Panel, Conference Presentation
Europe: Past Tense, Future Perfect?
Milken InstituteStephanie Flanders, Jyrki Katainen, Mikhail Khodorkovsky, Yascha Mounk, Howard Shore, Timothy Snyder
- Economic outlook for the Eurozone is described as "quite positive" with growth occurring following an "extra recession," though GDP per capita in Eurozone countries is only just recovering to pre-crisis levels, with full economic recovery attributed to global growth and structural reforms implemented by member states.
- Political dynamics are characterized by a resurgence of European political ownership and increased public support for the European project, yet this is counterbalanced by significant internal pressures, including a rise in populism which has increased its average vote share from 8% in 2000 to 25% currently and is now considered a more immediate threat to EU legitimacy than Brexit.
- Populist parties are expected to form governments in Western European countries soon, with specific attention noted on Italy, while forces in Poland and Hungary are aligned with the Kremlin, raising concerns about democratic backsliding and the potential suspension of EU budget funds through a coming rule of law mechanism.
- Future economic challenges include the difficulty of structurally reforming nations like France against public resistance regarding jobs and lifestyle, skepticism regarding the political viability of a fiscal union to subsidize poorer regions, and the view that uncontrolled mass immigration may not enhance GDP per capita.
- Strategic expectations involve the European Commission releasing a proposal for the next seven-year budget containing rule of law enforcement, a need for France and Germany to define a creative vision for Europe over the next five to ten years, and the belief that without a European common space to address stagnating living standards and social media influence, populist forces will continue to grow.
- External dependencies and security risks are highlighted by Europe's continued serious dependence on Russian energy sources for at least the next 20 years, the influence of bots and cyber threats on public opinion as seen in Brexit, and the expectation that younger generations are more skeptical of both the EU and democracy than older ones.
- Institutional limitations acknowledge that the European Commission cannot unilaterally expel member states as the process requires unanimous support from all members, while citizens are increasingly expecting deeper integration in digital single markets, capital markets, energy unions, and a safer currency union to address major challenges that individual member states cannot handle alone.