Just when Europe thought the worst was over

European Commission President Jean Claude Juncker will give his annual state-of-the-union address on Tuesday, with the continent facing a choppy autumn. Storm clouds are gathering again, not only from the Brexit talks but also Italy’s euroskeptic coalition government and the populist surge in Eastern Europe, including Hungary and Poland. 

The contrast with last year’s state-of-the-union speech, when Juncker asserted that the “wind is back in Europe’s sails,” is striking. After a bad 2016 for the continent, not least the UK’s EU referendum, the European Commission president’s address in 2017 was upbeat following a spate of positive political and economic news.

Not only had eurozone economies recorded significantly improved growth but voters in France and the Netherlands had rejected far-right populists, lifting the political mood. Yet Juncker rightly warned in his speech that the good-news window “won’t stay open for ever.”

Fast forward to 2018 and the prescience of Juncker’s warning is clear. In June he was forced to admit that “the fragility of the EU is increasing. The cracks are growing in size,” as the summer European Council summit of presidents and prime ministers struggled to reach a deal on the migrant crisis after German Chancellor Angela Merkel’s political future was threatened.

In the fragile agreement that was reached, a number of EU countries agreed — on a voluntary basis — to take in migrants rescued from the Mediterranean. However, there was no agreement on refugee quotas, with several states holding out against language stating that this should be a compulsory, EU-wide responsibility.

This exposed divisions, with Germany and France pushing hard for a comprehensive way through the impasse while others, such as Hungary and Italy — which are run by populist leaders — were much more skeptical. This harder-line stance was exemplified by Hungary in June, following Prime Minister Viktor Orban’s landslide re-election in April, when the nation’s parliament passed laws to criminalize any individual or group offering help to asylum claimants.
These European tensions over asylum seekers and immigration coincide with the expected end game of the two-year Article 50 Brexit negotiations. With the exit process having consumed a massive amount of time in both London and Brussels, the EU Council meeting in October, and a potential emergency summit in November, could be decisive in determining whether an exit deal is agreed.

Beyond Brexit, the gathering storm highlights the fragility of the political situation across the continent, as shown by more than the election of Italy’s Euroskeptic coalition government, the weakening of Merkel’s government and the growing populist surge in eastern Europe.

Summing up the challenges, European Council President Donald Tusk remarked that they are perhaps “more dangerous than ever,” with three key threats “which have previously not occurred, at least not on such a scale.” According to him, the first two threats relate to the rise of anti-EU, nationalist sentiment across the continent, and the “state of mind of pro-European elites,” which Tusk fears are too subservient to “populist arguments, as well as doubting the fundamental values of liberal democracy.”

While Brexit exemplifies, from Tusk’s perspective, these challenges, the problem is by no means limited to the United Kingdom. Indeed, French President Emmanuel Macron admitted this year that even France, one of the two traditional motors of EU integration alongside Germany, would probably vote to leave the EU if the people were presented with a similar choice to that in the 2016 UK referendum.

As if these issues were not big enough, the third threat cited by Tusk is what he calls the new geopolitical reality, including an increasingly assertive Russia and instability in the Middle East and Africa that has driven the migration problems affecting Europe. Intensifying this is uncertainty created by Washington, with US President Donald Trump calling for more “Brexits” across the continent. While Trump is widely criticized across much of Europe, his message has gained traction with several governments. New Italian Prime Minister Giuseppe Conte, for instance, has emerged as his strongest supporter in Western Europe.

This political affinity is reflected in their alignment on key issues such as Russia and immigration, with Conte asserting that both “governments [in Rome and Washington] represent change; they were chosen ... to change the status quo.” While the Italian government has so far kept its powder dry in Brussels, the populist Five Star Movement wants Italy to leave the EU, while its coalition partner the League has called for a referendum on whether Italy should remain in the euro single currency area.

So while some in Brussels sensed last year that the Euroskeptic wave had peaked, the storm clouds are gathering again. Decisions taken in the coming months will help define the EU’s longer-term political and economic character in the face of several challenges, including Brexit.