A century ago, Europe faced tough challenges with the rise of far-right nationalism, economic meltdown and militarism. It took Europe more than four decades and two world wars to respond to those challenges. And the response was political, economic and security integration in a continent that spent most of its history in deadly wars. But more than political and economic integration, what saved Europe and the rest of the world from another world war, was a set of values. Those values helped shape the world and its institutions as we know them today, from the EU to the UN, NATO, World Bank and IMF among others. Today, Europe faces the same questions and challenges. And the set of values that helped save it and the world are being severely tested, if not threatened. 2019 promises more of the same with the expected economic slowdown, the continuing challenge of Brexit and the threat of populism in the heart of Europe after Italian elections produced a populist government composed of parties far from the European mainstream. Also, the gradual fading of German Chancellor Angela Merkel, mounting problems facing French President Emmanuel Macron and the degrading power of British Prime Minister Theresa May are adding to the challenges. However, despite all the problems it could be said that when Europe looks back on 2018, the verdict will be sympathetic. The continent faced up to the threat of a trade war threatened by President Donald Trump and managed to avert it. The EU also managed to protect its interests by refusing to bow to American pressure to scupper the Iranian nuclear deal. Brexit negotiations were handled with delicacy, finding balance between protecting EU interests and trying not to alienate the British public by appearing vengeful.
STANDING ALONE: Europe stood firm in the face of the new political landscape that has been emerging since 2015 and threatened the European project altogether. But it stood alone in 2018 as the rift between America's Trump and Europe continues widening. On the 100th anniversary of Armistice Day, which marked the end of the World War I, celebrated in a grand ceremony hosted by French President Macron in Paris last November, the rift was so wide it was almost embarrassing. The gathering, which was supposed to reflect on one of the most dreadful and horrific events in human experience, did not show world unity. If anything, it did the contrary. It showed disunity and a crack in the current international order which, ironically, was born from the womb of the two world wars. There were more differences and divergences than points of consensus on the core issues of concern to the world today. The dark shadows of the past were looming. US President Donald Trump, in particular, looked very much alone, standing on the outskirts of the world stage and isolated from long time US allies. There was restlessness and uneasiness in the air. In his Armistice speech, the French leader openly rebuked Trump's “America First” agenda. “Nationalism is a betrayal of patriotism,” Macron told world leaders. “By saying, ‘Our interests first, who cares about the others,' we erase what a nation holds dearest, what gives it life, what gives it grace, and what is essential: its moral values,” Macron added, warning of “old demons” resurging, heralding chaos. “Will today be a symbol of lasting peace or a last moment of unity before the world falls into more disorder?” the French president asked, adding: “It depends solely on us.” In her short speech, German Chancellor Angela Merkel followed Macron's steps, emphasising that, “if isolation wasn't the solution a hundred years ago, how can it be today, in such an interconnected world?” Later the French president said that Europe needed an EU army because it could no longer rely on the United States as a partner. Macron also talked about the need to strengthen the euro's position as a global reference currency — not as a challenge to the US dollar but as an alternative for purposes of stability. Trump slammed Macron's idea as “very insulting”. With the end of 2018, Europe can say that it stood against Trump on important issues, from Iran to climate change. However, with Trump's trade wars against the EU and China showing no signs of a slowdown, there is an almost inevitable clash ahead between Trump's administration and Europe. Also, many experts expect a slowdown in the world economy in 2019 because of the new cold war over information technology. Trump's recent crusade against China's telecom giant Huawei is dividing Europe. US Secretary of State Mike Pompeo recently accused China of hacking the Marriott Hotel chain and stealing information on up to 500 million people, which exposed fault-lines between US allies in Europe, as well as the intelligence community or the “Five Eyes”. Germany, among other European countries, wanted proof that Huawei poses a security risk. The heating conflict shows how the US administration is driving allies to take sides in a global dispute and measure their economic interests – which are deeply entrenched with Chinese vendors — against the value of a security alliance with Washington. The battle for Europe SUPPORT FOR THE EU STILL HIGH: Nonetheless, it's not all doom and gloom. The emergence of French President Macron as a powerful defender of the European project and the fourth-term victory of Merkel put a brake on an anti-EU trend represented by Brexit. Also, despite Brexit, or maybe because of Brexit, the European appetite for integration remain strong. There is optimism for the EU project even with only three months to go before the UK leaves the EU, and despite the vague nature of the future Britain-EU relationship. A study by the International Business Report showed that “firms are taking it in their stride. A sizeable proportion of eurozone businesses believe that the membership structure of the EU will change post-Brexit. Nearly half (43 per cent) believe it will lead to a two-tier EU membership model. But only five per cent think it will lead to the EU being dissolved. One in four (26 per cent) believe Brexit will have no impact on the EU.” The report continues: “Despite the UK's imminent departure from the EU, the political powers that be still see integration as critical to the bloc's future. In May 2018, the European Commission published its draft budget for 2021-27. It describes the document as ‘a budget that unites and does not divide.' (…) For European businesses, integration remains firmly on the agenda too. Across the eurozone 65 per cent of businesses would like to see further EU economic integration, up from 63 per cent last year. However, just 35 per cent want further political integration. This down from 44 per cent last year. Germany is the only country where more than half of business leaders (63 per cent) want to see further political integration. Outside the eurozone, Poland's overwhelming backing for greater economic EU integration stands out. 82 per cent of firms are in favour.”
OPTIMISM IN THE FACE OF ADVERSITY: Many existential issues such as climate change, Brexit, the relationship with Russia, the Iran nuclear deal, the threat of North Korea, the UN role and the future of NATO will remain on the agenda in the coming months. And with Trump talking about nationalism, protectionism and building borders as a good thing, it is not even clear if he is willing to lead the world towards a common agenda. So, Europe must act to protect its interests. It is all to play for in the European Parliament elections in May 2019. A very strong showing by populist forces in the European Parliament, where no faction enjoys an absolute majority, could put them in a position to complicate or even block the formation of a new commission. Key elections issues include jobs, meaning economic policy, the nature of the internal market and the scope of free trade. Security will also be key, including social policy and asylum and refugee policies. With Merkel's leadership fading, Macron facing unprecedented domestic challenges, Brexit in chaos and the right-wing government in Italy moving towards an economic time-bomb because of its desire to abandon the austerity measures, the result of the coming elections cannot be overstated. The biggest challenge Europe faces now is the democratic deficit — reducing the gap between the millions of ordinary citizens and the elite in Brussels. This gulf — real or perceived — is proving a capital test for European mainstream parties that are losing to right-wing parties, some of which are new on the scene. As open and pluralistic as the EU project likes to represent itself as, there is no doubt that to survive adversity, Europe needs to look at the last century and learn a few lessons.
