Paddy Agnew: ‘Europe 2019: In freefall or heading for recovery at last?’

Paddy Agnew: ‘Europe 2019: In freefall or heading for recovery at last?’

The beggars and protesters on the streets of Europe are an embodiment of the crisis gripping the EU, writes Paddy Agnew

Protest: Sarajevo residents gather on December 25 in a show a solidarity with demonstrations in the city of Banja Luka over the unresolved death of David Dragicevic (22) in March 2018. Photo: Getty Images
Protest: Sarajevo residents gather on December 25 in a show a solidarity with demonstrations in the city of Banja Luka over the unresolved death of David Dragicevic (22) in March 2018. Photo: Getty Images

Under the arcade in front of the Moustakas ‘Toys & Bebe’ shop on central Ermou Street in Athens, there is a long row of the homeless, sleeping out in their now all too familiar jumble of blankets, heavy coats and cardboard boxes. To some extent, they are the living expression of the crisis that has gripped Greece and the EU for most of the past decade.

Just a few yards around the corner, you walk into the lively Monastiraki Square, bustling with tourists, street artists, dancers, pretzel stalls and one homeless person who shouts to himself, then dances and is basically ignored in the busy evening rush. Above the square, seemingly watching over the city from its lofty purchase, is the magnificent Parthenon, glowing in the sunshine on the Acropolis hill, the very symbol of Greek, and indeed world, civilisation.

The contrast is all around you. Walk just five minutes in a straight line up Ermou Street and you arrive in Syntagma Square, site of the Greek parliament. This is the building in front of which those famously goose-stepping ‘Evzones’ (soldiers) march slowly up and down in their operatic costumes of tasselled caps, kilt and woolly leggings.

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Just off parliament square is Zonars Cafe, an exclusive marble-lined monument to 1930s’ style, once frequented by shakers and makers such as Melina Mercouri, Sophia Loren and Anthony Quinn. In here, the cost of an average drink would represent a good day’s work for some of the folks camped out at the toy shop down the road.

Walking around the teeming centre of Athens, you come across a lot of beggars. Mind you, that is true of many a modern metropolis. The thing about Athens, though, is that when you are wandering around the city centre, trying to find the road you took the night before, you are sometimes helped by finding a particular beggar stationed in exactly the place he was in last night, a sort of city sentinel.

Athens, however, is nothing exceptional or unique. As we head into 2019, our immediate future is clearly, dramatically and sometimes violently marked by the profound fracture created by what Christine Lagarde no less, the managing director of the International Monetary Fund, prosaically terms “income inequality”.

Put simply, in a world where, in 2017, 80pc of the wealth was in the hands of just 1pc of the population, the rich keep on getting richer and the poor poorer.

As Europe heads into a potentially turbulent 2019, that same “income inequality” seems certain to play a major role, perhaps even of the violent type which has seen two bomb attacks here in central Athens in the past two weeks (fortunately without loss of life).

For two years now, from that landmark 2016 when first the Brexit referendum and then the election of US President Donald Trump underlined the concept of an alienated, angry electorate from the “left-behind periphery”, European politics has seemed set for a change. Will the emblematic, sometimes violent “Gilets Jaunes” protests in France spark more of the same all over the old continent in 2019?

Essentially, the sense of deep malaise that has got people out on the streets in recent weeks in France, Belgium, Poland, Hungary, Italy and Romania stems from dissatisfaction about major issues, be it migration control, youth unemployment, lack of job security, pensions, taxation or social justice. In some way, however, all these issues clearly relate to the fundamental issue of wealth inequality or indeed wealth redistribution.

When Romania takes over the European Union Presidency next month, there will be any number of complex issues coming across the Presidency desk. It requires no genius to conclude that two of the biggest headaches will be the negative impact of both Brexit and the Trump presidency. Even if the ongoing migration crisis is a much bigger EU problem, on a day-to-day basis, the long-term impact of Brexit allied to that of the likely foreign and trade policies of the Trump presidency suggest a scenario of instability, both politically and in the markets.

In case anyone had failed to take the point, it was spelt out loud and clear last week by the heads of German industry. Europe’s largest economy, the traditional engine of the EU, is expected to post its weakest growth rate in many years in 2018. That is the not unexpected bad news.

The good news, according to a survey conducted by Reuters, is that the heads of Germany’s leading industry associations do not expect a recession, but rather a solid growth rate of around 1.5pc for 2019. Not surprisingly, Dieter Kempf, head of the BDI, the German Federation of Industries, qualified that view, telling Reuters: “The biggest risk in the short term is Brexit” – an obvious reference to the damaging impact, Europe wide, of a UK “crash-out”.

