With the final hours of 2018 ticking away, it’s time to look back at the events that have made a lasting impression on analysts, politicians and citizens. These events will be associated with the past year and will certainly give us something good or bad to look back on. We can say that man has now mastered pretty well the approaches to conventional risk mitigation as such risks are relatively easy to isolate and manage with the standard risk assessment methods or by applying the different management approaches. But the same cannot be said for the risks of the complex interdependent systems our world is built on, such as organisations, economies, societies, environment. Signs of tension are now easily discernible in many of those systems: problems such as conflicts, persecutions, environmental degradation, and the resulting uncertainty, persist. Our accelerating pace of change tests the dampening capacity of institutions, communities and individuals. With such dangerous feats in a complex system, the risk comes not from higher damage but from the “disastrous collapse” or from shifting drastically to a new, sub-optimal form of the status quo.
2018 was, in all likelihood, a year that challenged global stability and peace, questioning whether Europe will step away from the path of low economic growth, uncertainty and imbalanced leadership of the past decade. 2017 was successful in overcoming potential crises. Right-wing nationalists failed in Dutch, French and German elections, most EU economies registered positive growth. But what about the EU trends in 2018?
Populism – a step towards transformation of European politics
The far-right parties may have lost past-year elections, but they are on the rise in many European countries. More generally, culture and identity issues fuel political tension within and between EU Member States (such as Poland, Hungary and, to some extent, Spain). Polarisation of groups of different cultural heritage and values can thus become a driver of political risks in the European countries in the current year and afterwards.[i]
While it is true that populist parties, and more specifically radical right-wing parties, have been on the rise in the 21st century, that is only one part of a bigger and more important trend: the transformation of European party politics. This transformation affects all parties, not just the populist ones. Centre-left parties are the main losers, greens and radical right parties the main winners, while centre-right parties survive, and sometimes prosper (at least in the short term). This transformation of European politics deserves more attention by government and academics alike, because “The times they are a changing’” may not be a sufficient explanation and this time we need better policy projections to know which way the wind blows.
Migration – a long-term challenge
The “migration” case is a no less concern for the EU. Although the record high migratory flows to the EU observed in 2015 and 2016 have fallen by the end of 2017, arrivals of migrants by sea remain significant. In 2018 and in the years to come, taking into account the global effects of international and internal conflicts, as well as climate change and the increasing disparities between the EU and third countries, migratory pressures are unlikely to decrease. The EU must therefore find ways to adapt to the new reality and be prepared for the resulting migration flows. Measures have already been envisaged and are in progress in order to achieve it; the political priority is also reflected in the EU budget, with nearly €20 million earmarked for migration and security in 2018 and total funding in these policy areas amounting to €22 billion in the period 2015-2018.
But the issue of migration is dividing Europe as seen from the different positions on the UN-led First Global Pact for Safe, Organized and Regular Migration. Speaking to the German Bundestag on 21 November 2018, Chancellor Angela Merkel said it was in the interest of her country to support the pact and Berlin was relying that the pact to be signed in Marrakesh in December would reduce migratory flows to Germany, ensuring that they can expect humane treatment elsewhere. However, as we know, the leaders of a number of Central and Eastern European countries have flatly refused to sign the UN-initiated pact. According to the governments of Poland, the Czech Republic, Hungary, Austria, Croatia and Bulgaria, the adoption of the document will eventually lead to an even larger influx of illegal migrants. Although the pact should only serve as recommendations, the experts point out that some of its clauses are reasonably perceived by a number of states as violating their sovereignty.
In order to ensure an adequate, fair and uniform response to this issue, the EU is determined to reform its overall asylum system, to strengthen partnerships with third countries with a view to mobilising sufficient funding to tackle the phenomenon while protecting its citizens and the free movement within the EU. The efforts of governments and the European institutions for joint action to negotiate and adopt effective legislation in the field of migration management continue to this day.[ii]
The end of Merkel’s era. Macron’s government put to the test.
