Gauging the Many Risks Europe Faces

Gauging the Many Risks Europe Faces
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Andy Langenkamp is a global policy analyst for ECR Research.

Luxembourg's minister of foreign affairs has warned that Europe may only have a couple of months left to prevent the European Union's collapse. He even suggested that we could witness a European war in our times. And that was before the Paris attacks. The tragedy in France shows once again the increasing importance of non-state actors on the international stage. Apart from the human tragedy, the regrettable result will be a stronger trend toward isolationism, nationalism, and populism.

The European Union has until now provided Europe with the necessary ingredients to muddle through an assortment of crises. However, to be successful at muddling through, nations need to be able to strike political compromises. It is becoming increasingly difficult to come up with grand bargains that politicians are willing to take home and sell to their voters. Such bargains will be indispensable to address the challenges the Union is currently facing, including the risks of terrorism, the refugee crisis, Putin's assertiveness, an incomplete monetary union, and populism.

Turbulent closure of 2015

To get a sense of which risks Europe faces, it helps to categorise these risks into three timeframes: the short-term, the medium-term (running through 2016) and the long-term risks (the coming years).

Apart from the obvious danger of further terror attacks in Europe, there are some other events and developments to watch in what remains of 2015. The Spanish people will vote on Dec. 20. If Prime Minister Mariano Rajoy stays on, a nasty brawl between the Catalonia region and Madrid is bound to unnerve financial markets.

Spain's neighbor Portugal is also in choppy waters. The leftist opposition has ousted the minority center-right government, which was in charge for only 12 days following the most recent elections. It remains to be seen whether the new left-wing coalition will commit to much-needed reforms.

A third event to watch will be the UN climate summit. After the dismal results of previous summits, the world needs to agree on more binding agreements this time round. The summit will offer Europe a chance to show the world that it is able to act as one. But with nations such as Poland refusing to give up their dependence on coal, it will not be easy to come up with a cohesive stance.

A failed summit could sour the EU summit at the end of December. Leaders will try to find agreement on issues such as how to address the terror threat, the future of the Schengen area, renewing sanctions against Russia, and keeping the United Kingdom within the EU. Sanctions will most likely be kept in place. As for Britain, there is little chance that leaders will strike a deal as early as December. Talks will probably drag on into 2016. When it comes to Schengen and the migrant crisis, recent developments don't bode well. The resettlement scheme agreed during a previous summit is already falling apart.

Finally, regional elections are scheduled for France in December. Marine Le Pen's already favorable prospects will most likely have been given a lift after the events in Paris. Le Pen, the leader of the far-right National Front party, will probably win the presidency of France's northernmost region, strengthening her position as a presidential candidate in 2017.

Merkel to trip?

In 2016, Slovakia, Ireland, and Romania are among the nations that will hold parliamentary elections. These will be closely monitored for further signs of a European electorate that is fed up with the traditional parties and opts for politicians who favor the outer boundaries of the political spectrum.

On a lower level, in Germany, five states will hold elections in 2016. They will also be seen as proxy votes on the government of Chancellor Angela Merkel. The chancellor's approval ratings have already dipped as a result of the refugee crisis, and she's facing opposition within her coalition. If her Christian Democratic Union loses in the regional votes, Merkel will have to deal with more internal attacks. Until recently, everybody was assuming she would carry on governing until the next election without facing any struggles. For the first time, analysts now dare to speculate the chancellor may trip along the way.

The migrant crisis (and of course acts of terrorism inside Germany) would be the obvious factor that could bring Merkel down. I very much doubt anyone can stem the flow of desperate people trying to make it into Europe, and terrorists sneaking into the Continent alongside them. Europe simply lacks the conviction, the popular support, and the resources needed to stop the war in Syria, tame the Taliban in Afghanistan, and turn around the war in Iraq. Nor will the United States and others carry out such a task. This means the refugee crisis will continue to cause security, political, social, moral, and economic problems that will probably be dealt with more on an ad-hoc basis than by implementing a plan that relocates migrants already in Europe, secures external borders, and addresses the root causes of the migrant flows. 

There are three other things to monitor closely in the year ahead. First of all, the United Kingdom could vote on its EU membership as soon as 2016. I still root for a victory for the In camp.

Furthermore, the new Polish government must show if it will affirm the views of pessimists who predict Poland will become more authoritarian and Euroskeptic - perhaps taking its cues from hardline Polish Prime Minister Viktor Orban - and institute irresponsible left-wing economic policies such as lowering the pension age and nationalizing companies. Things may not be quite as bad as they seem. The ruling party is Atlanticist and anti-Russian. In order to get the backing of Western Europe in riding a hard line towards the Kremlin, Poland must be prepared to compromise. But do keep in mind that the ruling party's puppet master -  Jarolsaw KaczyƄski - can always be counted on for a sour surprise.

Finally, Greece is causing problems again. Within a couple of months the Greek government has managed to run weeks behind schedule on implementing agreed reforms. Therefore, I cannot rule out that the Greek matter will again become a major European problem.

A continent out of balance

Some of the risks for 2017 and beyond are already visible. Europe still has to figure out how to deal with German dominance. It was telling that Merkel was basically acting as the head of EU foreign policy in negotiations with Russia, Ukraine, and Turkey. The European power configuration and the Berlin-Paris axis are completely out of kilter, and this has unnerved many politicians. The European Union could stumble if Europe doesn't find a way to accommodate the leading and important economic and political roles Berlin has taken over the last few years. This can only be achieved if other countries act as counterbalance. It is thus of the upmost importance that Britain remains an EU member and that France stages an economic resurgence. The French are making headway with reforms of the labor market and other areas, but I doubt these measures will return France to an equal footing with Germany.

A second long-term risk for Europe is the growing gap between the EU institutions and the European peoples. The popularity of the Union is dwindling, and Euroskeptic populism is on the rise. The measure of this matter will be taken during the May 2017 French presidential elections, which Le Pen has a real chance of winning. If Le Pen makes the Élysée Palace her home, it will become even more difficult to reform the eurozone.

The final longer-term risk is the instability at the borders of the European Union, and the associated dangers that were so tragically shown in Paris. The European Union is surrounded by chaos, violence, and volatility: in Libya, Egypt, Syria, Turkey, the former Yugoslav republics, Ukraine, and Russia. These nations will demand lots of attention, money, political capital, and sometimes even military efforts from the European Union. The Union's foreign policy hasn't much impressed, and it will probably not amount to much in the years ahead either.

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