Europe’s outlook 2018: Anybody’s guess
by Ferry de Kerckhove
Diplomat & International Canada
December 18, 2017
There are two factors shaping Europe’s outlook for the coming year: what comes out of the Trump world and what comes out of, or into, Europe. Which of the exogenous variables will be the most defining is anyone’s guess. Migrants, Brexit and regional separatism will all play into the unfolding drama of 2018. To that end, 10 predictions follow.
1. The migrants
Europe will continue to endure the consequences of the refugee crisis stemming from the catastrophic 2011 decision by NATO to intervene in Libya and, while numbers may abate, intra-European co-operation will improve only slightly.
While the aftermath of the Arab Spring brought a steady flow of refugees to Europe, it was in 2014 that the increase in arrivals from Libya started rupturing the unity of the European approach to managing the refugee crisis. This eventually led to an agreement with Turkey whereby the latter would be paid for keeping the bulk of refugees from the Middle East, thus allowing a selection process by individual European countries on some form of a quota system that was rejected by most Eastern European illiberal leaders. Germany, for its part, will continue to bravely absorb its million-plus newcomers, hoping for as few terrorist acts as possible. Thus, most efforts in 2018 will focus on establishing an integrated European immigration policy — a real Sisyphus rock. A return to stronger economic growth could, however, make a difference.
2. European political trends
The populist right is not going away and 2018 will see continuing waves of populism. While stopped in France by a political system with two rounds of voting and surprisingly so in the Netherlands by a brilliant campaign by the eventual winner, Mark Rutte, the right ate a big chunk of Angela Merkel’s stature and it once again threatens Italy. It has smartly created an ugly parallel between the increase in migrant flows, terrorism, the rise of Islamic fundamentalism and membership in the European Union. This is unlikely to change as long as European governments, despite their countries’ diversities, continue to emphasize “assimilation” as opposed to “integration,” thus creating resentment among immigrants who were violently uprooted from their historical environment and asked to renounce the past identities they carried with them on their perilous journey. On the other hand, assimilation policies seldom satisfy the far right either, which prefers no migrants to botched assimilation.
The Brexit process will not achieve the aims set by Britain, but its impact risks deepening the various divides in Europe. The Brexit crisis has to be considered from two vantage points: its economic impact and its consequences for European unity. On the former, the OECD is as clear as it gets: GDP growth in Britain will barely reach 1.6 per cent in 2017 and will slip to just 1 per cent in 2018, with the unemployment rate climbing to 5.3 per cent. It also predicts that British government will fail to “secure a comprehensive free-trade agreement with the rest of the EU by 2019 in a development that would mean a destructive ‘cliff-edge‘ Brexit for U.K.,“ according to the OECD. But that is only part of the story. The harshness of EU authorities towards Britain in negotiations reflects their concern over the impact of separation on the economic stability and confidence of the amputated group as well as the long-term bearing it will have on the European unification process. Admittedly, Britain’s absence from the Eurozone makes the withdrawal less politically sensitive. But, despite the joint efforts and commitment to the European political project of French President Emmanuel Macron and Germany’s Merkel, supported feebly by the politically erratic Italian regime, Brexit has only deepened the divide between the original EU grouping — born of a “never again” mantra through a deep, abiding commitment to a political construct fostered by economic integration — and the Eastern European group, which chose the EU as the best alternative to the Soviet yoke. The latter, however, had no real concept or commitment towards the supranational concept, as they had just regained their national freedoms. Illiberalism is the consequence of this rejection and 2018 is very unlikely to change any of this.
4. Regional separatism
The trend towards separatism will endure, but only Catalonia represents a real risk. And even its separation is unlikely to happen. The segue to Brexit, of course, is the growing regional separatism that started with Scotland’s failed — for now — independence referendum. Catalonia is not a new phenomenon as evidenced by the extensive contact between various Catalan governments and Quebec, particularly when the Parti Québécois was in power.
There are several reasons underpinning these movements. Often the economic dimension is not the most important one, although in times of economic slowdown, it adds fuel to a cultural and identity crisis in the face of globalization. A growing climate of uncertainty then leads to questioning of the fundamental relationship between the rulers and the ruled and the former’s ability to provide answers to problems whose duration exceeds the length of an election. Will 2018 see at least a legitimate process for Catalonia, as Canada eventually implemented for Quebec? Right now, it is objectively clear that the referendum was neither legitimate nor an accurate reflection of the public will. But the way the central government of Madrid handles the crisis could either precipitate a surge in the independence movement or it will ensure a smooth transition towards a solution that maintains the unity of the country with greater autonomy for the regions. European unity behind Prime Minister Mariano Rajoy will endure as long as the situation doesn’t become unduly violent, in a way reminiscent for many Spaniards of their horrific civil war. This seems unlikely as Spain considers a constitutional change that will allow for independence referendums — the Spanish version of our Clarity Law.
