Davos: What's next for the European Union
World Economic Forum 2019: what next for the European Union?
Brexit has cast a dark shadow over this year’s World Economic Forum (WEF) in Davos, Switzerland.
Amidst increased global economic instability, the gathering of business, political and cultural leaders tackled a range of difficult subjects that included climate change, human capital and the future of work, but it was Britain’s departure from the European Union that stole the headlines.
With the possibility of a no-deal Brexit increasing every day, the potential impact on the global economy was in question from the start of the summit, with German Chancellor Angela Merkel raising her concerns about growing fragmentation across Europe.
These concerns were echoed by Angel Gurria, secretary general of the Organisation for Economic Co-operation and Development (OECD), who suggested the UK’s departure from the EU is a systemic issue, with far reaching consequences. Despite the fact that Brexit’s economic impact will unfold gradually, there will be thousands of questions about the fallout, Gurria argued.
Barclays Private Bank CEO, Karen Frank, said: “While we seek certainty for the sake of our clients, we are prepared for any eventuality.”
The change needed to reinvigorate a unified Europe is a question on everyone’s lips.
‘The future will be better tomorrow’
In a panel titled ‘Averting peak Europe’, it was announced that only 32% of European citizens agree that “things are moving in the right direction in the EU”, according to a representative survey.
Ivan Krastev, chairman for the Centre for Liberal Strategies, pointed out that 100 years ago, Europe was the centre of the world. “It was much more important demographically and economically - it was the model everyone was looking to,” said Krastev.
“In 25-30 years less than 7% of the population will be Europeans, so from this point of view, it will be a much more pluralistic world,” said Krastev. Europe, in its most traditional sense, may have already ‘peaked’.
Krastev thinks that we could start to see Europeans lose a certain level of influence but on the other hand, Europe could be a lot more interesting than it was 100 years ago.
“The future will be better tomorrow,” he added.
A healthy crisis
Roger Köppel, member of the National Council, Swiss Parliament, argued that, despite the growing and alarming discontent among many people who don’t identify with the institutional framework of the EU, it is still here to stay.
“Europe is one of the most resilient continents in history, it has produced a lot of catastrophes throughout its history but it has overcome these catastrophes, however big,” he said.
For Köppel the fundamental flaws are in the framework of the EU, which is institutionally stuck between a union of states and a federal state.
“Institutionally, it hasn’t decided whether it’s heading towards a nation state of Europe or a more multinational state union of different states. Therefore you get a lot of problems with responsibility,” Köppel explained.
“I think that we are in a potentially dangerous period, but it’s also a healthy crisis because the politicians and the people start to address these flaws,” argued Köppel.
He believes the solution will be that the European Union will have to give more power, weight and responsibility back to the nation state members.
For other speakers, however, including Ulrike Guérot, Professor and Director of European Policy, Danube University Krems, the nation state was “not the strategy for survival”.
“If you reason that the national state is the solution, what the Brits wanted was more of a nation state, that’s why they had the referendum,” Guerot claims. ”What they’ve got is basically the implosion of the nation state.”
The movement of people
It could be argued that the rise of populism throughout the last few years was a reaction against the free movement of people within the EU and rising concerns about national identity.
The internet, modern technology and a shift in the skills required for the modern workforce may only have added fuel to the fire.
Ivan Krastev explained that Central and Eastern European countries tend to be very ethnically homogeneous societies with, for example, more than 96% of the population of Poland being of Polish origin.
Krastev argues that due to the interconnected nature of today’s global society, “everyone is comparing their lives with those who have the best lives - many of these are living in the west.”
“As a result, if you’re a young person living in the third world, if you’re living in a very poor country, a badly governed country, is it more rational to try to change your government or try to change your country?
“Suddenly people have realized that in the 21st century, strangely enough, migration is becoming a new form of revolutionary behavior because you are basically saying, if you want to make a change in one generation, (you have to) move”.
Karen Frank concluded: “We believe that discussion is the first step in gaining deeper understanding of complex geopolitical developments. As such, Barclays remains at the forefront of these challenging conversations.”
Any views expressed may differ from those of Barclays. All opinions and estimates are given as of the date hereof and are subject to change. No representation is made as to the accuracy of the assumptions made within. Barclays is not responsible for information stated to be obtained or derived from third party sources or statistical services.
Barclays is not offering to sell or seeking offers to buy any product or enter into any transaction. Any offer or entry into any transaction requires Barclays’ subsequent formal agreement which will be subject to internal approvals and execution of binding transaction documents. Neither Barclays nor any of its directors, officers, employees, representatives or agents, accepts any liability whatsoever for any direct, indirect or consequential losses (in contract, tort or otherwise) arising from the use of this communication or its contents or reliance on the information contained herein, except to the extent this would be prohibited by law or regulation.
Barclays is not obliged to inform the recipients of this communication of any change to such opinions or estimates. THIS COMMUNICATION IS PROVIDED FOR INFORMATION PURPOSES ONLY AND IT IS SUBJECT TO CHANGE. IT IS INDICATIVE ONLY AND IS NOT BINDING.