In early 2018, Germany seemed to be coming out of the political anxiety, with record-low unemployment levels but weakened government. In March, after nearly six months of difficult talks ended with a deal for a new grand coalition of conservators and social democrats, Merkel headed the German government for her fourth term of office. But illegal migration continued to dominate Germany’s agenda throughout 2018 and was the bone of content for the coalition partners CDU, CSU and SPD. When over a period of just two weeks the Christian Democratic Union (CDU) made a poor showing at the regional elections in Hessen and its Bavaria-only sister party Christian Social Union (CSU) lost its majority in the local parliament, Merkel said she would not be standing as party leader of CDU and will not seek another term as chancellor. The end of the Merkel era followed by the upcoming European parliamentary elections and regional elections in three provinces in East Germany next year will be the first major test for the new CDU leader Annegret Kramp-Karrenbauer.
The last months of 2018 were marked by days of violent protests in France over Macron’s higher fuel tax policy. Many claim that populism is at the core of the protests continuing in France to date. But how similar are “yellow vests” actions and the populism we see in the West, including Italy and, to a lesser extent, in Central Europe?
In all likelihood, what links them, apart from the demands, is the rejection of existing parties, alliances, and government institutions that are unable to understand the basis of their complaints or to offer support against economic uncertainty. They differ however, in that yellow vests do not have the characteristics of populism. They are not linked to any political party, let alone a far-right one. They are not focused on a race or on migration problems, such issues are not even on their list of demands. Their movement is not headed by one leader igniting protests. Nationalism is not on their agenda. Yellow vests reject the political movements of socialists and the political movement of President Emmanuel Macron.[iii]
Next, the absence of an unambiguous response by the President to what was happening in the past weeks proved controversial. There is a paradox in the current French conflict, as the rise of Macron was rooted in the wiping of existing political parties and rejection of traditional political mediators such as trade unions. His campaign was called “Revolution” as it expressed a kind of “contempt” for the parties that had been passing power over to one another for 50 years. However, by personalizing power and rejecting what was before, Macron’s policy gives rise to institutional weakness in which yellow vests’ representatives now act. As a result, according to a recent study, support for Macron has significantly decreased in the context of recent events, with 8 out of 10 French citizens no longer supporting the French president. As a result of protesters’ discontent and the growing distrust of authority, demonstrations scaled up and demands escalated from lower fuel tax to higher pay and better living standards.
“Brexit” – the sequel
Developments concerning Brexit were equally important for the EU in 2018 as UK’s leaving the Union has become a destabilising force in Europe, making possible what orthodox Europeanism has always tried to avoid –a reversible eurointegration process. It is perhaps this event that has made “eurocrats” look east, including at the Western Balkans, but it has also increased the geopolitical rifts occurring parallel to the numerous European crises (financial and economic, migration, and democracy crisis).
Britain has always firmly defended its right of refusal, winning, de facto, its own autonomy within the EU and preferring the “Europe à la carte” model which allows it the freedom “to pick and choose” within the Union.[iv] Besides, in a Brexit situation, the United Kingdom strives to negotiate participation in those agreements concerning European trade which it is interested in and from which it can secure many advantages.
British Prime Minister Theresa May’s efforts to save her faltering Brexit deal ended Friday, as EU leaders sent her away empty-handed and a leading official described her plans as “sometimes nebulous and imprecise”, according to a CNN article. After May’s presentation, EU leaders rejected the demands and instead stepped up plans for a no-deal Brexit, which also means no transition period.
According to Simon Usherwood, a reader in politics at the University of Surrey, “On March 29 next year, the UK would leave the EU and everything associated with that would come to an end. A no-deal doesn’t stop the UK leaving but it means there is absolutely no clarity about what happens”.
No matter what happens, one thing is clear – after Brexit, the United Kingdom, the British Commonwealth, transatlantic relations, European integration and the world in general will turn a new leaf in their development.
A glance at the EU enlargement – development outlooks for the Western Balkans. The role of Bulgaria
As has already been mentioned, in the present times of critical junctures for the leaders of the EU Member States, there are enhanced prospects for the Western Balkans, which are currently the part of the European continent most vulnerable to external intervention, and their future will impact the overall line of development of the European countries. The First Bulgarian Presidency of the Council of the EU, which is, perhaps, the top event that our country will remember 2018 for, has played a critical role in that respect.
