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24/07/2016

Europe’s terrible start to 2016

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Europe’s terrible start to 2016

According to Judy Dempsey, Angela Merkel and David Cameron will be the two European leaders that are most capable of changing the dynamics of Europe in 2016.

[German Embassy London/Flickr]

The divisions in the EU are different and more difficult to overcome than the ones faced by the bloc in the past and pose a significant threat as we start 2016, writes Judy Dempsey.

Judy Dempsey is a non-resident senior associate at Carnegie Europe, and Editor in Chief of Strategic Europe.

Open borders in Europe are all but dead. During the first week of 2016, several EU countries imposed border controls and checks at train stations and other crossings. The bridge linking Denmark and Sweden is no longer an open gateway to the Nordic region after a new Swedish law came into force demanding that travellers from Denmark show identity documents.

Other countries have built fences to keep out the refugees fleeing the wars in Syria, Iraq and Afghanistan. Germany’s open-door policy, which Chancellor Angela Merkel has defended, is under threat too. The reported assault of many women by groups of men, allegedly of North African or Arab backgrounds, at the New Year’s Eve celebrations in Cologne will vindicate those who believe Merkel’s generosity has been misguided.

The influx of refugees has been manna for populist movements and Eurosceptics. They want to see an end to the Schengen system, which did away with most border controls across the EU, even though reinstating such controls would have serious economic consequences for the free movement of labour and goods.

This populism is being translated into something that is eroding the very fabric of the EU. It is a patriotism based on a nationalist agenda that contradicts everything the EU was supposed to represent. Plans by Poland’s governing conservative Law and Justice party to introduce a media law that will promote patriotic values is symptomatic of the deep crisis now affecting Europe.

“Europe is divided, vulnerable, and maximally insecure. Governments are going their own way, a trend most obvious in new alignments of Europe’s three major powers in new (and opposing) directions,” according to the Top Risks 2016 report, which has just been published by Eurasia Group, a political risk consultancy.

Divisions are nothing new for the EU. Indeed, it is remarkable that despite its differences, the bloc has so far managed to remain united in keeping the sanctions that were imposed on Russia for its March 2014 annexation of Crimea.

But today’s divisions are different and much more difficult to overcome than previous ones. This is because they represent a profound lack of confidence by publics across Europe in the EU and in the merits of globalisation. This lack of confidence coincides with the dangerous and persistent waning of the transatlantic relationship. Both trends are undermining—indeed damaging—the liberal Western order that emerged after 1945. That is the greatest threat facing Europe as it enters 2016.

This liberal order of openness, of vibrant democracies, and of market economies was anchored on the transatlantic relationship. But today, it shows few signs of being defended by most EU governments. With the United States closing shop for the 2016 presidential election campaign and with US interest in Europe so weak, EU leaders will continue to pursue their own national agendas.

Two European leaders could change the dynamics of these trends: David Cameron and Angela Merkel.

Cameron will hold a referendum by 2017 at the latest on whether Britain should remain in the EU. Despite the virulently anti-EU stance of the British tabloid press, the one good thing about the pending referendum is that it is generating a debate about Europe’s future direction. This is long overdue.

Since Cameron has already said he will not serve a third term as prime minister after the next general election in 2020, what has he to lose by going all out to keep Britain inside the EU? This is a huge chance for Britain to save the EU. To quit the bloc would lead to Europe’s permanent and rapid decline.

Merkel is in a very different and difficult situation. Since the beginning of the euro crisis in 2008, she has led the EU through financial turmoil. Along with her finance minister, Wolfgang Schäuble, she has—so far—saved the Eurozone. She steered all EU countries into imposing sanctions on Russia.

But her ability to push for a strong, open, and confident Europe has been jeopardised by her open-door policy toward refugees. Several EU countries openly resent and criticise Merkel for her refugee policy and for the way she has tried to persuade other EU countries to share the burden of providing safety to the refugees. More fundamentally, Merkel’s EU partners resent her leadership, which has been accentuated because the EU has been so weak in crisis management.

What this means is that Germany, paradoxically, cannot really lead the EU out of its current trough. The national and nationalist agendas are running too deep for Berlin to push for a stronger Europe. It is hard to name any EU leader who would call for more integration—or even a two-speed Europe that would salvage the EU.

The one thing that could rescue the EU and the post-1945 liberal order is the proposed Transatlantic Trade and Investment Partnership, or TTIP. This deal could lead to a new economic and social transatlantic alliance to set clear and transparent trading rules. Yet even that is becoming hostage to European movements that believe Europe’s social model will be undermined and Europe will play second fiddle to the United States. But at the moment, Europe is hardly playing at all.

This opinion piece was originally published by Carnegie Europe.