It is that time of the year again – the time that pundits like to gaze into their crystal ball and divine a few predictions for the year to come. Never one to be left out, let me offer a few here.
• First, for the first year since 2005, the EU will not face a legitimacy crisis. There will be no constitutions to discuss, and no referenda results to be picked over by the press. The day to day business of Brussels will turn to unedifying ‘guns and butter’ topics. Well, I don’t know about guns. But butter, certainly. And thanks to the Icelandics, maybe fish too.
• There will not be a eurozone member debt default, but driven by sovereign debt concerns, the rising run of the euro, which has lasted from 2002 to date, will finally come to an end. During the coming year the single currency will break below 1.40 against the dollar, perhaps even plumbing towards its 1.20 purchasing-power-parity value.
• The economic tendency of the euro’s first decade, where ‘peripheral’ members (Ireland, Greece, Spain, Finland) grew rapidly and ‘core Europe’ (France, Italy, Germany) stagnated, will likewise come to an end. Consumer and corporate deleveraging, not to mention government austerity, will lead to painful year-on-year adjustment in the peripheral countries while core Europe surprises to the upside.
• As governments set about implementing austerity measures, eurozone economic governance will become more contentious. There are still no agreed upon rules to replace the defunct Stability and Growth Pact. I suspect this will lead to a smouldering conflict between the ECB (backed by Germany and the Netherlands), who wish to maintain a strong currency so as to keep building its long-term credibility as a global reserve currency, and a motley group of politicians (possibly a coalition of southern European states spearheaded by Nicolas Sarkozy) who wish to have a weaker currency and weaker fiscal rules so as to promote domestic demand and export-led growth.
• When the first Council meetings are chaired by Van Rompuy next year and when Ashton starts shuttling off for mediations in Moscow or Tehran, their roles will actually be taken seriously. Currently they are written off as irrelevant. But they have not actually begun. So I suspect that by the end of 2010, journalists will at least have learnt how to pronounce ‘Van Rompuy’ correctly (and perhaps decided whether to call the new High Representative ‘Baroness’, ‘Lady’, or simply ‘Cathy’).
• The looming prospect of budgetary cuts across all EU member states will lead countries to take defence cooperation more seriously — if only as a means of ‘doing more’ (or rather, the same) ‘with less’.
• EU integration in the western Balkans may make a surprise breakthrough after years of stasis. Macedonia, Serbia and Croatia will all be on track for eventual EU entry, leading to hopes the whole region may eventually follow suit.
• Europe will be ‘on track’ for a transcontinental high-speed rail network. With the completion of the Italian and the Spanish high-speed networks, only two remaining links (Turin-Lyon and Barcelona-Montpellier, both expected sometime in the next decade, though construction at least may begin 2010) stand in the way of a full north-south network running from Madrid to London, and back down again from Amsterdam to Naples.
• Finally, Brussels had better enjoy the ‘business-as-usual’ atmosphere while it lasts. The most likely origin of the next institutional crisis, which I predict not for 2010 but shortly thereafter: the UK, where an incoming Conservative government this May will be torn between moderates who wish to remain members of the EU and sceptics who are firmly set on the exit door. These divisions will remain hidden as long as the new government’s honeymoon lasts, but break out not long afterwards – in particular when it becomes clear that à la carte membership is not on the menu. Those who doubt this need only recall the cantankerous atmosphere of the mid-1990s — and this time British public opinion is far more hostile than then.
#1 by al on December 31, 2009 - 5:51 pm
Don’t forget this one: Germany’s plan of re-drawing the map of Europe along ethnic lines will start bearing fruit. “The regional governors now have direct control over their territories. Fear will keep the locals in line…”
#2 by Dan on December 31, 2009 - 7:45 pm
Why not revive the true old ORIENT EXPRESS in a re-incarnated modern version of high-speed?
