Skip to main content

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

Police car in Budapest, Hungary

The Threat That Will Save Europe

For the EU, 2015 was another year of fundamental challenges, with two key elements of European integration – the euro and border-free travel within the Schengen Area – being placed under serious strain. But one key development has boosted Europe's prospects: the threat of expulsion gained credibility.

BRUSSELS – For the European Union, 2015 was another year of fundamental challenges. Two key elements of European integration – the euro and border-free travel within the Schengen Area – were placed under severe strain. And neither is in the clear. Nonetheless, one development in 2015 offers reason to hope that EU leaders will move beyond “muddling through” to implement bolder solutions in 2016: The threat of expulsion gained credibility.

The global economic crisis that began in 2008 exposed the deep flaws in Europe’s monetary union, though it took the near-death experience of the euro crisis of 2010-2012 to force Europe’s leaders to act, by creating a large fund to help struggling countries and establishing a banking union. Even so, more than three years later, that union – which entails supervision by the European Central Bank and the beginnings of a fund for restructuring failing banks, but lacks a common system for deposit insurance – is far from perfect.

Despite its flaws, the banking union helped to keep financial markets calm in the first half of 2015, even as Greece’s new government, led by Prime Minister Alexis Tsipras, challenged a basic feature of Europe’s approach to national financial crises: that recipients of support must engage in belt-tightening. In a July referendum, Greek voters delivered the outcome for which Tsipras campaigned, soundly rejecting the conditions – including strict austerity – which Greece’s creditors had demanded in exchange for a new bailout.

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/hHIoGnI;
  1. leonard52_Frank Augstein - WPA PoolGetty Images_borisjohnsonthumbsup Frank Augstein/WPA/Pool/Getty Images

    The End of the EU’s Brexit Bounce

    Mark Leonard

    After years of watching the United Kingdom muddle through a political crisis while enjoying an unprecedented level of unity among themselves, Europeans now must prepare for darker days. Negotiations over the future UK-EU relationship will inevitably divide Europeans and offer fodder to Euroskeptics.

    1

Edit Newsletter Preferences