Europe's house of cards shudders ahead of elections

Germany's economy is slowing sharply, Italy may already be in recession, populists are about to surge at the European elections. There's chaos in Britain to be sure, but the whole European house of cards is slowly but surely falling down

The technocrat in chief
Tim Hedges
On 28 January 2019 14:55

It is no bad thing to overdo things around the festive season but the excesses should really come to an end in January. Instead, Britain has been gorging on Brexit for months with no sign of stopping.

Much of the debate seems to consist of people saying ‘of course we mustn’t crash out with no deal’, without explaining why not. Still it is irresistable viewing.

Elsewhere in Europe there is also drama, if not yet upheaval. We are celebrating the Treaty of Aachen, or Aix-la-Chapelle if you are French, which is effectively a repeat of the treaty signed by De Gaulle and Adenauer more than 50 years ago.

Like two C-list celebrities renewing their marriage vows for Hello! Magazine, Merkel, who has promised to resign, and Macron, who has achieved the remarkable feat of being even less popular than his predecessor Hollande, are reassuring the world that their countries will be acting together - oh, except in the field of arms sales, and the banking union and euro-bonds, on all of which Germany will not agree.

There is an agreement however to use each other’s language more, eliminating English. Good luck with that, it is the only language Merkel and Macron have in common.

Further south, the Greeks are rioting. Nothing new, of course, and I am always sympathetic: they have been treated abominably and there is widespread poverty. The tectonic shock of the Troika depression will still be felt for generations. But, incredibly, they are not rioting over poverty, pensions or the disgraceful bailout, but over whether their northern neighbours should be able to use the name Macedonia.

True, Philip of Macedon, father of Alexander, ruled what is now northern Greece, but when all is said and done the name, in most of Europe, means ‘fruit salad’ and is scarcely worth the effort.

I think the Greeks, in their two forms, cause more trouble than the rest of Europe combined. Cyprus is under scrutiny for selling passports to Russian gangsters so they can launder their ill-gotten gains in European banks.

On to another ancient power, and Rome is piling up a list of grievances against Paris. It started over immigration, when France insisted Italy force its immigrants to seek asylum there (if only they maintained the same policy in Calais!). Macron closed the border and started piling on European pressure when Salvini closed his ports.

The mutual distaste is now open. After Italy accused France of trying to appropriate Leonardo da Vinci with an exhibition (Leonardo died in France), deputy PM Di Maio now claims Africans are only emigrating because countries such as France stole their wealth.

The other Deputy PM, Matteo Salvini, who is way ahead in the polls, has softened his rhetoric against the EU in order to broaden his support. He now simply says that the EU should do fewer things and do them better, a slogan which will resonate among many other members. Poland and Hungary are bitterly resentful of EU interference in their internal affairs.

Italy represents a double threat to the EU: it disagrees with the Macron line on further integration and dislikes the very idea of a Franco German axis. At the same time, Italy’s massive debt is a looming threat, nitroglycerine under the Berlaymont building, which could explode with the smallest earthquake.

So how will all this play out in the European elections at the end of May? Some are saying that Italy, Marine Le Pen in France, AfD in Germany, together with the Poles, Czechs, Slovaks and Hungarians will field a new party of populists, troublemakers and Anti-immigrationists.

Certainly these parties will do well. The idea of a couple of big names agreeing to a bit of ‘more Europe’ and it going through on the nod would seem to be a thing of the past.

And whatever happens, the continent seems to be stagnating. Germany is slowing, Italy may already be in recession. Mario Draghi has cancelled the quantitative easing and there is not much left in terms of firepower at the central bank. If there is a Europe-wide recession looming, the populists will romp away at the elections.

It makes you wonder: if the UK parliament decides to reject the referendum result and remain in Europe, do we know exactly what we would be remaining in?

Tim Hedges, The Commentator's Italy Correspondent, had a career in corporate finance before moving to Rome where he works as a freelance writer, novelist, and farmer. You can read more of his articles about Italy here

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