anyway.

This makes JBR go "Nicely scaled setting"
I think you're working at a significant advantage, Vincent, in that by using Europe as your backdrop, you have a sort of granularity in your setting -- I mean, you have regions -- that most published game worlds do not. Usually it's a nation (despite it being pre-nationalism, but that's another rant) with five to eight major cities. Escalation in such a setting naturally goes City -> Nation -> Continent -> World. There are just too few steps on the ladder.

This makes ecb go "Different is the main thing."
You don't necessarily need to escalate up for the next dynamic situation to be interesting. It just has to be new & engaging. Escalation would be good for long story arcs, but I can easily see playing long term with sequential, similar level crises. Just like some series have continuity & some don't.

This makes MDS go "Is there a need?"
Is there really an innate need within an RPG to escalate conflict in terms of sheer power or scope (outside of the personal)? In games I've played most groups were happy enough to slay demons and save the kingdom one day and then work hard trying to figure out how to sell cooked 'chinchila on a stick'(tm). Escalation is nice from time to time but it does not have to be a continual incline starting from zero and climbing to saving the known reality and then might as well retire as gods; or even linear. Okay, that is what is written into the old Advanced D&D ruleset and I enjoyed the heck out of that twenty plus years ago. I play for the narrative but a messy narrative because I do not often lay out my characters plots so that they cause a steady flow of escalation and even if I did there's all those pesky other players who want their characters to have narrative time and attempt to derail my plans (see I would have said my characters' plans but all this wacky Forge speak has me second guessing myself). On a side note I ran a D&D game a few years back for friends and employees and while there was a save the world plot line out there in case the group wanted it, they decided it would be better to go and find out what happened to their armoir that got teleported months (game time) prior. So even with a game geared towards linear escalation they decided saving nations, races and/or world was silly and went back to saving small towns and city factions.

This makes VB go "what's necessary is escalation..."
What isn't necessary is that it's escalation upward in scale. Escalation can be inward, outward, upward, whatever.

This makes BR go "There is something about reward cycles, however."
Escalation can go multiple ways, but because most trad RPGs have the characters become more powerful over time (experience, yo) the challanges tend to grow in scope. RPGs without "get power by experience" mechanics would probably do better at long term play without scope and setting escalation.

This makes VB go "that seems right to me, Brand."

This makes MDS go "I can see that"
Sure there is a need for escalation, or I'd rather think of it as changing needs/desires/goals of the characters but at first escalation was posed more in the super hero sense of beat up purse snatcher, fight the Ringer, defeat Venom, save the Earth from Galactus, become hero of the Multiverse. Escalation as a purely personal thing for a character in the narrative though I think is better. There I said it.