World Economy

EU at a Critical Juncture

EU at a Critical Juncture
EU at a Critical Juncture

There is a sort of consensus that 2016 will be a decisive year for the European Union as it faces crisis within and outside its borders, which may result in division and disintegration. The group stands at a critical point and depending on the political will of its member states it could go either way, a report from Davos said.

These issues were the subject of heated debates at the World Economic Forum in Davos on Friday, in which senior leaders from France, Germany, Greece and the Netherlands reiterated their commitment to the European Union, and pledged to do everything to reach a compromise with some member states, including the United Kingdom to keep them in the group.

Manuel Valls, prime minister of France, told participants at the forum that “I’m sure Europe can move ahead and can mature and grow with its policies, but it can only do so if it can face the immediate challenges of security and refugee influx”.

Alexis Tsipras, the Greek premier, also addressed the refugee crisis, stating that “We look forward to working with Europe, as the burden should be shared by everyone in the EU”.

Wolfgang Schauble, Germany’s finance minister, stressed that instead of spending billions in Europe for accommodating the refugees and their needs, the better course of action is to help rebuild the regions that the refugees are fleeing to reduce the exodus to Europe.

Witold Waszczykowski, Poland’s foreign minister, took a different view, stating that although the international and European focus is on the influx of refugees from the Middle East, little attention has been paid to the hundreds of thousands of people fleeing the war in Ukraine into Poland. This ‘unrecognized crisis’ has resulted in Poland hosting one million refugees, he said.

Mario Draghi, President of the European Central Bank, was of the opinion that “spending by governments in response to the influx of refugees to Europe could prove to be a stimulus for the economy.”

On the economic crisis in Greece, Draghi observed that the situation has improved, although more work is required in financial-sector reforms and addressing non-performing loans, among other areas.

The UK Prime Minister David Cameron reiterated his determination to secure the future of the UK in a reformed EU. In his view, this would be the “best outcome for both Britain and Europe,” yet in order to deliver on the concerns of the British people, “progress should be achieved in Brussels on the main areas of dispute, such as EU’s economic competitiveness, fair rules for countries that are not part of the Eurozone, sovereignty and migration.”