In Europe, The Shifting Sands Of 2017 – Analysis

Elections across Europe will need to produce a new generation of leaders if its remapping is to be prevented.

By Rakesh Sood*

The Palazzo dei Conservatori at the Piazza del Campidoglio in Rome is certainly an impressive setting to celebrate a sixtieth birthday. Yet, for the 27 European Union (EU) leaders and the presidents of the European Council, the European Commission, the European Parliament, the European Council of Ministers, the European Central Bank and the Eurozone Finance Ministers who came together on 25 March to celebrate the founding of the EEC (European Economic Community) exactly 60 years ago, the mood was sombre. The strains of Beethoven’s “Ode to Joy”, the European anthem, failed to lighten it. There were more questions than answers; in fact questions posed by those not at the party.

British Prime Minister Theresa May had not been invited and was probably signing the formal letter invoking Brexit; two months earlier, US President Donald Trump in an interview had predicted the breakup of the EU, though a month later he attempted a course correction but still praised the UK for taking a “smart decision”; there was also Russian President Vladimir Putin’s increasing questioning of ‘liberal democracy’ and Turkish President Recep Tayyip Erdogan’s indications that Turkey may no longer be interested in pursuing its EU membership!

EEC to EU

From a homogenous group of six countries (Belgium, France, Germany, Italy, Luxembourg and the Netherlands) in 1957 that formed the EEC, today’s EU has 28 member countries. A milestone was the 1992 Maastricht Treaty which replaced the Community with the more ambitious EU and cleared the way for the introduction of the euro in 1999. Along the way, the EU was awarded the Nobel Peace prize in 2012.

Over the years, multiple European groupings have emerged, with overlapping memberships. The Eurozone consists of 19 out of the 28 members; the 31-member European Economic Area has the EU 28 together with Iceland, Liechtenstein and Norway; Schengen membership stands at 26 while NATO has over 20 European members. From being a cohesive whole, Europe is suddenly looking more fragmented. In 1957, the European experiment had been based on convergence and each time it faced a challenge, the clear solution was ‘more Europe’. Today, the new answers are being described as ‘a Europe at different speeds’ or ‘Europe with a variable geometry’ which struggles to accommodate the inevitable divergences among the increasingly heterogeneous 28 members.

From 1957 to 1992, the European experiment was a customs union leading to a common market. Cohesiveness was ensured by a commitment to democracy (by definition also ‘liberal’ because the idea of ‘illiberal democracy’ had not surfaced) with security outsourced to NATO and the US. The reunification of Germany, the collapse of the Soviet Union and the introduction of the euro during the 1990s led to the EU entering uncharted political territory with the Maastricht Treaty. Ideas of a Common Foreign and Security Policy and a Common Security and Defence Policy emerged and with that came the creation of the position of the High Representative of the EU in 1999. Henry Kissinger had famously remarked: Who do I call if I want to call Europe? There was now a number but the EU High Representative’s has remained a vexing and often frustrating job with major member states preferring to maintain and manage their own foreign and defence policies.

With the continuing economic strains posed by the 2008 economic crisis, political pressures generated by a more assertive Russia under Mr. Putin, the growth of jihadi extremism globally and radicalisation of Muslim minorities in Europe, and the migration challenge catalysed by Western interventions in Libya and now Syria, the balance between the political and economic compacts in Europe has begun to fray. Ageing populations and disruptive technologies add to the complexity.

European Parliament members, though elected directly, have been singularly unsuccessful in convincing their constituencies of the virtues of the European project. Meanwhile, national politics has seen a resurgence of nationalism. An anti-immigrant sentiment has taken hold, elites stand discredited and populism has pushed countries away from regionalism and globalisation. Sentiment has turned against the EU and its institutions and therefore ‘more Europe’ is no longer the acceptable answer. Brexit was just the first warning sign in 2016.

A crucial French election

Now, 2017 is a crucial year with elections in key European states. Last month, there was a palpable sense of relief when the Dutch Prime Minister Mark Rutte managed to keep his liberal party, VVD (The People’s Party for Freedom and Democracy), in the lead in the national elections, despite a slide from 41 seats to 33, in a House of 150. In contrast, Geert Wilders of the PVV (Party for Freedom) managed to improve his standing from 15 to 20 on an anti-European, anti-Muslim platform. There had been real concern that Mr. Wilders would ride the Brexit-Trump anti-establishment wave. Many believe that Mr. Rutte’s hardline in banning Turkish Ministers to campaign among the Turkish community for the Turkish referendum on 16 April helped him get a second wind.