If Brexit is the biggest short-term risk, it wins that contest by less than a short-head from The Donald. It is obvious that if, as seems to be his intent, President Trump pursues a trade and tariff policy that can only escalate international trade disputes (with China, with Germany and probably with everyone else), then we are headed for trouble, worldwide.

All of the above, however obvious and however widely predicted, is far beyond the control of the EU citizen in the street. If the “Gilets Jaunes” represent any sense of change, then that has come through people taking to the European streets in a way that has not been seen since perhaps 1968. Confused and much aided by social media, angry Europeans are making themselves heard.

In the streets of Budapest in recent days, thousands of demonstrators from the right and the left have protested against the so-called “Slave Law”, legislation proposed by the government of Viktor Orban which essentially enforces an annual 400 hours of overtime. In an emblematic quote that might apply to many other European countries, one protester told CNN: “I protest because our parents left a free and democratic country for us in 1990 and now we are at their age and we are learning again how to fear… I protest because they stole our past, our present and the future of our children.”

In Warsaw last summer, they were out on the streets protesting about political appointments to the Supreme Court, appointments that have caused tensions with the EU. At the same moment, on the streets of Bucharest, people were protesting against corruption and low wages.

Christmas Day in Bosnia last week was marked by street protests, sparked essentially by two fathers, who had both looked for information about their respective sons’ unexplained deaths. Their search has turned into an anti-government movement.

The point is, of course, is that be it Bucharest, be it Banja Luka or Budapest or Warsaw, the demonstrators were all met with either tear gas, water cannon or arrests, or indeed all three. Even the EU office in the Bosnian capital Sarajevo was forced to comment: “It is striking that two fathers in search of justice for their dead sons have mobilised more outcry against the lack of the rule of law and against impunity in Bosnia Herzegovina than any political party has managed to do.”

The list of European countries where there is plenty of potential “trouble at t’mill” does not end there. What is sure, however, is that the slide of countries such as Hungary, Poland and the Czech Republic in the direction of protectionism, barrier building and far-right nationalism could prove highly problematic for the EU.

As if “Gilets Jaunes” instability in France, the prospect of an Angela Merkel-less Germany and an Italian government in budget default were not a heavy enough burden to add to the EU’s lot in 2019, there are also some interesting items thrown up by the calendar.

For a start, there are the Euro elections in May, elections which will almost certainly completely reshape the European Commission and the European Parliament. Not only does the reign of EC President Jean-Claude Juncker end next year but so too does that of Italian Mario Draghi, the quantitative-easing Miracle Man, at the European Central Bank (ECB).

Then too, next month, the euro celebrates its 20th birthday. That anniversary will doubtless be marked by an avalanche of commentators wanting to tell us yet again that (a) the euro was fatally ill-conceived at birth, (b) the euro is the EU’s biggest problem, (c) Southern Europe was never meant to join the euro and much else besides. Maybe such critics have a point but, sometimes, it sounds more like sour grapes.

All of the above does not tell the whole story, however. 2019 could still be positive for Europe and the EU, Trump and Brexit notwithstanding. For a start, with the USA about to renege on its role of “world policeman”, the EU needs to redefine its world role by becoming politically much more active on a 360-degree basis. In that way, the EU could go some way to compensating for the loss of its most important post-World War II ally.

Secondly, the “Gilets Jaunes” in France, the “No Tavs” in Italy, the “Merry Christmas Mr Prime Minister” protesters in Budapest are, like them or not, all healthy expressions of democracy. They are not necessarily left or right, but they do, by and large, represent the interests of labour against capital, the periphery against the centre, the countryside against the metropolis and indeed the people against the governing classes, even where some of those governing classes are clearly “populist”. In all those ways, they represent a changing Europe and the ruling classes need to play a lot of catch-up.

A final thought. Despite all that has happened in the past two years, a battery of research shows that, in the wake of Brexit and Trump, EU approval ratings have greatly improved. The Commission’s Euro-barometer surveys show that while 32pc of EU citizens expressed their trust in the EU in the autumn of 2015, by Christmas 2016 that figure had risen to 42pc, inspired no doubt by the spectre of Messers Trump, Johnson, May, Bannon et al.

Despite everything, the EU 27 have remained united, ever marching in lockstep. The EU has not collapsed.

Indeed, 2019 could be the year that another union, that of Great Britain and Northern Ireland, suffers more stress than the EU. Darken the lights, turn up the volume and bring on the good old Ode to Joy from Beethoven’s 9th Symphony… and to hell with the Brexiteers.

Sunday Independent

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