Europe on the Brink of Change


The Bloomberg news agency has named a number of European countries that its experts believe may soon turn into hotbeds of instability. These include Germany, Spain, Austria and the Netherlands. Great Britain, Lithuania, the Czech Republic, Romania, Croatia and Hungary can also be included for their part in furthering the region’s instability. The news agency links any possible unrest to the forthcoming parliamentary, presidential and local elections in these countries, as well as the forthcoming referendums.

According to Bloomberg experts, the state elections in Mecklenburg-Western Pomerania and Berlin on 4 and 18 September, in which the opposition party Alternative for Germany (AfD) may be successful, will determine what the political landscape will be as Germany nears the Bundestag elections in autumn 2017. If Angela Merkel runs for the post of chancellor again, the elections will become a referendum of confidence in her. Merkel’s refugee policy has caused a serious backlash, weakening the chancellor’s position. At present, the AfD is ready to challenge the Christian Democrats. It may be recalled that the AfD won 24 percent of the vote in the Saxony-Anhalt state elections held in March 2016.


Regional elections are also set to take place in Spain’s Basque Country in September 2016. Experts predict that the Basque nationalists will retain power. In addition, the Podemos party, which, although in favour of maintaining the unity of Spain, is opposed to the austerity measures and spending cuts imposed on the country by its creditors, may improve its position. After the elections, the Basque nationalists will request more money and local empowerment from Madrid, giving new impetus to the separatists in Catalonia.

Early October will see the presidential elections in Austria repeated. The candidate from the Freedom Party of Austria, Norbert Hofer, has a reasonable chance of becoming president, although the contest promises to be a difficult one. Repeat elections were scheduled following a court ruling that annulled the result of the previous elections held on 22 May, in which the Green Party candidate, Alexander van der Bellen, narrowly beat Hofer.


Alexander van der Bellen, Norbert Hofer

October 2016 will also see a referendum on government reform in Italy. The proposed reform put forward by Prime Minister Matteo Renzi’s Democratic Party will strip the upper house of parliament of the ability to bring down governments. The number of senators would be cut by two-thirds. Bloomberg cites the results of a July public opinion poll showing that 35 percent of Italians oppose the reform, 29 percent support it, and 18 percent are undecided. Matteo Renzi has promised to resign if he loses the referendum. A political crisis, if it occurs, will benefit Italy’s Eurosceptic Five Star Movement, which is calling for a referendum on Italy’s membership of the eurozone. Moreover, the Five Star Movement is currently enjoying higher poll ratings than the ruling Democratic Party.

A referendum is also scheduled to take place in Hungary in October. Hungarians will answer the question: «Do you want the European Union to be entitled to prescribe the mandatory settlement of non-Hungarian citizens in Hungary without the consent of parliament?» Prime Minister Viktor Orban believes that «EU quotas for the distribution of refugees will spread terrorism around Europe». There is no doubting the outcome of the people’s will: the majority of Hungarians are against the arrival of refugees. The only issue is whether the turnout will be lower than 50 percent.

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There is something more to add to Bloomberg’s article.

According to the results of the Deutschland Trend poll for the public service broadcaster ARD published on 4 August, 47 percent of respondents said they were satisfied with Merkel’s work, 12 percent less than in July. Moreover, it is Merkel’s refugee policy that is causing the most dissatisfaction, with 67 percent of respondents saying they do not agree with it.

Following an article published in Der Spiegel in May, Germans now know that €93.6 billion will be spent on refugees by 2020. And this is just the tip of the iceberg when it comes to Germany’s economic problems. Between January and March, the country’s economy grew by 0.7 percent, but by May industrial production had started to decline. The Bundesbank cut its economic growth forecasts to 1.7 percent for the current year and to 1.4 percent for 2017. One of the main reasons is the difficult situation in emerging markets and the resulting decline in exports.

Economic worries are pushing banks to increase shady transactions. The stress test carried out by the ECB and the European Banking Authority (EBA) on the EU’s largest banks showed that Deutsche Bank was among the dozen worst-performing banks. The bank has a derivative exposure of €55 trillion, which is four times higher (!) than the combined GDP of the European Union. Quite simply, it is a financial time bomb.


As for Spain, it is Catalonia that is setting the tone for any possible political changes there. In late July, the Catalan Parliament endorsed the findings of a commission set up to study issues related to the region’s secession from Spain. Included in the commission’s findings are suggestions for a unilateral secession process and the adoption of a constitution for an independent Catalonia by referendum. Madrid appealed against Barcelona’s decision in the constitutional court, but apparently it is already too late to change anything. The September elections in the Basque Country will show how far the Basque people are willing to follow the path set by the Catalans.

With regard to Austria, it should be recalled why the results of the country’s presidential elections were annulled. The reason is extremely banal: in order to prevent a Eurosceptic from becoming head of state, the election results in the Alpine republic were rigged. In particular, it refers to the counting of ballots cast by post. The Austrian court could not fail to notice.

And in Italy, it is not just the Five Star Movement that is seeking to redefine relations with Brussels. Lega Nord, which cannot see a future for its country in the European Union, is seeking the same. As Lega Nord’s leader Matteo Salvini noted following the UK’s EU membership referendum, Italy will not be the last country to jump from the sinking ship that is the European Union. According to Salvini, the EU is acting as a «straitjacket» for Europe. We must live in Europe, says Salvini, but this is only possible without the European Union.

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Regarding the inevitable political changes in a number of European countries, the Bloomberg news agency is trying to scare its readers with the prospect of impending instability. But change is by no means synonymous with instability. It is the Europe we see today that is unstable. The imminent replacement of political elites will actually open up the way to a new stability.


Original article

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About the author

 Vladimir Nesterov is an independent analyst and researcher

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