Later this year, elections are due in France and Germany, followed by Italy and Sweden in 2018. Of these, the French election is the most crucial where Marine Le Pen of the National Front and Emmanuel Macron appear to have cleared the first round on April 23 in a closely contested two-stage election. Republican candidate François Fillon’s campaign faltered since disclosures that he had paid large sums to his wife from public funds for ‘working’ as his Parliamentary Secretary. This is not an uncommon practice among French politicians but since Mr. Fillon had campaigned as Mr. Clean, his image took a hit and his ratings plummeted from 30% to 20%. His loss has been Emmanuel Macron’s gain.

A 39-year-old former investment banker with Rothschild, Mr. Macron joined President Hollande’s cabinet for two years as the Economy and Industry Minister before quitting last summer to launch his own political party, En Marche (On the Move). He is seen as pro-business, pro-Europe and a social liberal. At present, he is running neck and neck in the opinion polls with Ms. Le Pen, who is expected to engage in sharper personal attacks on Mr. Macron in the run up to the final round on May 7. For Ms. Le Pen and her support base, Mr. Macron is the perfect target, part of the global elite, more at home with bankers and business leaders and disconnected with the workers and farmers. A Le Pen victory would push the EU into a mortal crisis as she has promised to quit the Schengen regime and take France out of the euro. Mr. Macron’s challenge is that he is seen as a political neophyte with a political party that is less than a year old when the country is gripped with self doubt, insecurity and uncertainty!

Elections in Europe

In Germany, Chancellor Angela Merkel will be seeking a fourth term in September. Though currently in the lead, she faces a strong challenger in Social Democrat candidate Martin Schulz. The disruptor however is the new AfD (Alternative for Germany) led by Frauke Petry who describes herself as a ‘nationalist conservative’. AfD was set up in 2013 and since then has gained representation in 10 out of 16 state parliaments. Ms. Petry is a Eurosceptic and seeks to reassert German identity while being anti-Islam and denying climate change.

Normally, Italian elections should take place in early 2018 but following Prime Minister Matteo Renzi’s stepping down earlier, these could be brought forward. The populist leader of the Five Star Movement, Beppe Grillo, is also pushing for early elections as his party is currently neck and neck with Mr. Renzi’s Democratic Party in the opinion polls with a near 30% rating. Together with two anti-Europe groups — Berlusconi’s Forza Italia and Matteo Salvini’s Lega Nord — the Eurosceptic lobby crosses 55%. This is hardly surprising given that Italy has not seen any growth in per capita GDP since the euro was established in 1999.

Sweden, which will go to the polls next year, is also facing the ‘nationalist Eurosceptic’ malaise. Sweden Democrats, led by Jimmie Akesson entered parliament for the first time in 2010 and by 2014, had emerged as the third largest party with 13% of the popular vote on the anti-immigrant and right wing populist platform.

Whither EU

Meanwhile Hungarian leader Viktor Orbán extols the virtues of ‘illiberal democracy’ and Turkey has lost interest in pursuing EU membership. EU’s deal with Turkey, a year ago to curb the Syrian refugee influx, has been holding but European criticism of Mr. Erdogan’s increasingly authoritarian moves has led him to threaten retaliation and he could well reopen the tap, causing another migration crisis in an uncertain year.

Mr. Trump has already asked NATO’s European members to hike their defence budgets to the long promised target of 2% of their GDP, currently met by Poland and the UK. At present, this is unlikely and only exposes fault lines that Mr. Putin will be glad to exploit.

Today, analysts agree that the expansion of both the EU and the Eurozone in the last decade was too rapid but the clock cannot be turned back. Creating exceptions to keep the experiment going merely creates an illusion of unity. The 2017 elections will need to produce a new generation of European leaders like Jean Monnet and Robert Schuman if a remapping of Europe is to be prevented.

This article originally appeared in The Hindu.

Observer Research Foundation

Observer Research Foundation

ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.

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