Brexit and the election of Trump have contributed to the creation of a certain momentum in Europe. A window has opened for renewal in Europe.
Sixty years after the Treaty of Rome, Europe is facing the moment of truth. Circumstances have improved and this has opened a window for renewal in Europe. But there is a limited time period, fixed by the date when the new German government takes office (not before April 2018) and the European elections in May 2019.
Paradoxically, Brexit and the election of Trump in the USA have contributed to the creation of a certain momentum in Europe. Slowly but surely, Europe’s recovery is under way. The eurozone is showing both development and stability, with a growth rate of 2.3% that is greater than that of both the USA (2.1%) and the UK (1.7%), an unemployment rate down from 12.2% to 8.7%, a considerable trade surplus, as well as a deficit and public debt down to 1.1% and 87% of GDP respectively. Recovery is well-balanced and is greatly benefiting southern Europe. The financial sector, actively supported by the ECB, is regaining a certain vitality and is going ahead with restructuring, notably in Italy and Spain.
On the political front, in line with Tocqueville’s paradox that showed that the risk of revolution is at its height at the end of a crisis, Europe is under pressure from populism which feeds on the aftermath of recession, on the disintegration of the middle classes, on fear of globalization and the digital revolution, on the waves of immigration and on renewed security risks. But there has been unexpected resistance to all this. The rise of demagogues in Germany, Austria and the Czech Republic has been counterbalanced by their defeat in France and the Netherlands. Far from disintegrating or encouraging the break-up of its member states, the European Union is currently offering a united and coherent response to Brexit and to Catalonian separatism.
However, the question still remains whether Europe will renew itself or will implode.. The founding principles upon which the EU was built – resistance to the USSR, guaranteeing American security, Franco-German reconciliation, and using the law and market forces to override politicking – are obsolete. Economic risks are still high because of low productivity and investment – especially in artificial intelligence –, competition from emerging nations, technological dependence on the GAFAM oligopoly, vulnerability with regard to the increasing numbers of speculative bubble, and the eurozone’s insufficient level of resilience. The danger of populism has by no means been warded off, as can be seen in the strong position of the Cinque Stelle movement in the campaign leading up to the Italian elections next March, and in the convergence of the Visegrad group of countries on the model of “illiberal democracy” promoted by Viktor Orban. The defeat of Islamic State in the Levant is strengthening the terrorist threat to Europe and there is increased pressure from the Russian and Turkish démocratures (a combination of democracy and dictatorship).
The urgency for Europe is no longer to negotiate new treaties, but to bring concrete answers to its citizens’ demands. There are four priorities.
The first concerns the perimeter and the identity of the EU. It means conducting the second phase of the Brexit negotiations with determination and coherence even though the key issue of the indemnity paid by the UK will no longer gain consensus among the 27. It also means – in order to preserve European values – that we must abandon negotiations with Turkey over its membership (as that country is on a path toward autocratic rule and Islamism) in favor of some sort of special relationship.
The second concerns the eurozone, which must be strengthened in order to sustain the inevitable shocks that will soon be caused by the increasing numbers of speculative bubbles. There is a very full schedule for this, but it is bringing French and German concepts into direct opposition over the emergence of a transfer union.
The third concerns the immigrant crisis, which profoundly divides the EU member countries. Italy has taken in over 620,000 people in four years. In order to harmonize rights to immigration and asylum, Europe’s external borders have to be controlled.
The fourth concerns security – needed so as to respond to the rise of strategic threats and the disappearance of reassurance provided by the USA. There is a need for a Security Union, whose tasks would include the fight against terrorism, the protection of vital infrastructures, external border control and cyber-defense. It can only be effective if it is paired with the determining of a European security strategy and a rearmament plan that brings military expenditure up to a minimum of 2% of GDP.
Time is short and the constraints are many. The UK is absorbed by Brexit, which will take it into a new era of decline. Italy is taken up with barring the way to Beppe Grillo. Spain is mobilizing in combat against Catalonian separatism in order to preserve its unity.
Central and eastern Europe is obsessed by the defense of its identity in the face of immigration. Therefore everything hangs on the couple formed by France and Germany.
(Column published in Le Figaro, 8th January 2017)