27 November 2015

Gauging the Many Risks Europe Faces


Posted by Andy Langenkamp on November 24, 2015

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.

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