2017: The year ahead in Europe

Luminosity Italia

“It's tough to make predictions, especially about the future.”

That quote variously attributed to Danish Physicist Niels Bohr or New York Yankees baseball legend Yogi Berra – neither a master of the English language – has a charm of sorts, evoking as it does the folly of making predictions. That seems especially true after 2016, one of the most bewildering years in memory.

But with that caveat and a dose of courage, we forge ahead and outline what lies in store next year in Europe:

Battle between mainstream and populist politics. Europe has a loud range of parties, some longstanding, others newly formed. With the continent facing economic, political and social turmoil, we expect mainstream parties have an agenda-setting role and impact even where strongly divisive political trends are driven by populist movements.

It will be time for federalists to rejuvenate the European Union project. Rational policies will whittle away support from both populist right and left parties.

The far right has already some success in a number of European nations. Dominque Reyné, political scientist and author of Les Nouveaux Populismes, says that “a black wave will travel throughout Europe from north to south. Populism in Europe is entering a third phase, and is ready to govern Hungary, Poland, Slovakia, and why not France with Marine Le Pen in 2017?”

We are more optimistic than Reyné. It will be time for federalists to rejuvenate the European Union project. Rational policies will whittle away support from both populist right and left parties.

Crucial elections. The largest players in the European Union will all have general elections in 2017. The Netherlands begins the series of votes on March 15 with 13 parties vying to enter its parliament next year.

The French have twice supported the National Front of Le Pen, then turned away from the anti-immigration party at the last minute.

But France is the crucial vote to watch in the spring. French presidential elections on April 23 and May 7 will be followed by a parliamentary election on June 11. The French have twice supported the National Front of Le Pen, then turned away from the anti-immigration party at the last minute. Next June an early general election is expected in Italy, where the center-left Democratic Party and the anti-establishment populist Five Star Movement are polling neck and neck. Finally, pivotal elections in Germany will be held in the fall.

Better business environment? Paolo Onofri, secretary general at Prometeia, a research firm based in Milan, thinks that “despite the good closing of 2016, the growth prospects for European countries in 2017 will slow due to uncertainties in the political environment”.

Onofri says “overall in 2017, European growth will fall from 1.7 to 1.5 percent, with inflation rising from 0.3 to 1.4 percent”. “The ECB will seek to maintain interest rate current levels in the short term, while bond yields in the long term will be affected, although to a limited extent, by the increase of the US bonds,” he says.

“Businesses would do well to foster the EU and the single market to leverage their diverse work forces and invest in digital technology.”

But we share some of the optimism of Klaas de Vries, research analyst in Brussels, who thinks “businesses would do well to foster the EU and the single market to leverage their diverse work forces and invest in digital technology”.

Euro-Dollar parity – and beyond? A range of investment houses and banks have long been predicting the dollar and euro will again reach parity, and the time will likely come in 2017. The US economy is showing enough strength that the Federal Reserve Board raised its benchmark interest rate, while the EU continues along the same path with an asset-buying program as its main stimulus for the regional economy.

The dollar could move beyond parity, becoming more valuable than the euro for the first time since 2002.

Dollar strength will mean higher fuel prices and international debt costs in Europe, but cheaper exports and more foreign tourists. The dollar could move beyond parity, becoming more valuable than the euro for the first time since 2002.

Resurgence of traditional media. Fake news shared over social media is not only a problem in the US political landscape, it is also spreading in Europe. The EU already has the most stringent rules on privacy and use of website cookies, so look for more attempts at regulation and Internet accountability.

With so many national elections set next year, governments and media have their antenna out scanning for fake news and real solutions. The chairman of Germany’s Social Democratic Party Thomas Oppermann has proposed a new law that would require companies such as Facebook to delete fake news items or hate speech within 24 hours or face a fine of €500,000 per item.

The chairman of Germany’s Social Democratic Party Thomas Oppermann has proposed a new law that would require companies such as Facebook to delete fake news items or hate speech within 24 hours or face a fine of €500,000 per item.

French newspaper LeMonde has set up a 13-person fact-checking unit called Les Décodeurs that is developing a way to automate how to root out false news on a large scale. Following the election of Donald Trump in the US, the New York Times added the most paid subscriptions to its print edition since it introduced a pay wall in 2011, a trend likely in Europe as well as the thoughtful increasingly look for information that has been vetted and edited by creditable sources.

The ‘Cool’ War. It might not be talk of nuclear deterrence and explosive megatons as in the Cold War, but relations are chilly between Western Europe and Russia. An assertive Vladimir Putin is making the continent nervous following Russian actions in Georgia, Moldova, the Ukraine and its new push in cyber warfare. Sweden has heightened its readiness by taking economic, civilian and military precautions while Britain, Germany and the US agreed to a plan to send around 4,000 NATO soldiers to Estonia, Latvia, Lithuania and Poland to counter perceived Russian threats.

Analysts say Russia is keen to discredit liberal democracies through hacking and misinformation across the Western world.

But the battle is more likely to be waged in cyberspace. Analysts say Russia is keen to discredit liberal democracies through hacking and misinformation across the Western world.

Hans-Georg Maassen, head of Germany’s Federal Office for Protection of the Constitution, said there is a clear threat from Russian hackers seeking to sow “uncertainty in German society” and destabilize the country.

In the run-up to Italy’s much watched referendum on changing its constitution, websites by the populist 5 Star Movement carried headlines and copy directly sourced from a Kremlin news source called Sputnik that promotes various anti-Western conspiracy theories, according to digital media website Buzzfeed.

Look for increased cyber security, scrutiny and revelations on Russian interference in the year ahead.