Crisis creates a stronger Europe

POLITICAL FUTURES - Ian Bremmer - The Philippine Star

The European Union has faced a series of emergencies in recent years. The 2008 global financial meltdown that began in America triggered a European sovereign debt crisis that pitted richer EU members against poorer ones. Unrest in the Middle East provoked a migrant crisis that fueled anti-immigrant populism inside many EU countries and exacerbated divisions between Brussels and eastern members like Hungary and Poland. Then came Brexit. The election of Donald Trump as US president created deep uncertainty in Europe about Washington’s reliability as Europe’s security partner. The pandemic then inflicted economic damage across the continent, and now Russia’s invasion of Ukraine has generated another, and larger, wave of refugees, an energy crisis and fear of a new East-West confrontation. The election of new governments led by parties of the far right in Sweden and then Italy, the EU’s third largest economy, have again raised questions about the EU’s strength and resilience.

Yet, the European Union is stronger than ever.

How is this possible? Jean Monnet, one of the EU’s earliest visionaries and architects, once predicted that “Europe will be built in crisis and will be the result of the solutions.” He was right. A crisis can (sometimes) create opportunities for positive change that would not have been possible without the need for a collective response. In important ways, COVID-19 and Russia’s invasion of Ukraine have done exactly that.

First, there is Europe’s response to the pandemic. The financial and sovereign debt crises, migrant crisis and Brexit all helped persuade EU leaders that economic inequality breeds resentment, and that the resulting anger stokes populism. With support from all 27 EU member-states, European governments agreed in 2020 on a multibillion-euro recovery package that included funding for both COVID response and the reinforcement of safety net protections for workers and businesses.

These financial packages also include stimulus for investment in green technologies and regulations that require non-EU countries that want to trade with Europe to align with European technology standards or face higher taxes, boosting European influence in global regulation of new technologies and environmental protection. There was also a 1,074 billion-euro EU budget passed for 2021–2027 that gave Brussels the means to distribute substantial sums that member-governments badly needed.

It will be years before all of the money is distributed, but the unanimous emergency response showed the value of shared sacrifice at a time when country-first populism had thrown the EU’s future into question.

COVID has also shifted the balance of power in the EU’s battle with Euro-skeptic member-governments. Hungary’s Viktor Orban, a skilled politician who has built his reputation on confrontation with the EU, won a landslide victory in April. It might appear that victory would help him resist EU demands to comply with the EU rules on democracy and rule of law he has flouted for several years.

But the European Commission has found a way to use COVID relief funds to bring Orban in line. Last month, it formally recommended that 7.5-billion euros intended for Hungary be withheld until Orban’s government offers a list of demanded reforms. Hungary already faces high prices, a weak currency, an energy crisis and its budget deficit is now far higher than government had forecasted. Add 14.9 billion euros in much-needed grants and loans from the EU’s COVID Recovery Fund, and Brussels now has Orban’s full attention.

The same political dynamic exists in Italy. Giorgia Meloni, leader of the Brothers of Italy Party and her country’s next prime minister, has waged “culture war” against EU protections for minority and migrant rights in her country. But Italy’s economic vulnerability in a time of economic hardship will ensure that reassurances about respect for the EU and solid support from her incoming government for NATO and Ukraine won’t be enough to win her unconditional support in Brussels.

Italy, with the EU’s second-highest debt-to-GDP, needs 200-billion euros in COVID Recovery funds from the European Commission, and it needs the European Central Bank to continue to buy its debt. As in Hungary, feeble economic growth, stubbornly high inflation and looming energy shortages leave Italy’s government in need of EU good will, and it’s the pandemic that has given the EU the economic and political leverage to demand fiscal and other reforms.

Russia’s attack on Ukraine and Vladimir Putin’s threats against NATO and European governments have rallied the EU in a similarly dramatic way. They have created an urgent unity in Brussels’ relations with Washington that has not existed in decades. It has strengthened NATO by bringing in capable new members (Finland and Sweden), persuading reluctant EU governments (particularly Germany) to spend much more on defense and brought member Poland closer to the EU consensus on many issues by proving each side’s value to the other.

Perhaps most importantly, Europe’s greatest security vulnerability has long been its dependence on Russia for energy supplies. Putin has now proven to European leaders that Russia can no longer be considered even a reliable trade partner, and the EU has undertaken the enormously complex challenge of ending that dependence. In the short term, that means an exceptionally tough couple of years for European business and citizens. But in the long run, it will strengthen European security and accelerate investment in green technologies. None of this was possible before Feb. 24. All of it is the direct result of Putin’s war.

Europe has historic challenges ahead. Bolstering its defenses, redesigning its energy architecture, managing high inflation, boosting meager growth, continuing to support Ukraine and managing an increasingly erratic nuclear-armed neighbor to the East will test Europe’s newfound strength for years to come. But the Union’s ability not just to weather crises but to use them to strengthen European institutions is the most successful example of successful cross-border cooperation of the still-young 21st century.

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Ian Bremmer is the president of Eurasia Group and GZERO Media and author The Power of Crisis.


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