#3 by droom on January 1, 2010 - 12:45 am
I would suggest Mr Robert Fova will be invited to write more often on this site as his contribution is a very good one. In fact his thoughts and sense for realism are going beyond the level of intelligence of most authors who are so far invited to write blogs. Thanks, Mr Foca!
#4 by Mrs Average on January 1, 2010 - 2:01 pm
I also liked this contribution- very interesting predictions and a clear common sense style. Now we just have to wait and see if events bear Mr Foca out!
#5 by petros on January 1, 2010 - 2:02 pm
.. . high speed rail construction between Madrid and Lisbon is also scheduled to start at 2010!!
) Hola!!
#6 by Andrew T on January 1, 2010 - 8:37 pm
Interesting. Although you missed:
- European Parliament vetoes at least one new commissioner (who knows maybe even Lady Ashton!)
- Enlargement strategy falls apart when Iceland and then Turkey pull out of accession talks and Slovenia vetoes Croatia’s entry
- Newly elected Tory government in UK push for renationalisation of powers down from the European level
- Europe’s increasingly hardline attitude to Israel ends up with EU recognition of Palestine
#7 by al on January 2, 2010 - 2:02 am
This is on the basis of her being the High Representative already…? or what is this prognostication based on? Why would any commissioner be vetoed now, and seemingly just for laughs?
Doesn’t matter anyway. Getting rid of a commissioner can mean not replacing one (due to the treaties of Nice and Lisbon stipulating commissioner reduction); and it doesn’t solve the problems of no separation of powers (“co-decision” is as antidemocratic as one can get, and shows up the rubber-stamp nature of the European Parliament) and the fact of the existence of any non-elected executive posts in the Brussels government.
The former would not materialise as those countries pulling out, but being rejected (Turkey will be kept out by the ones at the top that want them to stay out). Slovenia is not so opposed to Croatia as to deny its entry to the empire, especially since both in particular were recognised by Helmut Kohl’s government as independent back in 1991 (the event that precipitated the Bosnia conflict).
That’s if Cameron moves from being merely EU-pragmatic to openly EU-sceptic (so-called). That would be their right, because the “principle of subsidiarity” means giving up all of your powers and having them re-devolved to you in a top-down fashion.
The EU’s been trying to divide Jerusalem for ages. They’re only “pro-Palestine” so far as it weakens the Jewish state, because the EU has no desire to see the entire Levant turn Islamic, which is the desire of both Hamas (“violence”) and Fatah (“conquest”). The EU is insinuating itself into the “peace process” for a purpose that doesn’t make sense (they have no business being there), unless of course they’re preparing to instigate another round of Crusades.
#8 by Fanis on January 2, 2010 - 9:32 am
its FYROM not Macedonia
#9 by Paul H on January 6, 2010 - 4:52 pm
Realistically, the UK is not going to leave the EU – there may be a lot of foot stamping and complaining in the coming Conservative Party years, but Britian is in the EU for good. As Mrs Thatcher never tired of saying “There is no alternative!”, not unless Britian wants to become another state of America or have a very cold, lonely existence on her own.
The UK media are largely Eurosceptic – plus the EU Observer attracts a disproportionate number of British Eurosceptics – but don’t imagine the UK is about to head off into the sunset. It isn’t going to happen.
#10 by Anonymous on January 8, 2010 - 3:44 pm
Maybe if Thatcher’s warnings don’t penetrate, then Churchill’s thoughts on a European Union ought to scare you: “It should be built by the English. If the Russians build it, there will be communism and squalour. If the Germans build it, there will be tyranny and brute force…”and it’s the Germans that built this EU and control it.
Dear Al,
For once I agree with you 100%. By my reckoning, England ought to be leading the creation of united Europe.
Trouble is, she’s decided to take a back seat instead. That’s why as it stands now, we must go with a second best solution which is France / Germany in the driving seat.
