This is Part 1 of an 8-part series of short articles by EWI's Head of Global Research, Murray Gunn. Murray is based in London, where he documents the issues jeopardizing Europe in a much greater detail than you hear about on this side of the Atlantic. Murray also puts his conclusions in a social mood, or socionomic, perspective. It's an eye-witness series you don't want to miss.

A Decisive Moment for Europe: Part 1

The next few months could be critical for the EU's history

by Murray Gunn
Updated: April 12, 2019

The European project is under increasing pressure. Having managed to escape the Brexit chaos in London for a few days, I am writing this from the peaceful setting of the Pyrenees mountain range, the formidable barrier that has separated Spain from France and the rest of Europe for millennia. Idyllic it may be, but it can't escape the tensions emanating throughout Europe. Driving down from Toulouse airport, amidst beautiful rolling foothills of the mountain range, we came across a mass protest of crawling traffic -- the Gilets Jaunes, aka Yellow Vests. Disgruntlement in France, it seems, is most certainly not confined to metropolitan areas.

The European Parliament elections next month are building up to become a decisive moment in European history, influenced by the now-old-enough-to-vote negative-mood trend reflected by the Euro Stoxx 50's downtrend over the past 19 years.

There has been a well-organized campaign, involving the Machiavellian character of former Donald Trump aide Steve Bannon, to galvanize the right-wing, anti-European vote. Added to that, it now seems bizarrely likely that, given the Brexit shambles, the United Kingdom will take part in the E.U. elections. Fears are growing that that may lead to extremist anti-Europeans gaining seats and, consequently, doing all they can to disrupt European legislation and the smooth workings of Parliament.

In fact, there are already signs that a big row is brewing over E.U. budget plans. The Netherlands, pro-European to its core, is pushing back hard on plans for a "Eurozone budgetary instrument," a French-led initiative to create a common Eurozone budget to help out countries in difficulties. Europhiles know that if the entire European project is to last then it must, at some point, get to a point of fiscal union. Skepticism from such a key member as the Netherlands is not encouraging in that regard.

Meanwhile, Europe's economic engine, Germany, continues to flounder. Figures this week showed that German exports fell much more than expected in February as the negative trend in mood, as far as global trade is concerned, shows no sign of relenting.

These are trying times for Europe. The next few months could be a pivotal moment in its history.