Looking back at major challenges to the EU in 2015

Looking back at major challenges to the EU in 2015

In 2015, the EU was faced with a set of unprecedented crises that shook it to its core. This situation offers an opportunity for public and private actors to implement much-needed reforms.

2015 could be remembered as the European Union (EU)’s annus horribilis. A string of crises and tragedies shook the EU to its core, challenging its financial, political, social, and security foundations.

The situation that governments, market leaders, civil societies and citizens will find on the morning of January 1st 2016 is a stern one. It will also offer a set of unique opportunities that if properly exploited could lead to a growth in the private sector and a consolidation of the European social and liberal values.

  1. The Greek Crisis: The Euro on the Brink

Between June and July 2015, it appeared that the divergences separating the Greek far-left Tsipras government and its EU and international interlocutors had the potential of leading to a sovereign debt default.

Such an outcome would have endangered the financial stability of the EU and threatened the long-term viability of the Euro. The July 6th referendum sent shock waves, highlighting the animosity separating the Greek voters from the rest of the EU.

However, Prime Minister Tsipras managed to stir away from the radical ideology of a fringe of his cabinet and came to an agreement with international creditors. Reinstated as Prime Minister following a snap election, Tsipras has been trying to push forward socio-economic reforms requested by the EU. As such, the liberalisation of the Greek economy, coupled with a more open stance on privatisation of public services, opened the door to international private investments.

The ongoing reforms are a positive step in a large-scale program aimed at reviving the Greek economy.

However, questions remain concerning Tsipras’ ability to fully achieve the necessary changes and the risk posed by the current social anger caused by the liberalisation of the economy.

  1. The Migrant Crisis: Challenging Schengen

The illegal entry of hundreds of thousands of migrants within the EU has put a strain on the union’s free movement concept and underscores the shortcomings of the Schengen agreement.

The repercussions of the ongoing migrant crisis are threefold. Throughout the summer of 2015, it has been clear that the EU lacks a comprehensive border security policy at the periphery of its territory. The migrant crisis also highlights the absence of a cohesive refugee policy within the Union, something that generates major political tensions between western and eastern European states. It also served as a reminder of the issues linked to the uncontrolled free-movement of undocumented people within the EU.

As such, the implementation of short-term border control policies between member states was initially seen as an overall failure of the EU. However, it opens the door to a comprehensive debate concerning a reform of the Schengen agreement that would strengthen and modernise the EU’s free-movement policy.

  1. Terror Shakes Europe

The Islamist terrorist attacks in Paris highlight a wider threat faced by EU countries. While not on the scale of the deadly massacres experienced by the French capital, the February shootings in Copenhagen and the December stabbing in London underscore the evolution of the terrorist threat faced by the EU.

On the one hand, the Islamic State (IS) ideology was behind the fragmentation of the threat groups and the creation of a wide pool of potential lone-wolf attackers.

On the other, the 13 November attacks marked a strategic shift in the terror menace in Europe and raised the potential of additional coordinated and complex attacks. This situation sparks the necessity of an EU wide reform of security and intelligence gathering measures. In addition, it opens the door for an expansion of private sector services in the fields of duty of care, travel security and employee safety.

As such, 2016 will potentially see a growth for companies providing technology-driven safety and security consulting services aimed at mitigating the risk faced by business travellers and enabling managers to promptly locate and interact with their travelling employees.

  1. The Strengthening of Nationalist Parties

The December French regional elections underscored an EU-wide 2015 tendency. Nationalist and conservative parties have been gaining ground in several member states.

The French political spectrum was profoundly shaken by the effective installment of a three-party system. The strengthening of far-right parties generates an underlying political risk and challenges the stability of the EU and its institutions as nationalist parties tend to run on a mainly Eurosceptic agenda. At this point, this situation provides centre-right and centre-left parties with the possibility to reform and re-adapt their messages. In addition, it invites business associations, such as the French MEDEF, to play an active role in the defence of liberal economic policies.

  1. The Ukrainian Conflict Stagnates

One of the most positive developments of 2015 was the ability of the EU and the region’s main powers to relatively defuse the conflict situation in eastern Ukraine. The implementation of the Minsk II Agreement by all parties raised hopes of a potential draw down in fighting and an overall de-escalation in the Donetsk and Luhansk regions.

However, small-scale fighting persists and Ukrainian forces as well as pro-Russia separatists maintain antagonist positions. As such, the conflict is far from solved and continues to threaten the stability of Ukraine. This being said, the major structural reforms that Kiev needs to implement to solve its economic woes are a potential opportunity for private actors involved in EU-backed projects linked to the liberalisation of the Ukrainian economy and the development of good governance practices.

Categories: Europe, Politics

About Author

Riccardo Dugulin

Riccardo Dugulin is an analyst at Drum Cussac, a global business risk consultancy. He specializes in supporting international organizations and large corporations operating in emerging markets by providing them with critical risk management intelligence. His regions of expertise are the Near East, the Gulf, North Africa and Continental Europe. He previously worked as project manager for a French medical assistance company. He gained field experience in the Middle East having worked for leading think tanks in Dubai and Beirut. Riccardo holds a Master in International Affairs from the Sciences Po – Paris and a Bachelor in Middle Eastern Studies from the same university. Follow him on Twitter @RiccardoDugulin.