The Future of Europe

European Union insiders explore various scenarios for EU politics over the next decade, given migration, monetary policy disagreements and Brexit.

Featured Experts from the Natixis Investment Managers Summit:

  • Alina Polyakova, Rubinstein Fellow, The Brookings Institution; Professor, Johns Hopkins University
  • Guy Verhofstadt, Brexit Negotiator, European Parliament; Former Prime Minister of Belgium
  • Karl-Theodor zu Guttenberg, Former German Minister of Economics and Technology; Former German Minister of Defense
  • Moderator: Ayo Akinwolere, Broadcaster and Writer
Beset by crisis after crisis, the European Union has its back to the wall, with rising populism threatening to derail the institution from within. Now – or never – is the moment for the EU to reform and address the weaknesses that the far right has leveraged for its own ends and create a narrative that can attract those who may have been disenfranchised. The good news is that Brexit actually generated a groundswell of support for the European project, offering a window of opportunity.

Chaos, and a wake-up call
The economic crisis, the Greek default, Germany’s refugee crisis, Brexit: From the outside, the EU looks like “chaos,” said Karl-Theodor zu Guttenberg. But it is also a wake-up call. “And I’d like Europe to respond to that wake-up call far more coherently than it does now.”

No one on the panel argued with the “chaos” analysis, least of all Guy Verhofstadt. Visibly exasperated by the very institution he is tasked with defending, he pointed to the failure to come up with a common migration and asylum policy, and the failure to deal with the fallout from the financial crisis, among many others. “We have a problem and it’s an institutional problem,” he lamented. “If we are not capable to re-found it, to reform it, then I predict in two, three, five years the return of the populists and the nationalists but in higher figures than we see it now. That could be the end of the whole story.”

Populism surge not over
Angela Merkel’s migrant mistake was actually a communications mistake and the assumptions she made about how other leaders would behave, said zu Guttenberg. The surge in populist parties has not yet reached its height, said expert Alina Polyakova, observing that their rise is partly filling a vacuum created by the collapse of centrist and center-left parties across Europe. The challenge for pro-Europe politicians is: “How do we reinvigorate that central-left vision? How do we get people, especially younger people, to buy into the vision of Europe that the last generation laid?” Elections in Hesse, where there is “almost no unemployment,” bear out her theory that voting for the far right does not necessarily reflect real economic conditions, but a more abstract fear. Zu Guttenberg said the fight back demands “a narrative that really flies with those who are fearing, over-anxious regarding the future.”

So what’s the good news?
Instead of provoking a rash of other exits, Brexit has strengthened belief in the European project, said Verhofstadt, quoting a 66% acceptance level across the EU recorded by Eurobarometer.1 Meanwhile, he notes that Merkel’s would-be successors are all pro-Europe, which will make life easier for Emmanuel Macron. In Polyakova’s view, Europe itself underestimates its economic and soft power capabilities and needs to use them more on the global stage. For this, big changes are needed, said Verhofstadt, starting with introducing euro-securities and rethinking defense. But, he continued, “I think in 2019 there is an opportunity to make an alternative vision on the future of Europe, with a number of reforms as an alternative against populists and nationalists, and if that doesn’t happen, then the worst scenario is possible, because people are going to say, ‘Okay, you’ve got the possibility now to reform it and it didn’t happen.’” Whether his fellow Eurocrats can rise to the challenge remains to be seen.

For additional insights and discussions, we invite you to watch full session replays from the Natixis Investment Managers Summit.
1 Parlemeter 2018 – Taking up the challenge: From (silent) support to actual vote - Executive Summary on the website of the European Parliament.

A euro-security is a security issued or traded in a country using a currency other than the one in which the security is denominated. This means that the security uses a certain currency, but operates outside the jurisdiction of the central bank that issues that currency. The term has nothing to do with the euro; the prefix "euro-" is used more generally to refer to deposits outside the jurisdiction of the domestic central bank.

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The Natixis Investment Managers Summit was hosted by Natixis Investment Managers. Natixis Investment Managers includes all of the investment management and distribution entities affiliated with Natixis Distribution, L.P. and Natixis Investment Managers S.A.

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