Blog: You, us, everyone

Nationalism – a risk for the EU?

In more recent history, the question of whether the EU will fall apart or stay alive has come to the surface. While the investigation of this possibility is certainly warranted, we strongly believe that the EU will stay alive. Nevertheless, some strong rethinking may be necessary to get the EU experiment going again and more important to be better understood by its citizens. 

During the past 40 years or so, the European political elites have conducted, regrettably and in an unfortunate manner, a political mantra which has proved to be too far away from the reality for many of its citizens. This resulted in the raising of some populist parties across the globe which is now widely seen as an existential threat to the European Union.

Today, there are two distinct political perceptions within the EU: The main arguments of opposition parties is to reduce the number of free-riders and newcomers. They believe by taking control of the government and introducing any kind of anti-establishment policies   the world would become better. It is probably wrong because the equitation “short-term benefits” versus “longer-term disadvantages” is not a balanced one. It is not viable and un-social to play to short-term populism (resulting in some kind of cave-population) to win an election and at the same time promote the long-term success of a country. This is contradictory.

On the other hand, incumbent leaders and their discourse is that higher taxes for the wealthier and a subsequent redistribution through more social benefits, fewer working hours, job-sharing and so on, would make the society better. In theory, yes this is correct, but the reality is different.

Washed out recognition of achievements

Every one, whether younger or elderly people need and deserve some recognition. Our present society, ranging from the educational to the professional system, is set-up in a manner so that everyone can gain recognition through a specialized activity. This quintessential experience is no longer achievable, because of political missteps, for many of us. The outcome of the US election and the UK-Brexit referendum are more the result of anti-establishment vote than anything else.

Yet, there is probably more to come from the base but we believe that the majority of the EU population starts understanding now at least the global benefits of the EU and that at some point, the anti-EU sentiment will evaporate.      

A recent survey undertaken by Bertelsmann Stiftung, an organization that regularly measures attitudes toward the EU, shows that euroskepticism has receded throughout Europe after Brexit, including in countries where nationalist populists have recently won elections or may win them in the near future. While the result of a public opinion survey at a given date becomes more and more useless as time goes on, the recent elections (USA and France) and referendum results (Brexit) point towards the fact that poles can still do accurately indicate the direction [but not the end result] of the public opinion. In this respect, the results of the Bertelsmann survey's results are unequivocal. It is moving from bad to better.

Post-disconnect – does the world look better?

What are key-milestone for the EU in the coming months? The next important European votes are the Italian referendum on 4 December, the Dutch general election in March 2017, the French presidential election in April/May 2017, and the German general election in autumn 2017. In Italy, we assume either outcome will only have a minor impact on the EU, as many lessons were already learned from populists gaining traction in other places. In Holland, historically a bastion of the far-right movement, the anti-EU sentiment is relatively low given that the population enjoys global economic benefits from the EU. In France, the new president, and subsequently the new parliament, will most likely be composed mainly of moderate right-wingers and will have the herculean task of a) increasing the moral of the French population, and b) increasing the weekly working hours from 35 to 39 for public employees and for private company employees to maximum 48 hours. The increase in working hours should make French companies more competitive in an international environment. In Germany, in the absence of any valid opposition candidate, the same team and subsequently the same program will be re-conducted.

Whatever the stage that is set for these elections, now know that extremists fight loud and hard to win the election, but fall short of any tangible results once elected; such as Brexit where there was no plan B, and in Italy where the newly elected Mayor of the City of Rome was forced to adopt a more prudent style. Given this, we see only a marginal risk of Eurozone break-up scenarios developing next year.

Instead of imagining the collapse of the EU under the onslaught of nationalism, it is useful to picture a different union in which some major member states build a core economic union, thereby becoming less bureaucratic and less geared towards social equality, but more trade orientated.  

At present it is difficult to see these changes coming as the political elite in Brussels got terribly vexed and offended by the Brexit. According to some close friends in Brussels, the political elite is still in the “Denial Phase”, understand that a different organization of the EU is not feasible. Indeed, under such circumstances, and with that current mood and makeup, it is difficult to imagine that the EU can turn the ship now.

What we believe is that change will not come from inside, but rather from the outside. The seeds of these changes to come may have already been planted.

1. Let us look at the US. Under the new administration, the US will probably favor isolation from the rest of the world. This leaves a vacuum for others to fill the void.
2. Changes in the leadership of key countries such as France will impact the EU on how the Union will deal with the rest of the world. We see   less Europe in the case of the election of FF, but probably a much stronger collaboration with Germany. In the case of the third potential candidate, EM, we note that his economic policies make sense, but he will not have the external support and recognition to implement them successfully.
3. The German Chancellor Angela Merkel will most likely be re-conducted for a fourth mandate, which helps political continuity of the EU and the German impact has in Brussels.This coupled with a stronger French team, could bode well for the EU.  
4. With the exit of Britain, the remaining EU-members have lost one key member in the field of defense. The simple fact that the global European defense has to be reorganized will give some member states more impact in Brussels.

We expect that Germany will massively rearm. The question of reorganizing the EU defense and a renewed start of the German-French collaboration also supports the idea of “Core Union”, which would probably be the most opportune outcome from the present crisis.