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Home Opinion The impending change in Europe
EU • Election • Future

The impending change in Europe

Olaf Cramme - 07 March 2014

May’s European elections and the change of Commission might grab the headlines in 2014, but the course for the EU’s future will be set elsewhere

For many observers of the European Union, particularly those in Brussels, 2014 seems to be a landmark year for two principle reasons: the first is the European elections which will take place in May. The second is the change of the European Commission in the autumn. The excitement grows if one believes that the EP election will also influence the choice of the new Commission President, given that for the first time ever Euro parties have actually nominated one or several leading candidates to take the helm. Whether or not the personalisation of EU politics will make any difference in the end remains to be seen.

On one level, both these events matter of course. Current poll ratings across Europe suggest that Eurosceptic parties and populists of all shades will do rather well, possibly taking up a third of the seats in the new parliament. This is likely to trigger a fresh round of intense debate about the declining trust in the European project and the widening gap between the “elites” and significant parts of the electorates they’ve been appointed to represent. A new European Commission, in turn, will find its future policy orientation under  careful scrutiny – whether or not it will move to increase regulation in important areas of the Single Market, from consumer protection and the service sector to environmental, social or financial matters. Expectations for a new reform agenda are indeed high.

On another level, however, Europe faces much bigger questions. Contrary to the current mood, especially among market participants, the EU is far from being a stable entity and finds itself locked into a path of renewed convergence. It is true that the many changes to the system of EU governance, the financial rescue packages for troubling Eurozone members, and above all the decisive action of the European Central Bank have brought a period of calm and much needed breathing space, but the big decisions with regard to the continent’s future have merely been postponed. At some point, possibly in the course of 2014, they will need addressing – the ramifications of which could severely impact on the shape of Europe.  Three dimensions stand out.

The first relates to the internal balance within EMU. Northern creditor countries have drawn firm lines after three years of firefighting: any form of debt mutualisation has been ruled out as a means to create a level playing field between members of the Eurozone; debt burdens, however high in countries like Greece, Portugal or Italy, are to be paid off as opposed to reducing them through either inflation, default of debt forgiveness; and most critically, adjustment is supposed to happen almost exclusively through price deflation in the debtor countries, who thus face many more years of austerity. For the moment, this set of choices seems to be broadly accepted by EU leaders – the question is: for how long?  

Whatever one thinks of the present EMU arrangement, it is hard to see that such a framework can guarantee a long-term peaceful coexistence of 18 or more economies that differ fundamentally in their potential, state of development and direction of travel. When the common currency was created, one of its core objectives was to accelerate convergence between member states. The opposite is happening: living standards are diverging and political tensions rising. None of this proves that monetary union has been an irresponsible or even doomed project from the start. But the design remains flawed and must ultimately be corrected if the euro is to become the currency of all EU members in the future (as stated in the Treaties). The longer this uncertainty persists, the more likely it is that some countries will eventually turn their back on EMU.

Secondly, talking and hoping for the European project to disintegrate seems no longer like an extreme viewpoint held by a tiny minority, but it is more and more an accepted view in certain countries. For decades, Europe basically knew only one way: that of closer cooperation and integration between its nations, not only within the EU but also between the EU and those who preferred not to join. In recent years, however, this dynamics has visibly changed, most notably in Britain and Switzerland.

The former seems to be at a crossroads: Prime Minister David Cameron has committed his party to an in/out referendum by 2017, something which neither the Liberal Democrats nor the Labour Party reject on principle.  Although it remains to be seen whether such a referendum will actually take place in the next few years, the political and popular mood clearly points to a change in relationship between London and Brussels. Likewise, the Swiss government will now have to revisit its bilateral agreements with the EU after its citizens voted in favour of imposing blanket migrant quotas. To what extent this affects Switzerland’s wider access to the Single Market has become a major concern. The bottom line is that important precedents are being created.  Demands for “re-negotiation” might well emerge in other places too.

Finally, Europe’s sphere of influence is undergoing profound change – and the EU looks largely perplexed by recent developments.  When former Commission President Romano Prodi launched the ‘Wider Europe’ programme in 2002, he dreamt of an “arc of stability” stretching from the Mediterranean to Europe’s Far East. The reality today could not be more different: be it Ukraine, Egypt, or Libya, instability and trouble are the defining trends on Europe’s borders. So far, the Euro crisis served as a convenient excuse for the absence of any clear strategy on how to deal changes in the EU neighbourhood. The obvious question is whether evasion remains an option for much longer – something which an increasing number of people would certainly deny.

If the European election and the change of Commission might grab the headlines in 2014, the course for the EU’s future will be set elsewhere.  Europe remains in flux given the many push-and-pull factors in play. There is simply no shared blueprint, let alone determinism, for a Union or EMU of a specific number of countries. Whether we end up with a two-tier, multi-speed or Europe à la carte remains everyone’s guess at present. For countries with European ambitions, such as Ukraine and Turkey, this means seeking new partners and allies in its quest to redefine the institutional framework of Europe. It’s still all to play for.

Olaf Cramme is director of Policy Network and a visiting fellow at the European Institute of the London School of Economics

This article was first published in the March issue of the Turkish journal Usak Analíst.

This is a contribution to Policy Network's work on The Future of the EU.

Tags: Olaf Cramme , Opinion , EU , European Union , Europe , Election , Left , Centre , Right , Centre left , Centre right , Centre-left , Centre-right , Euroscepticism , European Parliament , EP , European Commission , EMU , European Monetary Union , Election , Populism , Euroscepticism , Reform , Crisis , Eurocrisis , Euro Crisis ,

Comments

kushal Kumar
24 July 2014 03:11

CONCLUSION :- " Downward trend in world economy is likely to be in mild form during November, 2014 to April, 2015, to grow somewhat intense during May, 2015 to October, 2015, becomes harsh during November, 2015 to July, 2016. Such areas of life as minerals and metals, foodcrops, energy resources , defence and security of nations are likely to bear the brunt of these trends. Collective wisdom in decision making, communication systems, aviation industry, and the cinema , music and TV industries are also , in addition, likely to be touched by these trends. Countries or regions whose names begin with the letters B , E , EU, N, O, P, U or V may need to implement multilevel approach to challenges during this period". This is the substance or salient feature of my article - " Stressful times ahead for world economy in 2015 and 2016" published online on June 2, this year with astrologyweekly.

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The Policy Network Observatory promotes critical debate and reflection on progressive politics. It is centre-left orientated but determinedly challenges social democracy. It is pro-European but restlessly questions EU institutions and practices.

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