Bulgarian efforts will persist until all Member States firmly commit themselves to the understanding that the European perspective for the Western Balkans means investing in the peace, security and stability of Europe. A package of measures, the Sofia Priority Agenda, was adopted at the Summit in Sofia on 17 May 2018. It reconfirms the mutual commitment to the European perspective of the Western Balkans. It is good that the meeting in the capital of Bulgaria was not just another isolated event. The key messages of the summit found their rightful place and were discussed at the London Summit within the Berlin process in early July. The next rotational presidencies also declared their willingness to work towards stronger links and cooperation with the Western Balkans. The next EU-Western Balkans summit will take place during the Croatian Presidency of the Council of the EU in 2020. In addition to everything that has been said, Bulgaria also supported the agreed initiatives to strengthen the rule of law, the security and migration commitment, the support for social and economic development, to increase connectivity, for a digital technologies programme for the Western Balkans and for support of reconciliation and good neighbourly relations. Our country thus placed the focus on and brought the attention back to the integration of the Western Balkan countries. We can say with some certainty that all activities pursued by Bulgaria have unfailingly contributed to the development of good neighbourly relations and regional co-operation, which are of key importance for the EU enlargement process. In this context, EU enlargement remains a key policy, with the main goal of preserving the security and prosperity of the European continent. Support for the Western Balkans should remain high on the EU agenda until the ultimate goal – their full EU membership – is achieved.
The important role played by the Bulgarian Presidency of the Council of the EU has shown that it was not only a challenge and a responsible task for our country as Europe’s ambassador on the international arena, but also a national cause. It is the efforts made and the number of important events organized in the different fields and polices of the EU through the lens of the debate on the future of Europe, that the Bulgarian Presidency was praised for.
2019 European Parliament Elections – Europe of nations or Europe of peoples?
Worth noting is also an upcoming event that will to a large extent reflect the current political restructuring in the EU – the European parliamentary elections. The European Parliament has, in fact, never enjoyed the same level of interest as other European institutions like the Commission, the Council and even the Court of Justice. European parliamentary discussions rarely go further than Brussels or Strasbourg and the voter turnout for the places in this European institution is usually low. Such facts have long been cited to prove that the EU suffers from democratic deficit because citizens are not sufficiently engaged in EU-level governance. But now the EU is at the centre of domestic political debates that increasingly involve existential questions about the survival of the eurozone and the entire European project. This means that the candidates for the next year’s elections will hardly focus on domestic issues alone. There may well be a wide-ranging discussion on the future of Europe and the European policies, particularly in areas such as migration, defence and security, energy and climate change, and the relations with great powers like US and Russia.
While the details of that story still remain unclear, an overall reorganisation of the European political arena, shaped largely by the attitude towards Europe, seems to be certain. If next year’s European parliamentary elections help to advance political restructuring, that could be a big step forward for democracy in Europe.[v]
The US – China trade war
In March 2018, we witnessed the first wave of economic sanctions imposed by the US and Trump’s administration against the Chinese economy. This phenomenon will go down in history as the US – China trade war, which, a year after it started, has not ended yet and the problem persists.
On 06.07.2018, Trump’s administration imposed the first wave of tariffs on $34 billion in Chinese goods including TV sets, aircraft parts and medical devices. Twenty-five percent tariffs on imports from China were announced. China hit back imposing 25 percent tariffs on $34 billion in US goods, including important products such as soya, cars and lobsters.
Shortly thereafter, in September, “List 3” of tariffs was announced, often referred to by media and analysts as the largest-scale sanctions ever imposed. The US announced they would be imposing additional 10 per cent duties on a further $200 billion worth of Chinese-origin imports. China retaliated by imposing 5-10 percent duties on a list of over 5000 US-origin products worth $60 billion.
