Can European unity handle a populist challenge?
The European Union (EU) is facing one of its gravest challenges since it was founded as a coal and steel community in 1951. Great Britain’s decision to leave the EU in March 2019 is causing consternation as governments and businesses scramble to prepare for “Brexit,” unsure of its terms or even whether a formal agreement will be reached beforehand by London and Brussels. The EU also is coping with a trade dispute with the United States growing out of President Trump’s imposition of tariffs on imported steel and aluminum and his threat to add duties to European car imports. It is unclear whether a tentative truce worked out in July will hold. In addition, the EU is facing internal strains caused by nationalist and populist political parties pressing for greater limits on immigration, particularly for those seeking asylum. While European leaders reached a temporary accord on strengthening their external borders, they have yet to win agreement about where asylum centers will be established to screen migrants or how to stop refugees from taking to the seas to gain entry into the EU.
Key takeaways include:
One-third of all financial institutions in the United Kingdom are planning or considering relocating some operations to other European cities because of Brexit.
The International Monetary Fund has cut its growth projections for the 19 countries that use the euro currency because of uncertainty over the EU’s future.
A political backlash against migrants has weakened the authority of German Chancellor Angela Merkel, a leading voice supporting the liberal international order.
Resources for Further Study
Baldwin, Richard, ed., “Brexit Beckons: Thinking Ahead by Leading Economists,” CEPR Press, 2016. Sixteen leading economists look at Brexit and its financial implications for the United Kingdom and the other countries in the European Union (EU).
Castells, Manuel, et al., eds., “Europe’s Crises,” Polity, 2018. Economists, sociologists and political scientists discuss how the EU became embroiled in multiple crises and what can be done to resolve them.
Drozdiak, William, “Fractured Continent: Europe’s Crises and the Fate of the West,” W.W. Norton & Co., 2017. A veteran Washington Post foreign correspondent looks at the forces pulling Europe apart in the 21st century.
Piris, Jean-Claude, “The Future of Europe: Towards a Two-Speed EU?” Cambridge University Press, 2012. A legal scholar who helped draft the EU’s structure concludes that the current organization is unworkable and proposes an inner core of countries that move faster toward political and economic union.
Golod, Vassili, “Austria’s Kurz wants ‘axis of willing’ against illegal migration,” Politico.com, June 13, 2018, https://tinyurl.com/
Parker, George, “Brexit chaos puts Conservatives on the edge of a breakdown,” Financial Times, July 14, 2018, https://tinyurl.com/
Roubini, Nouriel, and Brunello Rosa, “Italy’s Slow-Motion Euro Train Wreck,” Project Syndicate, June 1, 2018, https://tinyurl.com/
Reports and Studies
“The Effect of Imports of Steel on the National Security,” U.S. Department of Commerce, Jan. 11, 2018, https://tinyurl.com/
“The Future Relationship between the United Kingdom and the European Union,” Controller of Her Majesty’s Stationery Office, July 2018, https://tinyurl.com/
“United Kingdom: Staff Concluding Statement of the 2017 Article IV Mission,” International Monetary Fund, Dec. 20, 2017, https://tinyurl.com/
Blair, Tony, “The ‘In-Betweener’ Solution Is the Worst Of All Worlds: Parliament Should Reject It,” Tony Blair Institute for Global Change, July 15, 2018, https://tinyurl.com/
The Next Step
“Italy to block naval vessels carrying migrants from docking: Interior Minister Matteo Salvini,” Deutsche Welle, July 9, 2018, https://tinyurl.com/
“Migration from EU to UK lowest for four years, ONS figures show,” BBC, July 16, 2018, https://tinyurl.com/
Hovet, Jason, and Robert Muller, “Migration concerns will dominate EU elections next year, Czech leader says,” Reuters, Aug. 1, 2018, https://tinyurl.com/
“Brexit: EU ‘ready to improve’ Irish Border proposal – Barnier,” The Irish Times, Aug. 2, 2018, https://tinyurl.com/
“Michel Barnier questions Theresa May’s Brexit White Paper,” BBC, July 20, 2018, https://tinyurl.com/
“Post-Brexit butter and cheese restrictions possible even with trade deal, report warns,” The Caterer, July 18, 2018, https://tinyurl.com/
Rue de la Charité 33, 1210 Saint-Josse-ten-Noode, Belgium
+32 2 227 4210
Brussels-based think tank specializing in European economic issues.
Department for Exiting the European Union
9 Downing St., London, SW1A 2AS, United Kingdom
British government department negotiating the United Kingdom’s exit from the European Union, with a website posting many documents related to proposed Brexit rules.
Directorate-General for Communication. European Commission, Brussels, Belgium
+32 2 299 11 11
Civil servants who carry out the daily business of the European Union, including Brexit, European finance, migration and others issues.
ifo Center for International Economics
Poschingerstraße 5, 81679 Münich, Germany
Germany’s leading research center focusing on international trade.
International Monetary Fund
700 19th St., N.W., Washington, DC 20431
Global financial group that has detailed analysis of economic trends by region and country.
Organisation of Economic Co-operation and Development
2, rue André Pascal 75775, Paris, France
+33 1 45 24 82 00
Intergovernmental organization that tracks economic developments in its 35 developed country members.
Tony Blair Institute for Global Change
50 Broadway, London, SW1H 0BL Britain
Think tank founded by former British Prime Minister Tony Blair has economic analysis and white papers on British policy.