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What’s Eating Europe?

December 5, 2018

This blog summarises the big issues that dominated #ESPAS18, the Conference of the European Strategy & Policy Analysis System, held in Brussels on 28/29 November.

The Rise of Populism

The rise of populist parties and politics within Europe and beyond is worrying the EU and its institutions.  Within Europe, the Governments of several Central European member states, Italy, and the rise of populist opposition in other states – not to mention the vote for Brexit in the UK and the gilets jaunes demonstrations in France – marks a challenging departure from the centrist liberal democratic values that underpin the EU.  The 2019 European Parliament Elections will be interesting. What if the populists win (unlikely but not impossible) or hold a large chunk of seats in the new Parliament (entirely possible)?

Beyond Europe’s borders, the election of President Trump, as well as other populists in Turkey, Brazil, the Philippines and elsewhere strengthens the feeling that existing multilateral institutions are under threat.

ESPAS heard evidence from Daniel Drezner, Prof of International Politics, Fletcher School of Law & Diplomacy, that populism in the US may be nearing its limits, and that it may be spawning a counter-reaction.  This was a welcome message to many at the Conference.  On the other hand, other speakers warned that things would get much more challenging.

Will Populism produce its own antibodies, or will the 4thIR fuel the continuing move away from multilateralism and the liberal consensus?

The 4thIndustrial Revolution and the Rise of the Global Corporations

Frans Timmermans, First Vice-President of the European Commission observed that the 4thIndustrial Revolution means different things to different blocs:

  • For China it’s about extending state control
  • For the US it’s about the growth and exercise of big US corporate power in the world
  • For Europe it’s about morality and democracy: if democracy can’t control the 4thIR, people will look elsewhere for answers

It seems likely that whatever meaning we place on it, the 4thIndustrial Revolution will usher in more disruptive change to people’s employment and standard of living, and the prospects of young people, who already suffer high rates of employment across the EU.  Those affected adversely will be more receptive to populist politics. The tide of populism may continue to rise.

The message of ESPAS was clear: we need to embrace the 4thIndustrial Revolution: change is inevitable.  But Europe’s desire to control and regulate it may be impossible in practice.  We heard that last year 40% of capital investment in AI went to China, 38% to the USA, and the remaining 22% was spread around the rest of the world including Europe.  If the US and/or China lead the 4thIndustrial Revolution, then it will be likely to have American and/or Chinese characteristics.

Will Europe be able to shape the 4thIR, or will it be swept along in its wake?

The Economic Outlook

There was some encouragement about the relative economic recovery in the state of the European economies, but speakers warned that much of the damage of the years since the crash had not yet been undone, and that there remain pockets of relative poverty, as well as high unemployment, and skewed patterns of debt across the Eurozone.

Looking to the future, Europe lags behind the US and China in investment in infrastructure and Research & Development (for example, the figures above on AI investment) and any rise in unemployment as a result of the 4thIndustrial Revolution will reduce the revenue from employment-linked taxes, which are currently 48% of revenue across the EU.  Where will Europe rank among the economic heavyweight contenders?

Will Europe rank among the economic heavyweight contenders or will it become an economic middleweight?

Europe in the World

Speakers from Asia and the Middle East observed that Europe had declining influence in the world. From being one of the main influences on developing nations and their politics and economics, Europe was now lagging far behind other powers.

Against this background, the competitive advantage enjoyed by the USA and China in AI and other cutting edge technologies suggests that Europe may be on a trajectory of declining influence.  This comes at a time of global threat, with the rise of non-state groups destabilising countries and regions, and the spread of frozen conflict, as well as the resurgence of Russia, and regional powers tempted to follow undemocratic models of governance. One speaker warned that Europe was ignoring the threat posed by Russia.  Others said that Europe has “gone to sleep” since 1989.

Europe is not alone in being concerned about this.  Liberals beyond Europe want to see Europe be more assertive in promoting its values.  And, from a US point of view, Bruce Stokes, Director, Global Economic Attitudes, the Pew Centre took an Atlanticist view, warning that the US and Europe were declining in influence, and therefore had very little time to seek to influence the upkeep (or reform) of multilateral rules-based global governance.

More encouragingly, we heard from E Gyima-Boadi, Director of Afrobarometer, that support for democracy in Africa is strong, about 70% (not following the downward trend in the west).  Also there is support (75%) for term limits for office holders, and a growing willingness to protest, especially among the rising numbers of middle class and young people.

Economics aside, what can and should Europe do to promote western liberal and democratic values?  What are the prospects of success?

The Demographics of the Global Village

Based on UN Demographic Projections, the West (Europe and North America) will comprise only 8% of the world’s population by the end of this century.  What price European values when the World is much more Asian and African, and the economic centre of power has shifted back to Asia (where it lay for centuries before the 1stIndustrial Revolution).

What Is to Be Done?

The mood at the Conference was mixed.  There was a sense among some of “declinism” – the sense that Europe has fallen behind the leaders, and will fall further back as the century progresses.  Others believed that European values were of a superior character, and could still win through. Clearly the EU wishes to do what it can to promote a multilateral, rules-based system of world governance based on liberal, democratic values and with proper transparency and accountability in place.  But does Europe have the economic heft and political will to rise to the challenge?

ps. Don’t mention the Brexit

Had there been British Brexiteers at the Conference, they might have been surprised and even perhaps disappointed at the lack of discussion of Brexit.  It featured in the various discussions of the rise of populism, and there was some regret at the UK’s imminent departure.  Ramon Valcarel Siso MEP, a Vice-President of the European Parliament, described Brexit as one of the saddest events in the history of the EU.  But the prevailing mood was that Brexit is a done deal, sad though it may be, and that Europe needs to focus its entire attention on these future challenges.

Written by David Lye, SAMI Fellow and Director 

The views expressed are those of the author and not necessarily of SAMI Consulting.

SAMI Consulting was founded in 1989 by Shell and St Andrews University. They have undertaken scenario planning projects for a wide range of UK and international organisations. Their core skill is providing the link between futures research and strategy.

If you enjoyed this blog from SAMI Consulting, the home of scenario planning, please sign up for our monthly newsletter at newreader@samiconsulting.co.uk and/or browse our website at http://www.samiconsulting.co.uk

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