2011: ‘Annus horribilis’ or ‘annus mirabilis’?

One year ago, analysts were calling 2010 Europe's “annus horribilis”, a horrible year. Little did they know about the events that were to follow…

Flicking through the images of 2011, it is hard not to feel a seismic shift: Once-invincible Arab regimes brought down, Japan's earthquake and ensuing nuclear disaster, another eye-popping chapter written in Europe's debt and currency history.

Here is a review in video by EURACTIV's EUX.TV:

Predictably, it was the unfolding debt crisis which dominated headlines, with politicians starting to fear the break-up of the eurozone and the EU, warning of “the worst times since World War II”, whilst divisions between Europeans deepened and populism flourished.

EU countries looked like mere domino pieces in a suite of economic collapses: After Greece, Portugal and Ireland were brought down in 2010, pressure started building on Spain and Italy, and more recently even healthy economies saw their coveted AAA debt ratings threatened.

It was also a year of discontent over economic uncertainly, social inequality and inexplicable violence. Greeks outraged at their government's austerity measures took out their frustrations on the streets. 'Indignados' demonstrated against joblessness and 'capitalism' in Spain. With the pageantry of the royal wedding fresh in mind, a wave of violent riots swept over London and other British cities. Norway suffered its worst peacetime massacre on the once-peaceful island of Breivik.

Arab revolutions

“2011 has been a bad year,” Brussels political analyst Janis Emmanouildis told EURACTIV.

On 4 January 2011, a 26-year-old Tunisian fruit vendor died of burns over 90% of his body three weeks after setting himself on fire to protest police who would routinely confiscate his goods.

It was the spark for revolutions that would sweep the Arab world. The popular uprisings against authoritarian regimes across the Arab world at first brought the hopes of an Arab Spring akin to the wave of freedom and opportunity that swept Europe after the fall of the Berlin Wall and collapse of the Iron Curtain. European Commission President José Manuel Barroso described the unfolding events as "a rendez-vous with history".

However, it also created a refugee “panic” in Europe in countries like Greece and Italy that were also facing other pressure. Some of the ousted dictators survived for decades thanks in part to Western support.

After the promise of the Arab Spring came an autumn that disenchanted the Union. Tunisia's elections brought Islamist party to power. In Egypt, elections took place amid violence. In Libya, NATO fought a war, spearheaded by Britain and France, under the pretext of enforcing of a no-flight zone. Libya's dictator Muammar Gaddafi came to a violent end under highly suspicious circumstances.

The EU was largely on the defensive as events unfolded, with France and Italy squabbling over refugees from Tunisia, while the Commission appeared impotent. France vigorously contradicted the European Union's counter-terrorism chief Gilles de Kerchove, who said that the Libyan conflict had raised the terror threat in Europe.

Under pressure from France and Italy because of the North African refugee situation, the Schengen passport-free agreement was rewritten to give governments greater control over their borders. The European Commission reluctantly bowed to the pressure, dealing a blow to one of the signature benefits of European unity.

Euro crisis

As another year begins, there is no end in sight to the euro crisis. A succession of leadership summits has failed to calm worries about the common currency, EU solidarity and European leadership. Emmanouildis called the gather “the enigmatic summit”.

“We cannot know which phase of the crisis we are in," he said. "Are we maybe still in the middle? Are we in the beginning of the end leading to Armageddon? Or are we in the beginning of the end in the sense that we are accomplishing step-by-step elements that will take us out of the crisis?"

Some analysts see what is happening today as a flashback to the European sclerosis of the 1970s and '80s, before Maastricht, rapid enlargement, open frontiers and a common currency.

But the stakes are much higher today. “If things worked out negatively in this crisis, the effects of that would be much bigger. I think it probably is the worst crisis the European integration process has lived through,” Emmanouilidis said.

Hitting the streets

The magnitude the crisis and the austerity measures to follow has given the crisis a broader social dimension.

Leaders were unable to respond to the increasing lack of trust from their own people, with 2011 witnessing the fall of governments – including Greece, Italy, Spain, Slovenia, Slovakia, Denmark – and the rise of the “indignados” movement, which originated in the Puerta de Sol in Madrid.

Their marches went beyond Spain, hitting BrusselsItaly and influencing the "Occupy Wall Street" protests in New York. The Madrid protests reflected the rising level of frustration, despair and collective anger among the younger generation of Europeans over joblessness and political exclusion.

“It comes to the fundamental question of whether the sovereign crisis is part of a much larger crisis which affects all democracies,” Emmanouilidis said.

Annus ‘mirabilis’?

Meanwhile, the euro crisis has made the unthinkable become thinkable.

First, the euro-exit taboo has been broken. It’s the very foundations of the EU that are threatened and the effects of the crisis worsening and becoming unstoppable would be “enormous”, Emmanouilidis said.

But the one good sign arising from the crisis: awareness of how serious the EU crisis is.

One year ago, many of Europe's politicians were not aware of the potential implications of the crisis and still thought of it as being a peripheral one. That is no longer the case.

“Every great integration step in Europe came on the heels of a crisis. It's always been this way, and it could also be the solution today,” German Finance Minister Wolfgang Schäuble recently said in an interview with the weekly Der Spiegel.

Brussels political analyst Emmanouilidis says political leaders are recognising the need to act and to learn lessons. Leaders have taken steps stabilise the euro and strengthen economic governance. EU nations are cooperating at an economic level like never before.

"We are becoming more and more aware that mistakes have been committed and that you have to reassess things that have been done over the past 15-18 months and say: did we do any mistakes? Do we have to change anything?”

“The year 2010 was bad and we then thought, 2011 must be better. Well, it wasn’t better. So what 2012 will bring we do not know. What we do know is that this will be a long and bumpy road, with ups and downs, positive developments and setbacks,” Emmanouilidis said.

All hope is not lost for 2011.

Herman Van Rompuy, the European Council president, wrote on Facebook: "We will look back at what we achieved … it will be perceived by future historians as laying the foundations that ensured the crisis never recurred”.

Van Rompuy said that 2011 might seem like an "annus horribilis", but it would prove to be "an annus mirabilis".

Further Reading