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Optimistic About Europe? Not so fast

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Migrants cross the border into Hungary from Serbia. Source: Paul Hackett/London News Pictures

The sharp slowdown in the migrant crisis since 2015, Emmanuel Macron’s defeat of anti-EU populist Marine Le Pen in France earlier this year, and the likely re-election of Germany’s Angela Merkel have reinvigorated optimism that Europe has survived yet another round of challenges. Not so fast. There will be many more problems to manage in coming months, and the current confidence is unlikely to last long.

First, the entrance onto the stage of the youthful, energetic Mr. Macron has made France the envy of others across Europe hungry for a new generation of leaders in their own countries. But the most remarkable outcome of France’s elections this year was the scale of defeat for the center-right and center-left parties that have dominated French politics for decades. Pro- or anti-EU, French voters want change, and Mr. Macron must deliver it with a legislature in which 70 percent of deputies are serving in government for the first time. If inexperience undermines his ability to revitalize France’s economy and energize its labor market all those fresh faces will be much less welcome.

More broadly, Mr. Macron needs to put France’s fiscal house in order before skeptical Germans will work with him toward EU fiscal union, banking union, and other needed EU reforms. The new president quickly lost 10 percentage points from his early approval rating as citizens look past the easy smile and confident speeches toward cuts in social spending. And as his predecessors discovered, labor reform, no matter how skillfully presented, draws labor unions into the streets.

Then there is Italy, a country that remains in political stalemate. The next elections, likely in the first half of 2018, are increasingly likely to produce either another fragmented government that can’t advance much-needed political and economic reforms or a Five Star Movement-led government that’s openly hostile to the EU.

The migrant story continues to reshape Italy’s political landscape. An EU deal with Turkey has sharply limited the flow of desperate people across the Aegean toward Greece, but arrivals in Italy, mainly by boat from Libya, increased 20 percent from 2015 to 2016. For the first half of this year, just 9,000 migrants reached Greece, and 4,000 arrived in Spain, while Italy has now taken in more than 90,000 people. Italian anger is rising as the French and Austrian governments seem more interested in tightening their borders with Italy than with sharing even a small part of its burdens. An EU quota system which mandates that each EU member take in refugees to ease the pressure on others is not being enforced.

In particular, the Visegrad countries of Eastern Europe — Poland, Hungary, the Czech Republic and Slovakia — were expected to accept about 11,000 refugees as part of this system. Slovakia and the Czech Republic have taken in 28 people, as of this writing, while Poland and Hungary have accepted zero. This is not the only source of defiance from the East. Hungary’s Viktor Orbán has fully embraced the term “illiberal democrat” as he battles to consolidate political control in that country, and Poland’s right-wing government is still working on legislation that would allow legislators to fire the country’s judges and replace them with political cronies. The EU has threatened to provide less money for these countries in the next EU budget, but nothing credible has yet been done to force them to comply with EU rules.

There is also the quest of Turkey’s president to give himself Putin-like powers.

If all that weren’t enough to worry about, there is also the quest of Turkey’s president, Recep Tayyip Erdogan, to give himself Putin-like powers in his country and the problems that creates between Turkey and the EU. Mr. Erdogan has discovered that public hostility toward Europe boosts his popularity at home, and a re-election bid next year is sure to create more friction with Germany and others. It could also jeopardize Mr. Erdogan’s deal with the EU that keeps huge numbers of refugees in Turkey in exchange for European cash and various political promises. That deal will probably hold, because it works for both sides. If it doesn’t, Europe could face another migrant crisis, reviving populist anger across the continent.

Add troubles with Trump, provocations from Putin, and the high-stakes complexities of Brexit negotiations. Ms. Merkel remains a force for stability, and Mr. Macron may energize reform in France and the EU more broadly, but it’s clear that EU leaders will have their hands full for the rest of this year and beyond.

 

To contact the author: gastautor@handelsblatt.com.

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