Mujtaba Rahman, managing director for Europe at Eurasia Group (r) and Kathimerini journalist Yannis Palaiologos discuss ‘2019 Risks in Europe.’
European dilemmas and prospects forged by Brexit, the rise of populist nationalism and the growing geopolitical and technological competition between the US and China were at the focus of discussions on the second day of the Delphi Economic Forum, which also hosted a speech by Prime Minister Alexis Tsipras and a discussion earlier between conservative opposition leader Kyriakos Mitsotakis and Financial Times news editor Peter Spiegel. The New Democracy chief acknowledged that the next government will have to maneuver in a context of greater economic and political instability in Europe.
Speaking during a session on the risks facing Europe in 2019, Mujtaba Rahman, managing director for Europe at Eurasia Group, said that the Franco-German axis will continue to drag its feet. French President Emmanuel Macron’s political recovery, with the slowing momentum of the yellow vests movement, does not seem to have been followed by any considerable eurozone initiatives, said Rahman. The reason, he said, is that Germany is undergoing an extended transitional stage from the Merkel to the post-Merkel situation. Meanwhile, he added, the grand coalition is showing signs of collapse, particularly in light of bad polls for the country’s center-left Social Democrats (SPD). Rahman said the strengthening of populist nationalist parties after May’s European Parliament elections will further complicate decision-making in Brussels, also on issues where the Euro-assembly has no veto powers, such as migration. The Eurasia analyst predicted that Italy will not trigger a systemic eurozone crisis this year. However, he did predict that League leader Matteo Salvini, whom he described as “perhaps the most significant politician in Europe at the moment,” will continue to gain ground inside the country’s ruling coalition. The League, which is likely to emerge as the second biggest faction in the European Parliament, could trigger a snap poll in Italy by the end of the year with Salvini emerging as prime minister, according to Eurasia.
Speaking of Macron, his former aide Jean Pisani-Ferry said that the French president has “partially recovered.” However, the French economist and public policy expert stressed that the real danger exposed by the yellow vests movement is that the chasm between the political system and the people is growing. Macron, he said, only dominates a narrow political space and must urgently “reconnect” with the economically weaker half of the French population who feel ignored and see him as the “president of the rich.” In order to achieve this, Pisani-Ferry said, Macron must place emphasis on empowerment such as lifelong training courses, which was part of his campaign program.
In the early morning panel titled “Where is Europe Heading,” Loukas Tsoukalis of the Hellenic Foundation for European and Foreign Policy (ELIAMEP) outlined what the EU’s priorities should be at the current conjecture: banking union, strengthening the EMU and, secondarily, introducing Europe-wide socially minded policies. “Europe needs a more powerful social dimension,” he said. Daniela Schwarzer, director of the German Council on Foreign Relations, discussed European security and defense cooperation. The German chancellor, Schwarzer said, referred to the need of European initiatives in these areas during her speech at the recent security conference in Munich, but she still has to come up with a more detailed road map.