growth but it prioritises social development, following the 3M matrix: maximum good for the maximum species over the maximum time.
In 2019, New Zealand launched the world’s first “Wellbeing Budget,” a fiscal framework prioritizing citizen well-being over short-term economic growth. Spearheaded by then Prime Minister Jacinda Ardern and its Finance Minister Grant Robertson, the initiative aimed to address systemic issues like mental health, child poverty, and indigenous inequality (New Zealand Treasury, 2019).
Instead of merely focusing on GDP or deficit targets, policies were evaluated based on how they improved life satisfaction, social cohesion, and long-term health outcomes. For example, major investments were funnelled into mental health services and the support of marginalized communities, such as the Māori and Pasifika populations.
As economist Thomas Piketty notes in Capital and Ideology, “Every human society must justify its inequalities: unless reasons for them are found, the whole political and social edifice stands to collapse” (Piketty, 2020, p. 6). Iceland, Bhutan, and New Zealand (as well as sporadically the Latin American examples, such as those of Uruguay, Argentina, Peru, Brazil, Venezuela, Mexico) implicitly answer this challenge by reducing structural inequities and embedding well-being into their policy frameworks.
While the specifics differ, Iceland, Bhutan, and New Zealand all embody a significant shift in national priorities. They challenge the dominant global narrative that defines success in purely economic terms. Their experiences show that it is possible to elevate health, equality, sustainability, and happiness without sacrificing prosperity.
This trend is timely. The world today faces an epidemic of burnout, climate emergencies, collapsing social cohesions, rising inequality and over-militarisation instead of good neighbourly collective security. The traditional growth-at-all-costs model is no longer adequate. Neither more products lead to prosperity, nor do increased security expenditures translate into greater stability and safety. The Limits to Growth report predicted systemic collapse unless societies transitioned away from the pursuit of endless material expansion (Meadows et al., 1972). That warning, echoed decades later by doctors, sociologists, and economists alike, is more urgent than ever.
As Piketty (2014) writes, “The history of inequality is shaped by the way economic, social, and political systems interact” (p. 20). These three countries, along with the numerous earlier examples, offer a model of interaction that fosters dignity, justice, inclusion and cohesion over mere expansion.
In parallel with structural economic reforms, any meaningful shift toward well-being in Europe must also acknowledge the psychological and social toll of constant digital exposure. The latest acceleration of digital platforms into nearly all aspects of life—work, education, governance, and even leisure—has created what many now call an always-on culture. This has not only blurred the boundaries between public and private life, real or simulated, but also contributed to rising levels of anxiety, burnout, and digital fatigue, especially among younger – increasingly contactless – generations.
A recovery plan rooted in well-being must defend what could be termed basic liberty -the right to an analogue life—the right to meaningful offline time, unmediated by screens, algorithms, or notifications. Public institutions, workplaces, and schools should actively promote “analogue weekends,” nature immersion programs, and screen-free zones to restore attention, mental balance, and human connection.
As Erich Fromm foresightedly observed, modern individuals risk becoming “having” rather than “being”, caught in a mode of existence dominated by possession and consumption rather than authentic experience and presence (Fromm, 1976, p. 41). Protecting analogue space and slowness is not a nostalgic act but a strategic investment in mental resilience and civic cohesion in an overstimulated age, especially for the younger cohorts of our societies. (Analogue retreat modalities, as e.g. these offered by the Global Academy for Future Governance, are valuable models for reflection, reloading, and adjustment.)
In contrast, much of the European Union—and particularly its candidate countries—grapples with structural stagnation. Regional inequalities, youth unemployment, demographic decline, and democratic erosion (voters’ apathy) reflect a broader crisis of legitimacy and purpose. While the EU's brief recovery (through quantitative easing) offered a short-term lift, deeper structural problems remain unresolved.
Former Greek finance minister Yanis Varoufakis argues that Europe’s economic framework is often driven by technocratic logic that isolates fiscal policy from democratic control (Varoufakis, 2017). In his works, he advocates for radical democratization of economic life, public investment in green technology, and replacing extractive capitalism with participatory models (Varoufakis, 2020) – similar to the Yugoslav socially (not, a state owned) self-management models, the so-called self-managing interest communities of labour (so-called SIZ and OUR). These ideas, previously implemented in Yugoslavia, Spain (Mondragon), Parecon (Albert-Hahnel initiative), Worker-Owned Cooperatives (e.g., USA, Argentina, Italy), and Israeli Kibbutzim, align strongly with the well-being-centred governance models recently implemented in Iceland, Bhutan, and New Zealand.[2]
A European recovery plan inspired by these examples would involve six strategic actions:
Iceland, Bhutan, and New Zealand each represent a distinct but converging trend in governance: the prioritization of well-being over traditional economic performance. Whether through a shortened workweek, happiness-based development or a well-being-oriented budget, these countries are forging paths toward a more humane and sustainable future.
