FRANKFURT — Europe’s economic fortunes hinge increasingly on trade with autocracies and dictatorships — and the trend may accelerate further if it wants to expand its geopolitical influence and turn its currency into a competitor for the dollar.

“Over the last 25 years the EU’s trading partners have become less and less democratic,”  ECB economists wrote in a blog post released on Tuesday. 

In part, that’s due to the expansion of trade with China, which now accounts for one-fifth of the continent’s imports overall and is an almost exclusive supplier of various critical raw materials for advanced manufacturing, so-called rare earths. China ranks 172nd out of 179 countries in terms of democratic standards in the ECB’s study.

But it also reflects the growing dependence, until 2022, on energy imports from Russia. The EU has sharply reduced its supply of Russian gas and oil since the Kremlin’s invasion of Ukraine in 2022, but largely by striking deals with other authoritarian countries such as Qatar and Algeria, said Heather Grabbe, senior fellow at economic think tank Bruegel.

The EU’s ability to spread its values in the world through commerce failed spectacularly in the case of Russia, but has in any case faded in recent years as its economy has stagnated. Europe’s share of global economic output was over 25 percent in 2004, but was only 13.4 percent last year, and is projected to fall further in the coming years.

“The EU must be aware of its limits. It risks overplaying its hand,” said Gabriel Felbermayr, president of the Austrian Institute of Economic Research (WIFO). “The world is changing, and the influence that the EU still has today is decreasing year by year.”