European divisions ‘hardening’, warns German think tank

The refugee crisis and social hardship resulting from the eurozone crisis are putting the European project under unprecedented strain, with populism gaining ground in many EU countries – from Hungary, Poland, and France to the UK and Germany, warns the Bertelsmann Foundation, an eminent German think tank.

Northern European countries continue to top their OECD counterparts when it comes to “sustainable governance” indicators, according to an annual survey by the Bertelsmann Foundation, published today (18 August).

Overall, the Scandinavian countries achieved the best results, with Sweden in first position, followed by Switzerland and Germany, according to the survey which ranks countries according to a range of 136 economic, social and environmental sustainability indicators.

Nordic nations wavering

But the Nordic countries’ leading position is now beginning to waver, the survey warns. “Whereas for decades these nations were role models of equality and participation opportunities, income disparity has risen sharply in Denmark and Sweden over the past few years,” the Bertelsmann Foundation said in a statement.

Finland, for instance, has dropped in the ranking due to a weakening labour market. With an unemployment rate of 9.6%, the nation now ranks just 30th among the 41 OECD and EU countries. It has even fallen to 33rd place when it comes to youth unemployment.

The crisis-stricken countries of southern Europe fare the worst, with Greece featured last in the 41-nation ranking. Although the financial and economic crisis has passed its peak, social dislocation caused by years of austerity policies is still having a major impact, the study says.

“Long-term unemployment and child poverty are well into the double-digit percentage range in Southern European countries,” and the situation does not seem to get any better. In Spain, child poverty has risen yet again, to an alarming 23%, the study warns, compared to only 3.6% in Finland. One in five children in Greece is now affected by poverty.

Martin Schulz, the president of the European Parliament, said the EU must react urgently. “The fact that an increasing justice gap opens in Europe, we can not accept passively,” he told the German magazine Focus.

“We urgently must do something about the extremely high youth unemployment, because it destroys our societies from within,” Schulz said.

European project ‘failing’

These calls to actions are not followed up on the ground, however.

If anything, “divisions in the EU are also hardening given the biggest flow of refugees since World War II, and the European integration project is in danger of failing,” the Bertelsmann Foundation writes.

“Like Germany, Sweden has reached the limits of its intake capacity following the influx of refugees,” it warns.

Worryingly, finding political solutions to the numerous international challenges “is becoming increasingly difficult as a result of the mounting political polarisation in many nations,” the study says.

While climate change, terrorism, and migration flows are best tackled internationally, the political responses are still rooted at the nation-state level, damaging the trust and legitimacy of national governments.

This has favoured hardline political parties which have risen to power in places like Hungary and Poland, eroding democratic standards and press freedom along the way. In France, the far-right extremist party Front National is “enormously popular among voters” and in Germany, the new party Alternative für Deutschland (AfD) is “exploiting the refugee issue for purposes of a right-wing smear campaign”.

“In light of these developments, the EU faces the greatest test in its history and is miles away from finding mutual solutions,” the Bertelsmann Stiftung concludes.