Skip to main content

Europe’s Make-or-Break Year

It is no exaggeration to say that the EU is threatened, both internally and externally, by reactionary nationalism, which is why the next euro crisis will come in the form of a political crisis. So why are Europe's leaders clinging to policies that have made a bad situation worse?

BERLIN – The euro crisis, it is said, is over. Calm has returned to financial markets, amid ironclad assurances by the European Union authorities – particularly the European Central Bank – that the monetary union will be preserved. But Southern Europe’s economies remain depressed, and the eurozone as a whole is suffering from stagnant growth, deflationary pressure, and, in the crisis countries, persistently high unemployment.

Not surprisingly, given the EU authorities’ obvious inability to end the malaise, many member states are losing patience with austerity. Indeed, some countries are facing a political upheaval.

When the turmoil comes, it is likely to be triggered – as with the euro crisis – by Greece, which is holding a presidential election that seems unlikely to produce a winner. If the Greek parliament does not elect a new president by a two-thirds majority in next week’s third and final round, it will be dissolved and a snap election will be called. The risk is that Syriza, a far-left socialist party, will come to power.

We hope you're enjoying Project Syndicate.

To continue reading, subscribe now.

Subscribe

Get unlimited access to PS premium content, including in-depth commentaries, book reviews, exclusive interviews, On Point, the Big Picture, the PS Archive, and our annual year-ahead magazine.

https://prosyn.org/0nP8PLp;
  1. reinhart39_ Sha HantingChina News ServiceVisual China Group via Getty Images_jerome powell Sha Hanting/China News Service/Visual China Group via Getty Images

    Jerome Powell’s Dilemma

    Carmen M. Reinhart & Vincent Reinhart

    There is a reason that the US Federal Reserve chair often has a haunted look. Probably to his deep and never-to-be-expressed frustration, the Fed is setting monetary policy in a way that increases the likelihood that President Donald Trump will be reelected next year.

    1
  2. mallochbrown10_ANDREW MILLIGANAFPGetty Images_boris johnson cow Andrew Milligan/AFP/Getty Images

    Brexit House of Cards

    Mark Malloch-Brown

    Following British Prime Minister Boris Johnson's suspension of Parliament, and an appeals court ruling declaring that act unlawful, the United Kingdom finds itself in a state of political frenzy. With rational decision-making having become all but impossible, any new political agreement that emerges is likely to be both temporary and deeply flawed.

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated Cookie policy, Privacy policy and Terms & Conditions