The year ahead in 2016: the EU

Predicting how things will turn out in Europe during the New Year probably makes less sense than describing what are the challenges – or crisis points if you like – that need to be faced. These have been piling up over the past 18 months. They have strained political cohesion within the EU and undermined its economic effectiveness. 

Top on the list, as interlinked but separate issues, come terrorism and immigration. 

The “new” terrorism is ostensibly a reply to French and British military involvement in the Middle East. In reality it is fed by Europe’s failure to economically and culturally integrate strata of young, unemployed Muslims, born in Europe of immigrant parents and living in marginalised and deprived communities.

The huge surge in immigrant numbers that occurred in 2015 is likely to continue in 2016, especially if Libya’s problems persist and Turkey slackens its commitment to restrict refugee outflows. 

Germany is reaching the limit of what it can reasonably absorb in the short term. It will press other member states to assume more of the burden. Since in the view of some, Germany was instrumental in encouraging the refugee build-up, this pressure will be resisted. 

No wonder that EU member states are still divided over a common response by way of: anti-terrorist military action; effective cooperation on security matters; management of external border controls; maintenance of freedom of circulation within an already fractured Schengen zone, as well as inside the Union; the repartitioning of refugees by country quotas; concerns related to human rights and “European” values; financial back-up for enhanced security measures and refugee support inside and outside the Union; the maintenance or otherwise of Dublin II arrangements. All these dilemmas plus others raise fractious uncertainties.

Meanwhile, the economic situation remains problematic. Deflation is undermining recovery and investment, despite the quantitative easing programme being run by the European Central Bank for the eurozone. Too many economies are either stagnant or registering slight growth. Unemployment among the young is too high. As a whole, the EU is recording big trade surpluses with the rest of the world, while internal consumption stays flat.

Austerity has succeeded in driving eurozone budgets within the guiding limits set by the Stability and Growth Pact, but at tremendous political and social costs. It has failed to trigger significant growth, except arguably in Spain. The momentum to “complete” the economic and monetary union has weakened considerably. 

Unsurprisingly, the divergence between north and south continues to deepen. Greece has been brought back under economic and social tutelage following the brief revolt of the Tsipras administration. However, a new breakdown in the Greek “bail-out” programme cannot be excluded.

Fragile majorities

Meanwhile, EU member states will negotiate changes to the UK’s membership terms. Some accommodation between the British and the rest should be possible. It could require compromises that will not be to the taste of all. Turmoil could result from the referendum in Britain on the country’s continued membership of the EU, which should follow. It will come hot on the heels of another referendum in Holland during the spring, focusing on EU-Ukraine relations. 

The latter, and the stand-off with Russia that has developed as a result, will again threaten political cohesion among EU member states. Inherent differences of national interests and appreciation regarding Russia have been smoothed over up to now. They could be sharpened by terrorist and immigration issues, in the absence of a modus vivendi on the Ukraine that would be acceptable to all.

All this amounts to quite a long agenda of woes. It requires the EU to operate in firefighting mode. Yet on a national level, traditional parties of the mainstream left and right are facing huge difficulties. Globalisation and the European “project” have over the years brought the traditional mainstream left and right to endorse convergent policies. 

However, these now seem powerless on the economic and immigration fronts. Voters are increasingly turning towards more radical proposals on left and right, delivering fragile governing majorities. This has happened in Greece, Holland, Denmark, Finland, Portugal and Spain. Quite possibly, France is next in line.

The year 2015 has not been a good one for Europe. 

Unfortunately, the chances that 2016 will record an improvement appear still to be quite slim at the time of writing.