By Iryna Lozynska
Quo vadis, Europe? Only 33 years ago in West Berlin, against the backdrop of imposing Brandenburg Gate, Ronald Reagan was charismatically urging Mikhail Gorbachev to “tear down this wall.” Winds of “Europhoria” have enlivened the continent after the Wall came down, bringing forth the formal enshrinement of the European Union and the systematic enlargement of the European family. From the humble beginnings with founding five states of the European Coal and Steel Community in 1950s via the monumental Eastern Enlargement of 2004 to the present 28-strong membership and five recognized potential members, not to mention the Eastern Partnership, Europe of the past hundred years has never been more integrated. Neither has this unity and progress been more fragile. The promise of a single market supported by history’s greatest experiment in supranational governance has been mired by problems of external (Russia’s military aggression in Moldova, Georgia, and Ukraine, and US’ waning interest in the transatlantic alliance) as well as of internal (Brexit, Greece bailout, migrant crisis, the rise of populism) character. The world is no longer Eurocentric, and Europe is a continent with an identity crisis. What lies in the decades ahead, apart from “managing decline”?
Values and Populism
In order to divine at the state of Europe in 2040 one must first establish what is Europe? For many the world over (and especially for the prospective members of EU which are trying hard to meet the entranced criteria for joining the bloc), Europe is not about a place as much as it is about an idea, an aspiration, a symbol of better future, pluralism, multilateralism, democracy, diversity, freedom, and collaborative approaches to policy-making. As much as public discourse shies away from discussing ideologies and values, they are important, and European values are why Europe still matters and will matter even as it takes a backseat and lets emerging economies run the show by 2040. Codified in the Treaty of Lisbon, European values are defined as “respect for human dignity and human rights, freedom, democracy, equality and the rule of law.” As for the vox populi, they see protecting human rights worldwide (48%), freedom of speech (38%), gender equality (38%) and solidarity between EU member states (33%) as the main fundamental values to preserve in the EU. On the values front, it seems, the people and the powers are still largely in sync, giving a positive signal for the future.
What do European values mean for the long-term prognosis? They might just become critical to the region’s survival in the multipolar world. Francis Fukuyama might have spoken about the end of history in the early 90s, however, it appears the world is still transiting out of the post-1990 unipolar system and waning Pax Americana. One of the most important international relations theorists of the twentieth century Hans Morgenthau believed that plural systems (like the EU) would generate greater stability because the defection of a single state from an alliance would not upset the whole system – alliance members would act cautiously in order to not upset the balance. Thus, the multilateral nature of EU makes it well-equipped to navigate the interconnected and pluralist future that will define everything, from economics to geopolitics.
The rise of populism has deflated much of the pomp around European values over the past decade. Well, the good news is that ‘eurofatigue’ and ‘euroscepticism,’ the Brexiteering angels of malcontent, are not new concepts, periodically entering the spotlight in the 1980s (Margaret Thatcher), 1994 (Denmark rejecting the Maastricht Treaty), and 2014 (EU Parliament elections). In this context, the insights from latest survey commissioned by the European Council on Foreign Relations appear less fatalistic: while over half of Europeans believe the EU is likely to collapse within a generation, the support for the EU is higher than at any other level recorded in more than a quarter of a century! The diagnosis appears to be the opposite of ‘eurofatigue’ or ‘euroscepticism’ – it seems Europeans are actually very aware of how valuable the EU is, and equally terrified of losing it. Public concern on the wings of values-based understanding European identity will provide solid support for the region’s raison d’etre as it looks to the future.
People, Economies, and the Emerging Europe
Aside from galvanizing around values, the Europe of the future is facing a drastically challenging demographic and economic landscape: 25.5% of its population will be over 65 by 2030 (up from 19% in 2017). At the same time, European spending on age-related issues will increase by 2%, with most of it spent on health and long-term care. Economic growth, a reflection of the demographic crisis, will be sluggish. If, today, of the world’s eight largest economies, four are European, by 2030, that number will be down to three, and by 2050, only Germany is set to remain. There are bright spots still – Europe remains one of the least unequal economic regions in the world plagued by economic inequality made ever so palpable against the backdrop of “we are the 99%” and Thomas Picketty.
