The questions that could reshape a worried Europe in 2017

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(Europe Today Tuesday 31 January 2017)

BREXIT, TURKEY'S REFUGEES, GREECE AND ITALY'S DEBT, AND ELECTIONS

The questions that could reshape a worried Europe in 2017

A Supreme Court ruling that Ms Theresa May needs Parliament’s approval to begin the Brexit negotiations is adding to complications that have created massive uncertainties in the UK. Photo: Reuters

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By Rick Gladstone -

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Published: 4:00 AM, January 31, 2017

Europe is facing multiple tribulations in 2017, engulfed in uncertainties over terrorism, borders, migration, economics and US President Donald Trump’s new America First message booming from across the Atlantic.

“It’s not the first time Europe has been challenged by crisis,” said Ms Anna-Lena Hogenauer, a researcher at the Institute of Political Science at the University of Luxembourg.

“(But) there is definitely a combination of crises.”

Here are some of the potentially disruptive issues and events looming for the year that could reshape — or at least deepen — the fractures in the European Union, a 28-nation bloc of more than a half-billion people and the world’s largest single free-trade zone.

Will Brexit cause instability?

Negotiations for Britain’s exit from the European Union, known as Brexit, the outcome of a referendum in June last year, could officially start by the end of March — a self-imposed deadline set by Prime Minister Theresa May. But the run-up to those negotiations — further complicated by a Supreme Court ruling that Ms May needs Parliament’s approval to begin the process — has created enormous uncertainties. They include how European Union citizens residing in Britain — and the British citizens residing in other European Union countries — will work and live if they cannot freely traverse borders as they do now.

Big banks and other multinational companies with operations in London and elsewhere in Britain are not awaiting the outcome of the negotiations, expected to last two years, that will determine the scope of the country’s changed status. Instead, they are making contingency plans to move thousands of jobs elsewhere. Other European Union members are eager to get those jobs.

Their leaders also have suggested that Britain must be penalised economically to discourage further defections from the bloc.

Britain’s decision also threatens to alter its geography and possibly stoke political instability.

Scotland and Northern Ireland had wanted to stay within the EU and may now move to leave Britain. A new referendum on Scottish independence — reprising a measure that was defeated in 2014 — is considered likely. Unrest in Northern Ireland could resume if the border with Ireland, a EU member, is restricted.

Mr Guy Verhofstadt, the EU’s negotiator for Britain’s exit, wrote in The Guardian on Jan 18 that “Brexit will be a sad, surreal and exhausting process”.

Will Turkey turn away from Europe?

Turkey has been negotiating to become a EU member for more than a decade, but that prospect has turned more doubtful, partly because of the authoritarian actions of the Turkish President Recep Tayyip Erdogan, particularly since a failed coup attempt in July.

Increasingly exasperated with the EU, Mr Erdogan has suggested that he may hold a referendum in Turkey this year on whether to withdraw its membership application.

Mr Erdogan has also suggested that he may seek to restore the death penalty in Turkey, a step other European leaders say would disqualify the country from joining the EU.

Nonetheless, European officials are loath to suspend the negotiations for fear that Mr Erdogan will scrap an agreement to restrict the flow of migrants and refugees from Turkey into Europe, an exodus that has placed extraordinary strains on the Continent and helped incite nationalist and populist anger.

Can Greece find relief?

The country that came to symbolise Europe’s economic travails a few years ago has receded from the headlines somewhat, obscured by Brexit, fears of terrorist attacks in European cities and coming elections in the Netherlands, France and Germany. But Greece’s economy remains anaemic and in need of more debt relief.

Despite three bailouts in five years, poverty rates are increasing and the unemployment rate is Europe’s highest.

Prime Minister Alexis Tsipras of the leftist Syriza Party, who rose to power in 2015 on his defiance of Greece’s creditors and threat to leave the European Union’s single-currency zone, is sagging in the polls, raising the possibility of political turbulence and new elections.

Negotiations for further restructuring of Greece’s debts, involving Germany and the International Monetary Fund (IMF), also have encountered difficulties.

