Post-Brexit referendum and Trump, Europe underwent a crisis of confidence: populist parties seemed to be on the rise, and there was much debate over which nation would be “next out” of the EU.
Eleven months after the shock of Brexit, the countries of the EU still face deep-rooted problems: aging populations, high youth unemployment, the integration of migrants, and distrust of EU institutions, for starters. But with several key elections since Brexit and the economic outlook improving, the Union’s future is looking brighter.
In the words of one prominent German politician: “If you’d offered us this situation on June 24 last year [the day after the Brexit vote] I think we would have said ‘Yes, thanks.’”
Here are six reasons why talk of Europe’s demise appear to have been exaggerated.
1. Recent election results
Voters in the Netherlands and now France have turned their backs on insurgent, Eurosceptic populism.
Geert Wilders in the Netherlands and Marine Le Pen in France celebrated Brexit as a revolt against global elites – but neither managed to ride the populist wave to power.
Wilders’ party gained five seats in the Dutch elections in March, but that was not enough to force a role for his Dutch Freedom Party in a coalition government.
Le Pen at least made it to the second round of the French presidential contest but never looked like beating a young and inexperienced rival.
2. The Economy
The European economy, which limped from recession to anemia after the 2008 financial crisis, is set for three years of healthy if unspectacular growth.
The European Commission expects all the EU’s member states to grow over the 2016-2018 period, thanks in part to reforms that have helped to reduce unemployment and encourage investment.
The Commission expects growth of 1.8% this year and next. That may not be great, but certainly better than before.
3. Greece and Italy
The saga of the Greek debt has loomed over Europe for nearly a decade, but last week the country’s coalition government, led by the left-wing Syriza government, agreed further reforms in exchange for the next tranche of bail-out funds.
There’s a long way to go: the Greek economy is still only three-quarters the size it was 10 years ago, and its debt is a staggering 180% of GDP. But it is still in the EU and the eurozone.
Another potentially destabilizing factor for the euro – the weakness of Italy’s banks – survived the resignation of Matteo Renzi as Italian Prime Minister after he lost December’s referendum.
4. Refugee crisis
The surge of more than a million would-be refugees in 2015, about half of them fleeing the Syrian civil war, threatened to tear Europe apart, exposing divisions about burden-sharing and polarizing attitudes towards asylum.
More recent EU members in central Europe, such as Slovakia and Hungary, railed against accepting the new arrivals, while Germany and Sweden took the lead in welcoming the refugees.
The migrant issue, when combined with Islamist terror attacks, has been one of the populist parties’ most rewarding rallying calls.
The influx in 2016 was still significant – some 388,000 according to the International Organization for Migration – but it was not the toxic political issue that dominated the previous year.
A very sharp decline in the first quarter of this year has kept migration out of the headlines – for now. Despite other diplomatic rows between EU nations and Turkey, the joint agreement to stem migration via the eastern Mediterranean appears to be holding.
5. Trump
The US President once called himself “Mr Brexit,” but the wave of anger against elites that he surfed to power has morphed since his inauguration into a more conciliatory attitude towards NATO and the EU.
European officials could hardly believe it when Trump told Reuters in February: “The EU, I’m totally in favor of it. I think it’s wonderful. If they’re happy, I’m in favor of it.”
Officials in Brussels now see a more pragmatic White House with Washington’s political “establishment” reasserting itself.
There is also relief in European capitals that the much-hyped Trump-Putin “bromance” – which could have left Europe vulnerable – has not blossomed.
6. Brexit
The Brexit process appears to have galvanized Europe. Theresa May’s hardening stance – she’s vowed to be “bloody difficult” in negotiations – has prompted a feeling that Britain is overplaying its hand.
The election approaching in the UK may be political theater, but Merkel et al know they hold some serious bargaining chips. Some 44% of British exports go to EU countries, while just 8% of the EU’s exports head to the UK.
It would be a huge mistake to suggest that the populist forces that exploded onto the European stage are spent. They remain strong in several member states, including Poland, Hungary and Italy, where the Five Star movement, which has pledged a referendum on Italy’s membership of the eurozone, continues to lead in the polls.
Yes, she was defeated, but Le Pen still won the votes of nearly 11 million French citizens.
And, waiting in the wings, the Kremlin offers an alternative center of gravity to several governments and parties in the Union that have fallen out of love with liberal Europe.
But the EU has held the line and now, in Emmanuel Macron and Angela Merkel, it has two leaders whose pro-European credentials are rock solid. Should Merkel win in September, their tenures will run concurrently.
The next hurdle for Macron’s neophyte political movement: parliamentary elections next month, because what the rest of Europe really doesn’t want is a French President who can’t get anything done.