The conventional medicine against anemic economic growth is investment in education as well as encouraging immigration. Europe gets mediocre marks on both counts, with expenditure on education on a steadily declining trajectory, and immigration policies a well-publicized inferno, scattered across individual member-state purviews and decision-making. According to Jan Techau, the former director of Carnegie Europe, the EU should build a “properly regulated shared ‘market’ for immigrants.” Indeed, for a region that prides itself on harmonization, cohesion, and integration, a common immigration policy is a logical step that will help solve the demographic and economic challenges of the future. Without a unified front, immigration will be the Achilles’ heel that will destroy the European Project.
Over the past five years, global investors’ eyes (and their FDI dollars) have been laser-sharp on the Emerging Europe, specifically Poland, Romania, and the Visegrad Group. Also known as “the China of Europe” or “Factory Europe,” Emerging Europe has been liberated from the shackles of command economy and is now marching on, somewhere poisoned by corruption, elsewhere by populism, into the future with economic projections healthier than those for “Old Europe.” Taking advantage from near-shoring, automotive and business process outsourcing services strength and cheaper labour, Emerging Europe has grown from a liability to an economic engine and a magnet for Chinese investment. However, not all is cloudless on this horizon – demographic situation in Emerging Europe is even worse than elsewhere in the region, and with political uncertainty and Russia’s proximity, Factory Europe, sadly, will not be the engine to drag the entire continent out of economic decline in the next few decades.
The 2040 prognosis for Europe in the economic and demographic context is bleak. However, given the fact that relevant solutions lie in the areas where the region has significant experience and expertise (i.e. compromise, integration, harmonization, and cohesion) hope remains, provided political will and continued public support are there.
Climate and Energy Security
By 2030 the region is set to draw 32% of its energy from renewable energy sources. As the US exited the Paris Climate Agreement and China still lacks a stance to shape global response, Europe finds itself leading by default. The rhetoric is all there, and even though there is some internal dissent (e.g. Poland refused to sign up to the EU’s 2050 goal at a summit in December), EU is looked upon as leading the charge, the president of the European Commission outlining Europe’s Green Deal as “Europe’s man on the moon moment.” Climate concerns are also echoed in the wider discussion on European values. According to the Eurobarometer survey, nearly every third respondent (32%) wants Parliament to address combating climate change as its biggest priority. Through the prism of climate, Europe is well-positioned to innovate its stance as a geopolitical actor well into the future, as leading through climate may well become the region’s new identity.
However, not all is altruistic in the world of Europe’s climate and environmental aspirations. Europe’s dependency on Russian gas is a major weakness that translates not only into a tougher road toward climate commitments but also places the region in a politically vulnerable position, making this energy dependency turn into political inertness when it comes to managing Russia’s interference both in EU’s neighbourhood (via Ukraine and Georgia) as well as deep within. Russia remains the dominant supplier of natural gas to Europe, rising from about 30% market share in 2014 to 37% for all of last year. Building energy independence goes hand in hand with demonstrating climate change leadership – the sooner Europe galvanizes political will, fights Gazprom lobbying, all while investing in renewable energy, the higher will be its chances in securing a stable future for the long-term.
As things stand, the climate and energy security, as well as the demographic and economic lens cast the darkest outlook on Europe’s future. However, given its institutional strengths as well as the legacy of pluralism, value of democracy, respect for human rights and the rule of law, Europe is foundationally well-positioned to gracefully weather the dramatic transformations the future will bring. With its role shifting, Europe will give up the economic reins to the Emerging World, but the mythos of its values may transform the region into a soft power and a guardian of humanist ideals. In the words of Robert Schumann, one of the founding fathers of the European Coal and Steel Community, “Europe will not be made all at once, or according to a single plan. It will be built through concrete achievements which first create a de facto solidarity.” It is precisely the culture of solidarity that will hold the keys to Europe’s future.
Iryna Lozynska is a Senior Research Consultant at M-Brain Group.