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‘Brexit,’ Migration, Trade: E.U.’s List of Crises Keeps Growing

Posted by hkarner - 22. Oktober 2016

Date: 21-10-2016
Source: The New York Times

Prime Minister Theresa May of Britain joined hands with her Irish counterpart, Enda Kenny, at a European Union summit meeting in Brussels on Thursday.

BRUSSELS — It has come to this for the European Union: Its trade policy was being held hostage on Thursday by the Walloons.

Facing a set of debilitating crises, the bloc’s leaders assembled on Thursday for a two-day summit meeting that only underscored how the fractious domestic politics of its 28 member countries are undercutting its ability to confront mounting challenges and restore a sense of common purpose.

An accord with Ukraine backed by every other country risked being derailed by the Netherlands, highlighting again the European Union’s inability to carry out a muscular foreign policy. Consensus over a toughening of sanctions policy toward Russia appeared as elusive as ever despite Moscow’s escalation of the conflict in Syria, reflecting the varied economic and political interests in European capitals.

The budget discipline that Brussels, urged on by Germany and other northern nations, tries to impose on member governments as a condition of membership in the euro currency, is fraying as calls grow, especially from poorer southern countries, to move away from austerity policies after years of lackluster growth. And then there is the proposed trade deal with Canada, a centerpiece of European Union policy, which is being blocked by the French-speaking Walloons of Belgium.

“The E.U. is becoming more and more ungovernable,” said Mark Leonard, director of the European Council on Foreign Relations, a research institute. “The stakes internationally are higher and higher, but politics is becoming more and more parochial.”

The scale of the trouble facing the European Union is hard to overstate. Across the Continent, populist, nationalist and far-right movements are upending traditional politics and promoting anti-Brussels sentiment. The effects of last year’s huge wave of migration continue to roil Germany and many other countries. The bloc is struggling to maintain stability in the single currency zone.

Most of all, Britain’s vote in June to leave the European Union hangs over the entire European project, a reminder that decades of work in knitting together disparate nations can be reversed in a relative instant.

As the leaders arrived in Brussels on Thursday, the fate of the trade pact with Canada, the Comprehensive Economic and Trade Agreement, or CETA, was something of a symbol of how the European Union’s ability to plot a united and ambitious path forward is losing out to parochial concerns.

European Union diplomats were holding an emergency session on the margins of the summit meeting late Thursday to overcome the impasse in Wallonia. But even if there is a breakthrough, the deal might still require the agreement of the Walloon Parliament.

“Domestic politics is becoming increasingly intertwined with E.U. decision-making and, in almost every country in the E.U., it is a febrile period in domestic politics,” Mr. Leonard said. Politicians, he added, are thinking locally and “making calculations based on tiny things” — even when the consequences affect the way the European Union faces up to huge challenges.

At the center of the dispute over CETA is Paul Magnette, 45, the Walloon prime minister. He says he worries that the accord could undermine public services and sectors like farming, and he appears determined to show he can squeeze concessions from the entire European Union and from Canada.

Mr. Magnette, who also serves as the socialist mayor of Charleroi, a city hit hard by de-industrialization, has been the subject of overtures by leaders including President François Hollande of France. So far, Mr. Magnette has not budged.

“I think it’s reasonable to postpone this summit,” Mr. Magnette told Belgian national radio on Wednesday, referring to a signing ceremony, planned for next week, between the European Union and Prime Minister Justin Trudeau of Canada.

That stance has prompted intense irritation in Flanders, the Dutch-speaking northern region of Belgium.

“Apparently they prefer exporting weapons to Saudi Arabia than apples and pears to Canada,” the Flemish prime minister, Geert Bourgeois, told the Flemish Parliament on Thursday. Mr. Bourgeois was apparently referring to a report by the Walloon Parliament showing that the region exported weapons last year worth half a billion euros, or about $546 million at current exchange rates.

If the bickering prevents Mr. Trudeau from coming to Brussels to sign the pact next week, the message to the outside world will also be that there is now no hope of reinvigorating stalled talks on a trade deal with the United States, the Transatlantic Trade and Investment Partnership.

Donald Tusk, the president of the European Council, which organizes the summit meetings, has urged leaders to take lessons from the backlash against globalization that was evident in the vote for Britain’s withdrawal from the bloc, known as Brexit.

There are mounting signs Europe is “not able to convince people that trade agreements are in their interest,” Mr. Tusk told reporters at the summit meeting on Thursday. “I am afraid that it means that CETA could be our last free-trade agreement.”

Experts said the impasse created by tiny Wallonia threatens to plunge the European Union into still more troubled waters. “Europe is facing a new and profound crisis if the Canadian deal collapses,” said John Clancy, a senior adviser with FTI Consulting in Brussels and a former trade spokesman for the European Commission, the bloc’s executive.

“The odds worsen that Brussels can make similar kinds of deals with the United States, and perhaps China one day, to boost growth,” said Mr. Clancy, who advises European and multinational companies in sectors heavily reliant on trade, such as the mining, transport and logistics.

“What’s particularly worrying is that Europe is being brought to its knees on trade by Belgium, a founder of the European project that you’d expect to be more focused on the broader European interest,” Mr. Clancy said.

Other international issues remain thorny. On Thursday, the Dutch prime minister, Mark Rutte, was expected to appeal to fellow leaders to offer concessions to the Netherlands over an agreement between the European Union and Ukraine that was rejected by Dutch voters in a referendum.

Mr. Rutte may have little room for maneuver because he faces elections next year, and is under pressure from the populist, anti-immigration PVV party led by Geert Wilders.

European leaders are also at odds over how to deal with Russia, and on Thursday the German chancellor, Angela Merkel, said she hoped the leaders were able “to firm up our view that what is happening with Russian support in Aleppo is completely inhuman.”

It is unlikely, however, that Mrs. Merkel could win consensus in Germany for tougher sanctions against Moscow. And while Britain and several Eastern European nations favor a tough line on Russia, others, including Italy, have warned against new moves.

Arriving at her first European Union summit meeting, Britain’s prime minister, Theresa May, sought to sound constructive, telling reporters that Britain would “continue to play a full role until we leave.” She later made it clear that she expected to be included in the bloc’s decision-making and meetings until then.

But despite efforts to dial back some of the harsh and nationalistic language that emerged from her Conservative Party convention earlier this month, there was a warning from Mr. Hollande, who told reporters that if Britain pursued a clean break with the bloc — a so-called “hard Brexit” — then negotiations would be hard, too.

The Brexit vote appears to have stirred some rare glimmers of unity among the 27 other nations, though whether that will survive the looming exit negotiations remains far from clear.

The bloc, said Mr. Leonard, faces a moment of great uncertainty, and there is a limit to what leaders attending the summit meeting can achieve in the face of mounting pressures at home.

“The E.U. is a much more resilient than people think, and there is a desire among the political leaders to pull through,” he said.

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