Thomas Piketty’s work reinforces the need for such rethinking. As he argues, the persistence of inequality cannot be understood apart from the systems that produce and justify it. The Club of Rome warned decades ago that the planet itself cannot sustain the dominant economic models we inherited. Yanis Varoufakis adds that democracy must return to the heart of economic design, of already successfully tested Yugoslav model of social ownership, self-management.[4]
For the EFTA, the EU and its candidate countries, this is not just a moment for economic repair—but one for generational renewal. With a bold shift toward well-being, inclusion, youth empowerment, and the urgent need to tackle overfinancialization, overdigitalisation, oversecuritasation and overconsumption along with the ecological limits, Europe can build a new foundation for prosperity—one that serves both its people, planetary raw-model for many generations to come.
Finally, will Europe be able to triumph morally ever again? The main obstacles to such mastery, especially considering the Continent’s loss of initiative on the international arena, can be outlined as follows:
In brief, the Continent’s main obstacle to moral triumph is not a lack of values, but a lack of coherent, principled, and decisive action to defend and promote them in a fragmented, interest-driven global system. Without genuine leadership, unity, collective (not selective) security as stipulated by the Helsinki accords and the Charter, strategic independence and coherence, as well as the courage to accept economic and political costs for moral leadership, Europe risks further irrelevance on the world stage.
Bhutan or Nepal, simple choice.[5]
About author:
Anis H. Bajrektarevic is chairperson and professor in international law and global political studies, Vienna, Austria. He has authored eight books (for American and European publishers) and numerous articles on, mainly, geopolitics, energy and technology. Professor is editor of the NY-based GHIR (Geopolitics, History and Intl. Relations) journal, and editorial board member of several similar specialized magazines on three continents. Earlier this year, his 9th book was issued in New York.
The views expressed in this article are the author’s own and do not necessarily reflect IFIMES official position.
Ljubljana/Vienna, 13 October 2025
[1] IFIMES – International Institute for Middle East and Balkan Studies, based in Ljubljana, Slovenia, has a special consultative status with the United Nations Economic and Social Council ECOSOC/UN in New York since 2018, and it is the publisher of the international scientific journal "European Perspectives."
[2] It is worth noting the real attempts to respect labour autonomy and the self-realisation of society as a whole (that leaned on the Antonio Gramsci and, Herbert Marcuse’ as well as on the works of Erik Olin Wright, Murray Bookchin, Michael Polanyi and the Pareconese; Michael Albert and Robin Hahnel). Still, considering its global recognition and the contemporary context, the thinker closest to it is Hayek: And well, it is the Yugoslav Self-management system that is the most thorough and elaborate realisation of the basic Hayek’s (socio-)economic theory. Both –his theory as well as the Yugoslav practice– regar-ded the following as central to the very success of a society: (i) Decentralisation; (ii) Optimisation of the market mechanisms; (iii) Limits to the central planning; (iv) Freedom and Autonomy enhancement. Surely, while Hayek was primarily attuned to the pure economic needs, the Yugoslav system demonstrated great attention to overall societal well-being (eliminating many of the hidden costs).
[3] It is absolutely fascinating and insightful to compare theblockchainand Yugoslavia’s SDK (Social Bookkeeping Service/Služba društvenog knjigovodstva). Hence, the author of this text is inviting researchers and practicioners to study SDK system for the futher betterments of the banking/finance systems. Though very different in terms of technology and historical context, the two do share conceptual similarities in how they manage accountability, fees, decentralization, and transparency. Yugoslavia’s SDK was, in many ways, a proto-blockchain idea in a centralized socially owned form: (i) It functioned like a clearing house or state ledger, charging NO fees for its services. Hence, it was apublic service, not a profit-seeking institution; (ii) It embedded trust and compliance into the decentralised financial infrastructure; (iii) It offered transparency and control, by centralized social oversight and public recordkeeping; (iv) It pursued systemic accountability, much like blockchain aims to do today; (v) It enjoyed full support and trust from the entire community, as it was genuine and rooted in its own society.
[4] One of the most influential figures in literature, politics and culture of the modern age, Jean-Paul Sartre famously claimed: “Yugoslavia is the realization of my philosophy.” In the same tone, Britain’s King Charles III (then Prince), speaking to the media in early 1970s — as Director Zbanic beautifully reminds us in her latest work, nominated for an 2026 Oscar — says, “The Yugoslav self-management model deserves a closer look, as it might be indispensable for the stability and prosperity of Europe.”
[5] It refers to the recent massive popular revolt against all three major political parties – both ruling and opposition – driven by unbearable social and economic disparities in Nepalese society. The discontent, that turned violent and resulted in the deaths, injuries and hasty flight abroad of government officials and their family members, was fuelled by chronic, unsolved issues such as youth unemployment, corruption, lack of access to quality education and healthcare, and the ever widening gap between the rich and the poor.
