Social and political tensions in Europe are reaching new heights. Fear of migrants fuels nationalist sentiments and religious animosities are becoming serious. Many people are tempted to break away from what they see as dysfunctional: old political elites, Schengen, the euro, or ‘Brussels’ in general. After fretfully accepting a million asylum-seekers last year, almost all European leaders now seem to be focused squarely on limiting the numbers. There is little confidence left to do more.
Events unfold quickly but, in my view, growing populism and anti-Europeanism are still mainly a consequence of the widespread economic insecurity produced by conservative policies in the first half of this decade.
The long economic crisis, aggravated by the Eurozone’s fragile set-up and abrupt fiscal consolidation, has caused severe social hardship, undermined investment in future growth and deepened inequalities both within and between countries.
More recent challenges such as renewed geopolitical instability, terror attacks/threats and refugee inflows are not the main cause why anti-EU forces are gaining each day. The basic underlying anxiety is socio-economic in origin and relates to the worsening of economic perspectives for the large majority of Europeans over many years.
The centre-left, for its part, is now paying the price for its timidity and weak coordination in the early years of the euro crisis. Our ideas may not have been ‘austerity-lite’, but our actions often were. The Economic and Monetary Union is being repaired in a very incremental way, ‘our’ investment plan carries the name of J.-C. Juncker and has almost no new public money in it, and talks on a scaled-down Financial Transaction Tax are still on-going. Moreover, we have championed the Youth Guarantee, but otherwise we have been too slow in coming up with a serious agenda of progressive reforms.
Can these worrying trends change before it is too late? Can Europe regain popular support, can social democratic parties win back voters, and can a robust economic recovery be achieved at last?
Individual governments cannot change much quickly, especially in the Eurozone. Structural reforms take time, notably the useful ones, while national monetary and fiscal policies are either non-existent or heavily constrained.
Yet a lot could be changed together, collectively, if we actually had a political debate on Eurozone economic policy and really managed our currency union as a single economic entity, which it is.