#11 by petros on January 8, 2010 - 3:58 pm
#14 100% agree. while UK should have taken the lead, they chose to take the back seat with one foot out.
Anyway, we just have to move on, regardless..
#12 by Nik on January 8, 2010 - 6:44 pm
“Realistically, the UK is not going to leave the EU… unless Britian wants to become another state of America or have a very cold, lonely existence on her own.”
But that’s exactly the situation. I think there are a lot of people in England who would be very happy for Britain to enjoy a ‘cold, lonely existence’ (or splendid isolation). Britain will become increasingly like Japan — a lonely, post-imperial island state, cut off from and shunned by its neighbours, mooching and nursing a crippling economic hangover from years of speculative excess.
#13 by mj on January 8, 2010 - 10:46 pm
A few comments for you –
• Re: moving past the legitimacy crisis & the new President and HR – I think it will take a full year before the EU gets over its legitimacy concerns. The problem is that there’s too much uncertainty between Van Rompuy defining his role, HR Aston (just to toss something new out instead of the usual) building the diplomatic services, and the possibility of a Eurosceptic Tory government. Undoubtedly the two new positions will eventually be taken seriously, at least within European circles. Credibility and respect are generally not given, but rather earned. They seem capable, how much time will it take for them to fully take the reins? It would be nice to move on past the navel gazing and to some leading/governing. The next legitimacy problems the EU will face will either come either with the mid-term elections of the President and HR or with the next Commission as there is an increased push for transparency in the decision making process. The groundwork for this was laid in November when the Poles pushed for this very thing.
• Re: Defense – Budgetary cuts will not lead to greater defense cooperation. Until the EU must take action in an area vital to their security interests without the help from the US, the petty squabbles and inaction will continue. The US will not have nearly the concern for a minor war on the European continent whilst engaged in much larger wars in Afghanistan, Iraq and a constant anti-terror campaign. There are a number of places this type of flare up or flash point might arise: Bosnia, multiple places in the Caucasus, Kosovo, Transnistria, or (to throw a less conventional wildcard out there) the Crimea/Ukraine. With the US deeply preoccupied elsewhere, it would be increasingly up to European powers to mind their own backyard. Necessity will be the driving force towards integration. This type of scenario may or may not happen in the next 10 years, but until it does ‘defense cooperation’ are just words on paper.
• Re: the eurozone – there will be a eurozone member debt default. Or at least there will be a crisis of one. It may not be Greece, although between the lying politicians and the striking unions and students, they really are doing their best to be the one to default. Whoever it is, the other eurozone members will be forced to step in as the given delinquent member sits on the precipice of collapse. What this will do is give increased power back to conservative members such as Germany and the Netherlands whilst cutting off Sarkozy, et al. This will support the continuation of the Euro becoming a reserve currency and have a spin off effect of driving member states outside the zone to move towards adopting the Euro. The Euro is the driving force for Iceland’s membership application. The criteria for joining the currency will have to be reevaluated (lowered) if Baltic countries, Poland, Hungary or Bulgaria have a realistic shot at joining anytime soon. It wouldn’t be a surprise, however, if Denmark joined in by 2013. As for the Euro’s valuation, although near default of a eurozone member, more countries joining, general economic malaise as well as the potential lowering of requirements would all point to a weakened Euro, I would bet that it retains and even increases its value against the dollar. This has more to do with the problems the US faces with a ballooning debt, increased requirements on its social programs like Social Security and Medicare as the baby boomers retire (both considered time bombs set to go off before the end of the decade), stagflation creeping in as the Fed window has already remained wide open too long, potential double-dip recession as the current economic stimulus package peters out and the soft housing and commercial real estate markets once again lose ground. This coupled with negative savings rates and high personal debt loads throughout the America does not paint a rosy long-term picture for the US. In comparison, the Euro will seem like a conservative and solid alternative – the only real alternative in terms of a reserve currency.
