As the European Union celebrates its 50th birthday, one Europe-watcher imagines its next 20 yearsby Charles Grant / April 29, 2007 / Leave a comment
Published in April 2007 issue of Prospect Magazine
Given how much respect most Europeans feel for the EU today in March 2027, one can easily forget that when it celebrated its 50th birthday, in 2007, it was widely mistrusted. When given the chance to vote on the EU in referendums, people usually gave it the thumbs down. The EU passed through its darkest moments at the end of the first decade of the 21st century.
Britain and France caused many of the problems. The British, under successive governments led by Gordon Brown and David Cameron, blocked significant changes to the EU treaties, even where there was a clear need for institutional reform. Britain thus marginalised itself from mainstream European debates, but the others moved on, setting up avant-garde groups without the British. France also proved destructive, blocking freer trade, deregulation, enlargement and farm policy reform.
But around 2010, the EU’s fortunes started to revive, for four reasons. The first of these was economic. The root of the earlier malaise had been the high unemployment and slow growth in many countries that made people fearful of change—whether market liberalisation, more open trade, EU enlargement or new treaties. But the Italian crisis of 2009 proved a turning point. After the collapse of the centre-left government led to political chaos, financial markets started to fear that Italy was incapable of structural economic reform. With its exports decreasingly competitive, Italy’s current account deficit and foreign debt soared. Foreign investors insisted on a hefty premium before lending to Italy. Leaders on the nationalist right and the hard left called for the country to quit the euro, devalue and repudiate foreign debt. With that outcome looking likely, financial markets started to view Greece, Spain and Portugal—which had also lost much competitiveness—as potential quitters of the euro.