5. The “European idea” unravels
The spectre of EU disintegration appears to loom, but there are good reasons to believe the tide will be reversed. The key question is simple: Can the Macron-Merkel team reverse the tide? Beyond the immediate issue of forming a government after her reduced majority following the September elections, Merkel has partially ceded the leadership of Europe to her French partner, who, just two days after the German election, delivered a 90-minute speech at La Sorbonne dedicated to the European dream. The Economist summarized well the quandary for Macron: “Whether Mr. Macron can restore France to centre-stage in the EU after a decade in the chorus depends not just on his plans for Europe, but also on his success at home, reforming a country long seen as unreformable.” This year will be critical for France and for Macron’s commitment to “force a new alignment along a different fault line, one that lies between those sympathetic to an open society and those tempted by nationalism, Euroscepticism and identity politics,” The Economist continues. One of the most telling comments on Macron came from a friend of his who told the French publication l’Opinion that Macron’s “roots are on the progressive centre-left” and they “reconciled themselves to the market economy.” The irony of the French is the existential contradiction between their embrace of capitalism and an unabashed dislike for the free market.
Were France and Germany to join forces on the key components of Macron’s massive program for a “sovereign, united and democratic Europe,” 2018 could be a better year despite all the issues alluded to above. But the more ambitious it is — European defence and security, fiscal and social convergence, expansion of the Erasmus program for studying and training abroad, innovation, sustainable development, creating a true economic and monetary power and more — the greater the risk of disillusionment.
6. 2018 Italian elections
The right is back and former prime minister Silvio Berlusconi is not dead. A general election is due early next year and the recent decisive victory of Gov. Nello Musumeci, a member of Berlusconi’s Forza Italia, underscores the continued popularity of Berlusconi and the renewed strength of the right in Italy. While Berlusconi will never again regain power — he was banned for life for tax fraud — his party will do well next year because he managed to bring together different streams of the right, thus possibly rekindling domination by the man known as “Il Cavaliere” in Italian politics. This makes it all the more likely that the other parties’ divisions are unlikely to heal in 2018.
7. Ukrainian stalemate
There will be no progress here as U.S. President Donald Trump will be increasingly preoccupied with retaining the presidency and Russian President Vladimir Putin will focus on his own re-election. As a frozen conflict in the heart of Eastern Europe, mainly manned by various mercenary forces in the pay of Russia, very little is happening. Negotiations resumed for a while; Putin allowed for UN Peacekeepers in Eastern Ukraine — a seemingly odd proposal that further internationalizes the conflict, unless it was designed to diminish the role of the real player. Very rapidly things went “south” and there were talks of a break in diplomatic relations. Meanwhile, the west prides itself in achieving NATO reinforcement and assurances in the Baltic region. Yet, as Washington-based national security analyst Anthony Cordesman of Chicago points out, “political masters do not seem ready to address the reality that today’s Russia is asserting itself in increasingly threatening ways.”
8. Poland’s prediction
A risky prediction for 2018: President Andrzej Duda will succeed in altering the Jaroslaw Kaczynski-led Law and Justice Party’s illiberalist agenda. Reforms proposed firing members of the Supreme Court and politicizing the justice system. Duda’s success in this will depend on the president ensuring a successful passing and implementation of the legislation countering the government’s power to remove and name judges at will.
9. Theresa May’s tenuous survival
There are strong possibilities that British Prime Minister Theresa May will be ousted before the end of 2018. The Sunday Times newspaper recently indicated that 40 Conservative MPs were ready to call for her resignation. This goes beyond the Brexit negotiations. Resentment against her for having needlessly gambled on the elections, and Boris “aka Brutus” Johnson’s constant behind-the-scenes undermining of her moves, are but two of the many sources of a potential “palace coup” against her. Just eight more opposing MPs would put her into a minority situation and bring her down in a leadership challenge. With two ministers having recently resigned, her government is looking increasingly frail. May’s personal fragility, stemming from her failed gamble on Brexit, was underscored at the last Conservative Party conference. Despite earning the party’s support, her performance left attendees quizzical.
10. The Trump effect
Foreign policy uncertainty caused by Trump and occurring outside or on the margins of the European theatre could affect any progress in Europe’s integration. Four crisis points could be particularly significant: Trump’s bombast on North Korea does not play well in the major capitals of Europe. His non-certification of the Iranian nuclear deal and his commitment to impose further sanctions on Iran will be resisted by the Europeans as long as it does not affect its more than $700 billion in trade with the U.S. To this double quandary, one should add the confusion and/or policy dearth on the part of the U.S. administration towards the Middle East, which is critical for Europe’s management of the refugee crisis and stability in the Mediterranean. The more the U.S. withdraws from the international stage, the more Europe is left alone in handling the complex relationship with Russia and the Ukraine crisis. The latter is unlikely to see much change.
With maybe too many uncertainties to swallow in one single scoop, it may be useful to restate strongly that, all in all, there are some real hopes (to put it in the words of Herman Van Rompuy, the first president of the European Council) of giving a place to all in the space created by the EU single market, but there’s also a real risk of seeing these hopes shattered, in part by excessive ambitions and needless or avoidable American-driven additional uncertainties.
Ferry de Kerckhove is a retired Canadian diplomat who had postings in Iran, NATO, Moscow, Islamabad, Jakarta and Cairo, the latter three as head of mission. Since his retirement, he has been teaching at the University of Ottawa and at Glendon College in Toronto.