“If the IMF and Germany cannot find a way out, this is a serious problem,” said Mr Dimitrios Argyroulis, a political economics scholar at the University of Sheffield.

Can Italy’s banks stay afloat?

The chronically troubled economy of Italy, the EU’s fourth-largest, has aroused growing concern as possibly the next Greek-style debt crisis.

The main reason is the weakness of Italy’s big banks, which are carrying hundreds of billions of dollars’ worth of bad loans.

They are reluctant to lend more money, which is precisely what Italy needs to stimulate its economy.

Italy’s debt levels also have irked Germany, Europe’s strongest economy, where leaders are reluctant to help finance any bailout.

“The current developments do not bode well and point to the possibility of repeating the Greece disaster on a much larger scale,” said Geopolitical Futures, a forecasting firm, in a Jan 20 posting on its website.

Will Catalonia leave Spain?

The regional Parliament of Spain’s semi-autonomous Catalonia region voted in November 2015 to begin a process to achieve independence this year — an outcome the Spanish government has vowed to block. But the secessionists, buoyed by the Brexit referendum, say the momentum of nationalist movements in Europe is on their side. Whether they will succeed remains unclear at best.

Will the United States stand with Europe?

The EU and United States have closely coordinated their regimen of economic sanctions imposed on Russia in 2014, a response to Russia’s annexation of the Crimean Peninsula and military actions in eastern Ukraine. But Mr Trump has injected uncertainty into Europe over a unified stand towards Russia, suggesting he wants to ease or terminate the sanctions.

Mr Trump, whose amity towards Russia is a political issue in the US, also has criticised Nato, asserting that the alliance is obsolete — a description Russian officials have welcomed.

While Mr Trump’s subordinates have sought to reassure EU leaders that the US remains a reliable ally, doubts have been planted.

Mr Frank-Walter Steinmeier, the foreign minister of Germany at the time Mr Trump made those remarks, said they had “caused astonishment”.

Will nationalists triumph elsewhere?

Emboldened by the momentum of Brexit and Mr Trump, nationalist politicians espousing hostility towards the European Union and Muslim immigrants have made strong gains in campaigns for coming elections in three European countries, including the two largest.

In the Netherlands, where a national vote is set for March 15, populist lawmaker Geert Wilders, who wants to slash immigration and follow Britain out of the EU, is doing well in the polls.

Other Dutch politicians, including Prime Minister Mark Rutte, have ruled out working with Mr Wilders and his Party for Freedom and Democracy, which most likely means Mr Wilders will not be the next prime minister.

But in a sign of Mr Wilders’ influence, Mr Rutte has taken his own hard-right turn, warning immigrants against behaviour that offends the “silent majority”.

In France, where presidential elections are set for April 23 with a runoff between the two top candidates May 7, the rise of the extreme right has been a dominant theme.

Ms Marine Le Pen, leader of the National Front, has said she hopes to replicate Mr Trump’s success. She supports a referendum on EU membership and new border controls.

Germany holds federal elections Sept 24, which will determine the future of Chancellor Angela Merkel. But her positions on European unity, open borders and generosity towards refugees have seriously weakened her popularity.

Mr Trump mocked and insulted her during his campaign, describing his Democratic adversary Hillary Clinton as “America’s Merkel” and called the German leader’s refugee policy “insane”.

At the same time, Germany’s biggest political story is the rapid ascent of the far-right Alternative for Germany party, which has evoked memories of the Nazis as it campaigns on denunciations of Ms Merkel, the euro, immigration and Islam.

Even if Ms Merkel survives to win a fourth term as chancellor, political analysts see her as a weakened figure, and at the worst possible time.

“Europe has never needed a strong Merkel more,” said Mr Ian Bremmer, founder and president of the Eurasia Group, a political risk consultant firm in Washington, in a recent assessment of the year’s most dangerous risks. “In 2017, she’ll be unavailable for the role.” THE NEW YORK TIMES

ABOUT THE AUTHOR:

Rick Gladstone is an editor on The New York Times Foreign Desk.