• Re: the eurozone no longer being a ‘high tax’ environment – This will be especially true once the Bush Era tax cuts expire in 2011.
• Re: Western Balkans enlargement – It has often been said the best policy of the EU is the enlargement policy. This must remain the case to prevent some of the security concerns. Croatia hopefully will join in 2012. If the Serbs are willing to bend over backwards to adopt the aqui and meet any other requirements surrounding the ICTY, then more power to them for trying to set a record. Kosovo needs to be resolved satisfactorily for both sides. One possible solution could be self-rule for Kosovo with the option for Serbian Kosovo to secede from wider Kosovo and form a new province in Serbia proper. The foreign relations for the entire Serbia-Kosovo territory is handled by Belgrade, but in most (all?) other matters be handled through Prishtina. Bringing Serbia into the fold will lend stability throughout the region as well as providing an outlet should problems arise between Belgrade and Prishtina. Macedonia should be encouraged to work towards joining and addressing some very serious problems dealing with corruption and freedom within the country. As for the Greeks, it needs to be made clear to them that any push towards a ‘FYROM’ titling is just ridiculous. They are acting childishly and petty over the silliest of issues. 25 years ago there was no official region in Greece called Macedonia. There is no historical claim. They are simply acting like bafoons. It’s a name, nothing more and their actions go against treaties they have signed with Macedonia. By bringing the country of Macedonia into the EU (and NATO), by requirement you cause them to give up any potential historical claims to land which do not exist. As someone who has lived in the region but is not from the region (and never has lived in either country), Greece and Macedonia need to move past this issue. The EU should help them with it. One final addition to the list, by the end of the decade Montenegro should be well on the path towards accession. Some consideration should be given towards laying the groundwork/supporting Albania.
• Re: The transcontinental rail network – The creation of a transcontinental high-speed rail network is exciting and necessary. In addition to the future growth you mentioned, other areas in Western Europe need to fill out over the coming decades. I personally wouldn’t mind a Porto-Bordeaux-Lyon-Geneva line. Another suggestion would be a Marseille-Genova-Roma line. In the UK, London-Glasgow/Edinburgh and London-Cardiff lines should be explored. In Germany much needs to be done to create a spider web of connectivity which integrates its neighbors in every direction. As many have pointed out, Robert, you leave out half of the EU in your praise of the network. Until there are Tallinn-Athens, Berlin-Istanbul and Amsterdam to Bucharest lines the network will never be complete. It may be a long-term goal, but as environmental concerns and carbon emissions need to be reduced, realistic alternatives for travel need to be available for the entire bloc. The 1 January deregulation of the passenger rail service will help this to become a reality as firms such as SNCF expand into other markets.
• Re: Economic growth within the EU – While ‘core Europe’ will continue to see steady, modest growth once the current economic malaise passes some of the peripheral countries will lag as their growth was built on debt – Greece and Spain. Ireland, having taken appropriate austerity measures, will rebound in the mid-term and out-perform ‘core Europe’ slightly given the nature of its economy. The new rapid growth region of the EU will not be on the periphery but rather the Visegrad Group who have laid the foundation for rapid growth and could all be eurozone members by the later part of the decade. Poland, especially, is poised to become a leader.
Other areas to watch:
• The membership negotiations with Iceland should be interesting to watch. Even though Icelandic economy is currently in shambles, the country has much to offer the EU. As an EFTA member, much of the Aqui is already in practice. After the details of the Icesave repayment is worked out, there is little to hold up the application. The one hiccup is with Fisheries. The possibility of unfettered Spanish trawlers fishing in Icelandic waters is death to the process. A compromise would need to be reached, possibly along the lines of the Irish Box. This is not likely to happen given the notion that the EU doesn’t negotiate entry, except for what Iceland has to offer the EU: rights and a seat at the table when discussing the Arctic. This is especially important given the prospective transportation routes and natural resource potential which lies under the decreasingly frozen seas. For Iceland’s part, being backed by the EU would give it greater heft at any Arctic negotiations. In the long run, the knowledge and experience of the Icelanders in banking will likely help them to rebuild their banking sector, particularly if they are shielded by being a member of the eurozone. Between diversified fishing, energy and revitalized banking sectors protected by the Euro, Iceland is likely to be a net contributor to the EU. It is easily feasible that Iceland could accede by the middle of the decade.
