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Crisis in Europe: meeting the challenges

Venice, 30/09/2022 - 02/10/2022, National Interest

The war in Ukraine is an existential one for Vladimir Putin. If he loses it, he loses his power, which is why he is willing to use every means possible to divide Europeans, using energy as a geopolitical weapon. It is no accident that the Zaporizhzhia nuclear plant, now under Russian control, is Europe’s largest and perfectly integrated into the European grid. Europeans, for their part, are dealing with a structural shift in balances that the war has pushed eastward. Poland’s role is growing, a fact that Italy could take advantage of and that could also aid in defusing an additional risk to its foreign policy, i.e. the predictable exposure of its southern flank – the Mediterranean.

Europe has always expanded by means of separate accelerations that have often provided strong impetus to institutional change. The pandemic, for example, led to a solidarity-based approach that concretized in the joint acquisition of vaccines. European advancement needs strategic adjustments along the way, such as institutional reform and the launch of a European Constitution; even though, as some maintain, the time is not right for steps such as these. Another proposal that emerged was for the creation of a second chamber of representatives of the European civil society. Many are hoping in the elimination of the unanimity criterion, which slows institutions’ operational capacity, and in a strengthening of the powers of the European Parliament. Not all agree however. According to some, this is not the moment for reforms of this sort.

While solidarity was key to confronting the pandemic, methods differ considerably when it comes to the economic and, above all, energy crises. In 2020, Berlin and Paris were pushing for common conclusions, but policies have changed in 2022. In particular, the Germans’ allotment of 200 billion euro for their energy emergency and veto of a European level gas price cap has foregrounded autonomous solutions. It is not easy to get Europe to muster the same solidarity it showed during the pandemic, yet some advances have been and can continue to be made. The NextGenerationEU, for instance, has made it possible to bridge the North-South divide; the 400 billion euro still to be spent of the European Stability Mechanism (ESM), whose the facility for the pandemic will close at year’s end, could be repurposed for confronting the energy crisis, along with the SURE resources.

Wedged between China and the United States, the two major powers of the present and the future, in the absence of strong leadership and strategic autonomy Europe is destined for decline. Strategic autonomy, militarily in the first place, in the hopes of building a European armed force in which the various defense forces can be united while, at the same time, developing complementarity with NATO. The war in Ukraine has led to powerful rearmament in Germany, which has already earmarked twice the resources of Russia and many more than France’s. 

Equally important is a technological autonomy that makes the creation of a European “cloud” possible, as well as the further development of artificial intelligence; this without falling into the trap of hyper-regulation, which is often among the suspected reasons for the failure to produce European corporate champions. Reflection should also go to the spike in inflation, which must be kept under control since according to some, Europe runs the risk of a scenario that calls to mind the cautionary tale of the Weimar Republic. Inflation – which is nearing 11% – has also triggered a sharp rise in inequality. This not only in numerical terms but also in qualitative ones. At the start of the new millennium, the poor were mostly the elderly while today they are families with children. According to ISTAT, in 2021 there were an additional million people living in extreme poverty in Italy and only 380,000 new births, a demographic decline that sparks concern for the sustainability of a social welfare system centered essentially on pensions. 

Europe as a whole lacks a basic theoretical/philosophical foundation on which to erect a new social architecture; a compass by which to orient so many individual and uncoordinated provisions. Missing too is an industrial policy to go hand in hand with political decisions, a good example of which is a recent decision regarding the automotive industry – i.e., if Europe promotes electric vehicles, but the Chinese have a monopoly on the batteries they need, then its automotive industry will obviously be placed at a disadvantage.

The strength of the European identity will therefore depend on strategic autonomy and technology and on the greater development of the internal market, completion of the banking union, fiscal reform, the launch of the digital currency and the reinforcement of culture and rights. Remaining strategic is the trans-Atlantic relationship, which needs to be perceived differently, i.e., not as essentially a military identification with NATO but rather as an expression of the combined values that characterize the West. Nevertheless, considering the fact that as a result of the deep demographic slump, by 2050 only 7% (today’s 25%) of the world’s population will be calling itself Western, it is unclear whether such a limited percentage will have the strength to bring those values to bear globally.

As Barack Obama once said, the crisis of globalization “is not the end of the world, but the end of a world”. This reshuffling of global governance is happening at a difficult moment for Europe. The complex workings of global governance by now appear to depend on the capacity for dialogue between the United States and China. One long-term problem seems clear: while China’s political approach remains constant, that of the US is still too fragmented and variable. The longer the war lasts the more Russia will be able to count on a weakening of European society’s resolve owing to the energy shortages.  For the moment, the two powers do seem to agree on one thing: the time is not yet ripe to bring peace back to Ukraine.  More information should come out of the imminent Chinese Communist Party National Congress and after the American midterm elections in November.