Paul Taylor, a contributing editor at POLITICO, writes the “Europe At Large” column.
PARIS — The dark cloud of the Omicron coronavirus variant may be plunging your plans for the New Year into uncertainty, but there are still reasons to hope that Europe can make significant progress on a range of thorny issues in 2022.
While it is clear we will have to live with COVID-19 for another while, new political constellations have been emerging since Germany’s change of government in December. These will offer the prospect of innovative solutions for long-standing problems in the European Union.
To be sure, there are several things that could go wrong: an uncontrollable surge of more deadly coronavirus variants that set back the economic recovery; a Russian military offensive against Ukraine; a Polish blockade of EU institutions in the battle over the rule of law and EU funds.
However, none of those worst-case scenarios is certain — or even likely. And there are undeniable grounds to be more optimistic about the coming year.
A coalition for investment
After years of sterile battles over the EU’s much abused fiscal rules — which were suspended at the start of the COVID-19 pandemic — a consensus is emerging that in order to avoid strangling the recovery, budget discipline regulations must be changed before they return to force in 2023.
From the frugal north to the more spendthrift south, there is widespread recognition that public investment will be key to the success of the green and digital transformations of the European economy, and that outdated debt and deficit limits must not prevent this. Along this line, French President Emmanuel Macron and Italian Prime Minister Mario Draghi have jointly called for reform to perpetuate collective EU borrowing beyond the temporary recovery fund created in 2020.
Germany’s new center-left coalition also wants to boost public investment to modernize its creaking transport, telecoms and energy networks and meet ambitious goals to fight climate change. So far, it is focusing on repurposing unspent funds borrowed during the COVID-19 crisis, but Chancellor Olaf Scholz and his hawkish finance minister, Christian Lindner, have not ruled out another ad hoc EU recourse to the bond markets if necessary.
Even Dutch Prime Minister Mark Rutte’s new coalition is committed to substantially increasing public spending on housing, social welfare and climate action, and to a more constructive European role than the Netherlands’ previous positioning as leader of the “frugal” faction of EU skinflints.
Macron has called a summit in March on a post-pandemic economic model for Europe, which seems likely to showcase these new priorities, including greater public investment, a minimum wage in all EU countries, fairer corporate taxation, tougher trade and investment rules and a more proactive role for the EU in promoting European champions in key technologies — from batteries and microchips to cloud computing and space systems.
A Franco-German-Italian tiger in the tank
After a year in the doldrums, with former German Chancellor Angela Merkel in her twilight months and Macron distracted by his expected bid for reelection in April 2022, the EU can now look forward to more energetic Franco-German leadership from May onward.
The centrist Macron’s prospects of winning a second term look strong, but even if his center-right opponent, Valérie Pécresse, were to score an upset victory, France would remain on a pro-European course. The main difference between the two French leaders would likely be their stance on migration, but even Macron has already pressed for tighter border controls and greater political control over the European Schengen zone of passport-free travel.
The three-party coalition in Berlin, with Green ministers in the key foreign affairs and economics and climate portfolios, has made deepening the EU a high priority, as has the Italian government. Whether Draghi becomes Italy’s president in 2022 and uses that role to guide a pro-European reformist government, or stays on as prime minister, Rome will be an active partner alongside Paris and Berlin in driving European economic and political integration.
The EU may also begin to correct its geopolitically shortsighted neglect of the Western Balkans next year. Once the French election is out of the way, there is a good chance that it will finally unlock accession negotiations with Albania and North Macedonia.
Tougher on the rule of law
The new German government has also made clear it will be less indulgent when it comes to moves by the nationalist rulers of Poland and Hungary to undermine the independence of the judiciary, limit media freedom and civil rights, and reject the primacy of EU law over national legislation.
Firmer backing from Berlin and Paris should put the European Commission in a strong position to use its leverage to press for compliance with rulings of the Court of Justice of the European Union, by continuing to hold back recovery funds from Warsaw and Budapest. While Hungarian Prime Minister Viktor Orbán is unlikely to back down before his country’s parliamentary elections in April, he faces the strongest challenge to his illiberal rule so far from a pro-European united opposition front. Even if reelected, he may well be in a weaker position and seek a pragmatic solution.
Poland’s conservative Law and Justice party doesn’t face elections until 2023, but it too may face pressure to strike a compromise over rule-of-law issues, both to access EU funds and to shore up European solidarity over Belarus’ migration manipulation on its eastern border and Russia’s saber-rattling toward neighboring Ukraine. There are faint signals that Warsaw is looking to temper, if not end, its dispute with Brussels.
There’s nothing like a big fat external threat to make often scrappy EU-NATO relations focus on essential common interests.
In 2022, both organizations will renew their strategic doctrines: The EU is set to adopt its first common threat analysis and define its level of military ambition in a Strategic Compass in March. And NATO is due to update its Strategic Concept for the first time in a decade at a Madrid summit in the summer. The last version of the concept, approved in 2011, defined Russia as a security partner, made no mention of China and focused on counterterrorism and crisis management missions rather than great power competition and territorial defense.
NATO will remain the backbone of hard security in Europe, despite questions over the United States’ long-term commitment, but many emerging security challenges now require the EU’s broader toolbox — including sanctions, institution building, development assistance, regulatory convergence, cybersecurity and fighting disinformation — rather than NATO’s military hammer.
With unprecedented support in the White House for EU defense integration, expect a step forward in NATO-EU cooperation this year, as well as the appointment of a new NATO secretary-general who is more sympathetic to EU defense efforts than the outgoing Jens Stoltenberg.
Turning the corner after Brexit
Lord David Frost’s unlamented departure as the United Kingdom’s truculent chief Brexit negotiator offers at least one reason to hope that EU-U.K. relations may turn the corner and begin to recover from their deep post-Brexit funk.
Prime Minister Boris Johnson needs a solution to the Northern Ireland trade problem created by the protocol that Frost negotiated in the 2020 EU-U.K. trade agreement, creating an awkward customs border in the Irish Sea to avoid border controls on the island of Ireland. There are signs that the U.K. wants a deal ahead of Northern Ireland assembly elections in May, where the republican Sinn Féin may otherwise emerge as the strongest party.
After a year of frantically seeking new friends around the world while acting as if the EU didn’t exist or matter anymore, London may finally be ready to deal with its closest neighbors and biggest trade partners more pragmatically in 2022.
Now that would truly be a New Year miracle.