Briefing

Potential Political and Security Triggers of EU Collapse

In my previous piece on the precarious position of the European Union (EU), I discussed how a new economic crisis, brought on by either a new recession or a new financial crisis, could destroy the euro and with it the European Single Market and the EU itself.  Economic triggers for collapse are not the whole story, however. There are political and security scenarios that could lead to the same outcome. Here I consider four, namely: a Eurosceptic political breakthrough in a major state in the eurozone core; the collapse of the deal on migrant flows into Europe between Turkey and the EU; a flare up and spiralling out of control of the Catalan separatist crisis; and an act of Islamist super-terrorism.

Arguably, we are already witnessing the playing out of the first, in the form of the current stand-off between the new populist coalition government in Rome and the European Commission in Brussels. This centres on the Italian government’s proposed budget, which envisages an increase in the deficit to pay for election promises made to voters who are massively discontented with the status quo. The Commission is having none of it and has ruled out the draft budget as unacceptable under EU rules. This optic, of a democratically elected government being told what it can and cannot do by Brussels, is a dream come true for Eurosceptics everywhere.

The assumption that a deal will be done may prove accurate in the short term but the leader of the right-wing La Liga, Matteo Salvini, is only likely to sign up to one if it allows him plenty of scope to continue blaming Brussels for Italy’s problems.  Salvini’s intention is to keep stoking Italian resentment of the EU as his most likely path to full political power. Eventually, this dynamic is likely to lead to a rupture. With the yield on Italian government debt already spiking and Italian banks already suffering, the full political crisis, when it comes, is likely to shake the EU to its core. It will raise questions over Italy’s continued participation in the single currency, may trigger Italian bank collapses, and lead to the government in Rome either asking for bail-outs or pursuing euro exit. Contagion to other major countries in the eurozone is almost guaranteed.

Elsewhere, another possible trigger for EU collapse resides in the EU’s vexed relationship with Ankara. In particular, if the Erdogan government decided to cease its current policy of holding migrants in Turkey rather than allowing them free passage to Europe, (in return for which it currently receives cash payments from the EU), this could massively destabilise the fragile status quo inside the EU.   Member states cannot agree on how to handle the migration crisis, so in this scenario we would be likely to see individual member states take unilateral decisions to close borders and end free movement. Disruptions to flows of goods in the EU’s single market would follow.  Politically, since the issue of Muslim immigration to the EU has been one of the most beneficial for the growth of far-right, Eurosceptic populism in recent years, further breakthroughs for these political forces in the EU’s core could be expected.  A re-nationalisation of EU politics would follow, and the chances that other countries would look for the EU exit door would likely increase significantly.

Although currently somewhat out of the news, another political crisis with the potential to destroy the EU is that between the Spanish authorities and the Catalan government in Barcelona. If this crisis continues to be mishandled and results in a full-scale break-down, the consequences could again be profound. Catalonia is the richest part of Spain. Without it, Spain would not be able to service its sizeable foreign debt. Again, this could trigger the need for bail-outs beyond the size and scope of current eurozone crisis management facilities. There is no guarantee that others would provide funds on the scale required, and no political or popular appetite in Spain for the austerity that would be demanded in return for them. A badly handled separation of Catalonia from Spain could therefore drive Spain to the euro exit door and trigger contagion to other parts of the eurozone.

Lastly, there is also a chance that an act of Islamist super-terrorism could radicalise politics inside the EU beyond recognition. If an Islamist group were able to detonate a radiological dirty bomb in a major European city, for example, and it was shown that the individuals involved had managed to enter Europe via migration routes from the Middle East, the political effect could be devastating. Claims that other EU member states could not be trusted to police their borders or run counter-terrorism operations seriously would no doubt be rife. Demands for unilateral action, rather than collective EU action, would likely be unstoppable. Free movement in the European Union would grind to a halt, much EU security cooperation would be unwound, and political support for the Eurosceptic far-right would almost certainly increase. Support for the EU, on the other hand, would be likely to dissipate.

Each of the scenarios outlined above is all too plausible. One could describe others that would be equally serious. Taken together with the economic triggers for collapse outlined previously, one comes to the troubling conclusion that for the EU to survive, only some of this needs to go wrong while an awful lot needs to go right.

I will turn next, in the third and final piece in this series on the crisis facing the EU, to the question of what we could expect Europe to look like were the EU indeed to collapse.

01.11.2018