Quartet of crises threatens Europe's core

Sun Jul 5, 2015 6:45am EDT
 
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By Paul Taylor

BRUSSELS (Reuters) - Four great crises around Europe's fringes threaten to engulf the European Union, potentially setting the ambitious post-war unification project back by decades.

The EU's unity, solidarity and international standing are at risk from Greece's debt, Russia's role in Ukraine, Britain's attempt to change its relationship with the bloc, and Mediterranean migration.

Failure to cope adequately with any one of these would worsen the others, amplifying the perils confronting "Project Europe".

Greece's default and the risk, dubbed 'Grexit', that it may crash out of the shared euro currency is the most immediate challenge to the long-standing notion of an "ever closer union" of European states and peoples.

"The longer-term consequences of Grexit would affect the European project as a whole. It would set a precedent and it would further undermine the raison d'être of the EU," Fabian Zuleeg and Janis Emmanouilidis wrote in an analysis for the European Policy Centre think-tank.

Though Greece accounts for barely 2 percent of the euro zone's economic output and of the EU's population, its state bankruptcy after two bailouts in which euro zone partners lent it nearly 200 billion euros ($220 billion) is a massive blow to EU prestige.

Even before the outcome of Sunday's Greek referendum was known, the atmosphere in Brussels was thick with recrimination - Greeks blaming Germans, most others blaming Greeks, Keynesian economists blaming a blinkered obsession with austerity, EU officials emphasizing the success of bailouts elsewhere in the bloc.

While its fate is still uncertain, Athens has already shown that the euro's founders were deluded when they declared that membership of Europe's single currency was unbreakable.   Continued...

 
A barbed wire is seen in front of a European Union flag at an immigration reception centre in Bicske, Hungary June 25, 2015. REUTERS/Laszlo Balogh