Europe’s Rocky Recovery

While the US and the UK have been mired in political chaos this year, the EU has enjoyed improved economic conditions and some political windfalls. The question now is whether this good news will inspire long-needed EU and eurozone reforms, or merely fuel complacency – and thus set the stage for another crisis down the road.

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LONDON – So far this year, the crisis-prone European Union has fared better than expected. Economic growth has picked up, unemployment continues to fall, and troubled Spanish and Italian banks have been resolved without sparking a panic.

Things are looking up politically, too. Europhobic populists were defeated in the Dutch and French elections earlier this year, and have lost momentum ahead of Germany’s national election in September. And, contrary to earlier fears, the political upheavals of 2016 seem to have boosted popular support for the EU, at least for now.

Britain’s decision last June to withdraw from the EU has plunged the country into turmoil, making an exit from the Union seem less appealing to other discontented Europeans. In addition, the Brexit negotiations have underscored the costs and complexities of leaving the bloc, and have rallied the remaining 27 EU governments around a common cause. The same can be said of US President Donald Trump, against whom Europeans are increasingly united.

Above all, the pro-EU reformer Emmanuel Macron’s election to the French presidency provides new hope that the EU can finally tackle its many problems. If German Chancellor Angela Merkel is reelected this fall, as seems likely, she and Macron will be in a position to revive the Franco-German partnership upon which the EU’s strength has historically rested.