The coronavirus crisis has caused significant socio-economic shifts in Western and Northern Europe. According to the European Central Bank, the EU had to allocate EUR 3.7 trillion for European economy support and post-pandemic recovery over the first three quarters of 2020. What awaits the EU in 2021?
Sudden additional costs have become a burden on the EU and are likely to have long-term consequences for the Eurozone. We wrote in the last year’s forecast that the main task for Western European countries was to find an acceptable and universal model that would maintain the pace of economic growth and its position in the innovative core of world leaders, while preserving the integrity of the European Union and avoiding centrifugal tendencies against the background of intensified competition between the member states themselves. The outbreak of the coronavirus pandemic makes this task even more difficult because of intensified competition and national selfishness, as well as additional financial burden that the population will feel for several years ahead.
Coronavirus has also put the EU reform debate on the back burner and slowed down the integration projects within the Union.
After Britain withdrew from the EU on 31 January, EU’s center of gravity ultimately shifted towards France and Germany, which set the course for Brussels over 2020.
However, the confidence in this course will weaken in 2021. Germany will enter a period of political uncertainty: the era of Angela Merkel is coming to a close, and parliamentary elections will be held in the country.
The coronavirus pandemic has launched a severe blow to the EU economy, though Berlin has struggled to pull it out of the crisis and prevent it from spiraling out of control. During the summits of the EU member states in April and July, when there was a heated debate over the allocation of budget funds for post-pandemic recovery, it was the position of Germany that became decisive in political decision-making.
For Germany, the integrity and stability of the European Union remains a top priority of foreign policy. Amid the severe spring lockdown of 2020 and the economic downturn, social radicalisation of citizens on the one hand (large-scale anti-government protests near the Reichstag building) and political polarisation on the other, which led to the rise of extremism in all its forms, were particularly pronounced.
The far-right shooting in Hanau and the Islamist attack on passers-by in Dresden came as the tragic consequences.
France is currently experiencing domestic political upheavals: rise of extremism, heightened regional imbalances between the centre and the province, unresolved trade union claims to the presidential programme, and tense geopolitical struggle in its former colonies. Among all European countries, France is most sensitive to the gradual shift of the global centre of power from Europe to Asia. The country, which has not come to terms with the disappearance of its empire, sees these transformations as a further danger to its extensive network of influence within the Francophonie. President of France Emmanuel Macron has ambitions and intentions to regain the former greatness and power of his country, restore its reputation and authority in the former colonies of North Africa and the Sahel.
In the United Kingdom, 2021 will mark the quest for itself after the Brexit saga is finally over. At the end of 2020, the transition period ended, during which London had to agree with Brussels on the terms of the country’s gradual withdrawal from the EU.
In addition, Britain could face two major political upheavals in 2021 – the escalation in Northern Ireland if the issue of the border with Ireland is not resolved in negotiations with the EU and a possible second referendum on Scottish independence announced by nationalist leader Nicola Sturgeon.