Never mind sceptics, 2014 can be Europe’s year

It is past midnight in Athens’ Exarcheia Square and groups of young anarchists and students are assembled around burning cardboard boxes, furniture parts and tree branches. Alongside them, jobless immigrants from Bangladesh and Pakistan — fearful of being harassed by neo-Nazi militants — are settling in for another homeless night.

Such gatherings take place daily in Exarcheia Square and I was there one evening while on a press tour organised by the Greek government. Greece and Italy, two southern European countries at the centre of the continent’s financial crisis, will each be presiding over the European Union for a semester this year. But for Athens, whose presidency was officially launched on Jan 8, the challenge looks far tougher.

Firstly, the country is far from seeing the end of the crisis tunnel, with an unsustainable public debt still hovering at over 170 per cent of GDP, despite two rescue plans worth €240 billion (S$414.8 billion).

Secondly, Greece will be chairing the EU while two crucial events unfold: The 10th anniversary of the Union’s enlargement with ten new member countries; and the European elections in end-May, which are expected to see all-time-high abstention and the rise of ultra-nationalistic and Europhobic political parties.

Viewed from Asia, where most emerging economies continue to boom despite political convulsions, problems of infrastructure development and a worrying accumulation of private debt, Greece’s difficulties seem to provide a telling story of Europe’s prolonged derailment. Nothing, indeed, could be more symbolic than Athens’s crowds of homeless and rebels.

On the one hand, here is a city famed for its Acropolis and antique glory; a near-perfect snapshot of Europe with its great history and monuments. On the other hand is a modern Greek capital, whose urban heart is covered in graffiti, rigged with explosive youth unemployment, financial crisis and unstoppable immigration flows.

The blue Sail flag, chosen by Greece as its EU presidency logo, seems a metaphoric warning: Stay away in 2014 from a Europe tossed asunder by winds of misfortune.

But a closer look at Greek statistics and EU achievements last year provide a different perspective.

Yes, the old continent is still facing a serious economic crisis. And yes, this and the resentment over a common currency forcing governments to impose harsh austerity measures have given rise to political frustrations, exploited by extremist parties. But it has also fuelled, for the first time in many years, a strong thirst for more Europe and a rebirth of a pro-European movement among educated youths.

In Brussels and Strasbourg, respective headquarters of the European Commission and Parliament, European federalists from various political forces — from liberals to greens — are promising to campaign for a stronger EU. An agreement, albeit not perfect, on the Banking union was finally brokered last month.

Moreover, while austerity measures have had a harsh social impact, entrepreneurs all over Europe are finally making their voices heard to resist more tax pressure. Even French president Francois Hollande, a socialist advocating a strong state, has promised to reduce taxation, offering the private sector a “responsible partnership”.

Europe may also benefit, in 2014, from the woes of its geopolitical and commercial rivals.

The controversy over digital spying by the US government has reaffirmed the danger of uncontested American leadership of the globe. The political difficulties of promising Asian economies like Thailand or Indonesia show European investors the danger of betting it all on faraway markets.

The many remaining questions about Japan’s resurgence of Japan and the risk of a financial default by China’s overstretched shadow banking system are fuelling doubts.

In short, 2014 could be the year when European businesses and voters rediscover the potential of their own continent. A number of new laws in Greece are decartelising a country paralysed by a flawed political system based on patronage. Portuguese exports are rising. Spain, after avoiding a rescue plan from Brussels, seems to be back on track. Ireland will soon start to borrow money again from international capital markets. British Prime Minister David Cameron is banking on growth prospects upgraded from 1,9 per cent to 2,2 per cent.

A century ago, in July 1914, Europe’s prosperity was giving birth to the most formidable mass-grave producing machine: World War I. Two centuries ago in September 1814, Europe’s battlefields — still soaked with the blood of the Napoleonic wars — were giving birth to the Congress of Vienna and the first diplomatic initiative to find a durable compromise between power-hungry monarchs.

2014 has all it takes to be another decisive European year.

ABOUT THE AUTHOR:

Richard Werly is an international correspondent for the Swiss daily Le Temps, associate fellow of EU Centre in Singapore and DiploFoundation in Geneva.