The EU can now survive anything after stress-tests of 2015

In recent years, there hasn’t been much to like about the EU, with its low growth, high unemployment, political squabbles, xenophobia, stifling bureaucracy, and constant threats of a breakup.

But 2015 may have been the year the EU pulled through the worst of its troubles. It has now been sufficiently stress-tested to survive anything.

There were three types of trials — the viability of the eurozone, the survival of Schengen borderless travel area, and the tension between member countries’ domestic politics and the union’s values.

  • This year, the euro break-up index, calculated by Sentix, a German company that measures investor sentiment, rose to the highest levels since its 2012 inception.

The probability of the currency union’s break-up looked very real in the spring and summer as Greece resisted attempts by northern European countries to force it into a managed bailout.

The Greeks, however, didn’t want to leave, and their firebrand government was forced to back down.

Greece experienced a 0.9% contraction in the third quarter of 2015 because of the upheavals that almost tore apart the eurozone, and economists expect its output to shrink 0.7% for the year.

Although Greeks have the least positive opinion of any EU citizens — just 22% say they like it — they have accepted EU aid and are more or less gamely taking their bitter medicine.

The third Greek bailout is ugly, contentious, and even outrageous to some both inside and outside Greece, but it reflects the Greeks’ preference for keeping the common currency.

The euro lost just 10% of its value against the dollar, and its share in global foreign exchange reserves only dropped to 20.3% in the first three quarters of 2015, from 22%, according to IMF data.

The Danish and Norwegian krones, the Australian, Canadian, and New Zealand dollars — all retreated more this year.

  • As refugees from Syria, Iraq, Afghanistan and other Middle Eastern war areas flooded into Europe, one of the united continent’s achievements, borderless travel, seemed in jeopardy. And yet the Schengen agreement, which allows travellers avoid passport checks between European countries, has not been suspended.

Mild border controls were introduced in some parts of Europe this year, but that was mainly a response to the bureaucratic overload that the refugee influx created, and to appease fears fuelled by the media.

Europeans, according to the Eurobarometer survey, are highly unwilling to give up their freedom of travel.

Europe has been groping for solutions. It has promised Turkey €3 billion to make a better effort to keep refugees in their camps, and it has decided to invest more in common border protection.

It’s not clear how well that will work. For January through September, 2,980 people drowned in the Mediterranean, according to the UN.

In the two and a half months that followed, there were 645 casualties — a rate of eight deaths a day, compared with 11 earlier this year.

  • The refugee influx, however, has been a huge political test for the EU.

So far, its older and stronger members have passed it with good grades. Eastern Europe has buckled.

Xenophobic parties were dealt heavy blows — in western Europe. UKIP won just one seat in the UK general election in May.

France’s National Front failed to win a single region in regional elections.

Germany didn’t have a big election, but despite all the worry about the refugees, the Alternative fuer Deutschland party, which would like to keep them out, consistently polls below 10%, enough to get it into parliament but too little for real influence.

The only EU country where radicals — in this case, xenophobic ones — won big this year is Poland. Jaroslaw Kaczynski, the de facto leader of the ruling Law and Justice party, has even warned Poles that refugees carried “all sorts of parasites and bacteria.”

The EU and its most important institutions have enough support, and enough common sense built into them, to outlive their critics. Now is a moment for retrenchment, not expansion or major progress in unification — but Europe is a long-term project.


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