This article is part of the World Economic Forum's Geostrategy platform
Sixty years after the Signing of the Treaty of Rome, which established the European Economic Community, Europe now faces its greatest challenges, and possibly its sharpest turning point, since the Second World War, argue the authors of Europe in 2022: Alternative Futures.
The analysis by Mathew Burrows and Frances Burwell of The Atlantic Council believe the possibilities for Europe range from a rebirth to disintegration. What they argue is highly unlikely is “a strong leap toward greater EU-wide integration – as was sometimes the outcome of earlier crises”.
The report was written before the French Presidential elections. And while the dramatic effects of a victory by Marine Le Pen’s Front National were not realised, the underlying challenges facing Europe remain.
Putting the analysis into its current context, co-writer Matthew Burrows said, “As in the US, distrust of establishment parties and politicians is at an all-time high in Europe. The elections in US, Germany, France and the UK showed a deep dissatisfaction with traditional political leadership. Disaffection happened even though the Western economies have all been improving.
“Publics are worried about the future. Some polling has shown that Americans and Europeans don’t think their children or grandchildren will have a better life. That’s a terrible indictment of the current system in the West.
“There are widespread fears that in the Fourth Industrial Revolution, emerging technologies such as robotics and artificial intelligence will take away jobs. There has also a growing cultural foreboding about US or Europe no longer being the same—too many immigrants is a big theme underlying such concerns, particularly among conservative voters.
Burrows added, “There’s little trust in political or economic institutions. Resentments about bankers doing much better out of the 2008 financial crisis are also still around. My key worry is that political leaders and parties in US or Europe won’t be able to calm those fears. There’s a lack of thinking in political circles across US and Europe about how to renew politics and respond to all the rapid changes and voters sense it.”
Europe—and especially the European Union (EU)— will face challenges that push it into entirely new directions, the authors believe.
Several of those challenges are already clear: the unresolved financial problems, as Greece continues to struggle with its debt crisis and Italy and France face financial challenges. The effects of Brexit, the rise of political extremism and the influx of large numbers refugees, all happening against a background instability on Europe’s borders add to the mix.
Even if it manages to muddle through these crises,” the authors write, “by 2022 it be a different place, with altered institutions and policies.”
The question is whether these changes will happen gradually, moving Europe towards greater integration and stability, or whether the crises the bloc has faced have been a fundamental shock to the European system, and require fundamental change in response.
What happens in Europe between now and 2022 is also of serious strategic importance to the US, which has seen its European allies as “partners of first resort”, say the authors; this has either been through NATO or coalitions of the willing. Economically, too, Europe is the US’s biggest trading and investment partner.
The authors identify a number of megatrends, including a rapidly ageing population, lagging economic growth, and a shrinking part of the global economy; security challenges from the east and the south, as well as a serious increase in terrorism.
Key domestic uncertainties surround economic reform, the control of external borders and the integration of migrants. Elsewhere, questions remain over the UK’s ongoing relationship with the EU, whether extremist on the Left or Right will gain power.
External uncertainties include the question of whether the US will continue to engage with Europe, the western Balkans will return to instability, whether Turkey will move closer to Russia, and what relationship Europe itself will develop with Russia.
The authors outline five potential scenarios, based on the interaction between the megatrends facing Europe and the key variables.
1) A revitalized Europe in which current proposals designed to grow the European economy lead to revitalization and growing public support for the EU.
2) A slow-growth Europe with reform efforts stalling and growth slipping; youth unemployment and inequality remains high in some countries, migrants are poorly integrated, and greater fractures develop between core and periphery states in the EU.
3) Nationalists in charge? By 2022, right-wing nationalist parties have won national elections. Cross-border cooperation among these governments has grown, allowing them to challenge the EU principle of freedom of movement, and key element of the single market and the Eurozone.
4) Russia launches an offensive. It renews aggressive support of Ukrainian separatists, and takes advantage of riots in Kalinigrad to threaten Baltic NATO members. Europe struggles to remain united in its approach to its eastern neighbour.
5) The US disengages from Europe. It remains a NATO member, but rarely engages with the EU, preferring to deal with individual states, and, especially with the UK, despite Brexit. Simultaneously, Russia exerts greater influence in Europe, while Turkey moves farther away.
For almost 60 years, the story of Europe has been one of increasing expansion and closer union. The authors argue that, while this process has not faded entirely, new economic and geopolitical drivers make it hard for Europe to continue as it has done without major adaptations. As Europe has lagged other regions economically, they believe, its social contract is under threat.
In the age of globalization, governments are blamed for not ensuring the same quality of life citizens have come to expect, the report says. If the EU is to survive intact (minus the UK), it must be more responsive to the growing insecurity surrounding it and growing in the lives of citizens.
Europe in 2022: Alternative Futures, Mathew Burrows and Frances G. Burwell