All these measures taken by the two economic giants give us grounds to look at the situation as a trade war. Set out in Trump’s “America First” campaign, the trade war is, in fact, one his electoral promises which became a fact and had disastrous consequences. Many producers on both markets suffer from the economic sanctions and the World Trade Organisation is essentially faced with the unprecedented task to address a problem of such magnitude. WTO is an organisation whose aim is to coordinate the liberalisation of international trade, but, against the background of the events of the past 2018 and the upcoming developments in 2019, it seems incapable of addressing the global issue between the two economically most developed nations.
IMF has warned a trade war between the US and China risks making the world a “poorer and more dangerous place” in its latest assessment of the global economy[vi]. Global economic growth is now expected to reach 3.7% in 2018 and 2019, down from the IMF’s previous prediction of 3.9% in July. Downgrades to global growth reflected predictions of a slower expansion in the eurozone as well as turbulence in a number of emerging market economies.
Amidst the gloom of economic future, the meeting of G20 took place in early December, where China and US reached a 90-day trade truce. This unprecedented move gave rise to much hope for the future trade relations between the two economic giants.
Only a few days ago, however, another US-China event topped the news and prompted the question “Isn’t that a new phase of the trade war?” Huawei’s financial director was arrested in Canada at the US’s request. This is one of the most serious actions taken by the US administration against the company. The US have repeatedly accused it of espionage which it denied. The arrest may be “a prelude to stern action by the US against company directors,” analysts say.[vii]
What comes next will become clear after that 90-day period the two countries have to solve their conflicting problems ends. One thing that is certain is that, from the start, 2019 will be marked, whether positively or negatively, by a historical economic event of a global magnitude.
Conclusion
To sum up, it can be concluded that the cracks in world order’s foundations, not only in the system of inter-state relations, but also in the domestic policy of the leading global players, is an unavoidable consequence of this order’s entering a period of high turbulence. Those global destructive processes could not but affect the quasi-state structure of today’s European Union. European crises occurred as a result of a combination of internal and international political and economic mistakes as well as mistakes that are the subject of shared responsibility. The EU realises that it can reform and accept the numerous and justified criticisms levelled at the Union, while at the same time rethinking its international role. The purpose of the global effort within the debate on the future of Europe is to give the EU a new impetus to achieve an effective alliance of democratic societies with a clear vision for the common future: a united and strong Europe in a more stable and peaceful world.
[i] Parenti F. M., Reorienting Europe in a changing world, Global Times, 2018, available at http://www.globaltimes.cn/content/1113945.shtml
[ii] Carme C., Reforming the European Union in 2018: five proposals with some wishful thinking, 2018, CIDOB Barcelona Centre for International Affairs, available at https://www.cidob.org/en/publications/publication_series/notes_internacionals/n1_187/reforming_the_european_union_in_2018_five_proposals_with_some_wishful_thinking
[iii] ANALYSIS: The revolution didn’t happen but Macron and the ‘yellow vests’ must now get serious, available on: https://www.thelocal.fr/20181209/the-worst-is-avoided-but-the-crisis-continues, last visited on December 14, 2018
[iv] McLaughlin E., Smith-Spark L., Griffiths J., No-deal Brexit looks likelier than ever after May’s summit humiliation, available at https://edition.cnn.com/2018/12/14/uk/brexit-theresa-may-eu-brussels-intl/index.html
[v] 2019 European Parliament Elections Will Change the EU’s Political Dynamics, Carnegie Europe, available at https://carnegieeurope.eu/2018/12/11/2019-european-parliament-elections-will-change-eu-s-political-dynamics-pub-77922
[vi] A review of China-US trade war in 2018, The Financial Express, Dec. 16, 2018 , available at https://thefinancialexpress.com.bd/economy/global/a-review-of-china-us-trade-war-in-2018-1544960743
[vii] Huawei arrest is a warning shot for foreign business executives, as US makes targeting individuals a ‘top priority’ amid trade war, South China Morning Post, available at https://www.scmp.com/economy/china-economy/article/2177590/huawei-arrest-fires-warning-shot-foreign-business-executives