• Should Iceland join, there would probably be a once in this generation chance that Norway would opt to hold another referendum on joining. The motivating factor would be their remaining the only Nordic country not to have joined. At some point, EFTA becomes bilateral relations between Norway-EU and Switzerland-EU. I believe that politically consideration will be made by Norway as to not having a seat at the table. Should Norway decide to accede, I think there are even odds there is a domino effect and that Switzerland restarts its negotiations – negotiations that are currently open but frozen. This is important because bringing in these countries makes the enlargement into the Western Balkans much more palatable from a fiscal standpoint. That leaves open the possibility, albeit slim, that the EU of 2020 is possibly 6 (7?) member states larger (Croatia, Iceland, Norway, Switzerland, Serbia, Macedonia, Montenegro?).
• There must be some treatment of micro-states such as Andorra, Liechtenstein, San Remo, Monaco, etc. within the EU. To fully integrate the continent they must be accounted for and represented. Although not on anyone’s radar, it will eventually happen.
#14 by petros on January 9, 2010 - 2:35 am
mj, you are extremely optimistic!
Couple of minor points.
“”25 years ago there was no official region in Greece called Macedonia.”"
Not true, there were the east and west Macedonia administrative regions even before 1940. But I agree that our (Greek) stance was childish. The last 5 years however it is much more reasonable.
“”Should Iceland join,”"
Although I’m all for supporting the Icelanders (and I really don’t like the UK/NL pressure for the repayment schedule) I don’t want Iceland in, simply because they just want (?) to join for purely opportunistic reasons,
And a question for you. What’s the EU purpose? To become bigger by including every single country of the continent? aim here? I think we should first solve our BIG problems (democracy, employment and global competitiveness, income inequality, corruption) and then even Norway might consider to join. At the time being, I think Norway and Switzerland are better out so that we can have them as an example.
#15 by Anonymous on January 11, 2010 - 8:19 pm
Mj,
Very nice comments.
Just a single disagreement. If Norway and Switzerland are to join, it’ll be the latter that gets in first, not vice versa as you suggest. The answer, as always – or almost always – lies in economic logic. In essence, Norway is out due to its non willingness to share management of their fossil fuel resources. Switzerland on the other hand, is out as a result of its banking legislation which allows it to profit heavily from being a tax haven.
Now, with the G20 strongly pushing for dissolvent of all tax havens and Switzerland already agreeing to reform its banking sector, whose incentives to stay out of the EU are disappearing? Mind you, Norway’s FFs will be there for quite some time. And so will Iceland’s fish.
#16 by Marcel on January 12, 2010 - 7:55 pm
@17 (mj)
one problem is that people like me (who love democracy and logically thus hate the EU) will not allow Reich IV to move on from its legitimacy crisis. We will fight the undemocratic monstrosity all the way, against the minority of politicians, diplomats, bureaucrats and progressive young students (these tend to hate democracy and love the idea of centralized control).
#17 by Ryszard Bujnicki on January 15, 2010 - 12:12 am
Whilst I realise that many people want an ever enlarging EU, what happened to the ‘ever closer Union’?
Though I’m a strong supporter of the principle of subsidiarity – why do we have conflicting Overseas Aid, Energy, Environment and Foreign policies? Why do we have multiple defence policies (and armies)? Where is the Food Security Policy? Et cetera.
Or am I not supposed to ask?
#18 by Dan Purnell on January 16, 2010 - 1:35 am
Oh dear, the perils of unmoderated comments …