Sluggish economic growth, loss of competitiveness, weak political leadership, reforms fatigue, and high unemployment are a lethal mixture of causes and effects of the European Union’s current gloominess. As though this was not enough, a divided EU leadership team now has to face serious geopolitical unrest that threatens to throw Europe back to the chilly days of the Cold War.

The belligerence between Russia and the Ukraine, the collapse of law and order in Libya, the menacing growth of the Islamic State, and the resurgence of unrest in Israel and Palestine are factors that will test the EU leaders’ ability to navigate their economies away from another recession. Financial markets may seem to be weathering these geopolitical storms without any sense of panic, but the writing is on the wall for another possible deep recession caused by a number of factors – not least by the loss of confidence in the existence of a calm environment that is so vital for new investment.

It is important to understand why all these woes seem to be afflicting Europe at the same time. I have often argued that one of the main causes behind the EU economies’ inability to bounce back is the lack of strong political leadership. Good leaders would commit themselves with more determination to undertake a programme of structural reforms to stop the old continent’s loss of competitiveness.

This weak leadership is now becoming more evident in the reliance that Europe has placed on the US for guaranteeing its security. At a time when most EU countries were becoming even more dependent of gas piped from Russia, defence spending was cut in most countries below the magical 2 percent of GDP level. The US has lost the appetite for waging war after two very expensive and not quite successful military campaigns in Iraq and Afghanistan.

After decades of reducing Nato to practical irrelevance, most European countries are realising that they have hugely underestimated the risk of economic disruption resulting from renewed hostility between Russia and the Eastern European states some of which are now EU members. The short-term solution for Nato seems to be massive investment in defence hardware and manpower.

Just when countries like France and Italy are trying to cut their public spending to conform to the European Monetary Union deficit and debt targets, they face the prospects of increased capital and recurrent military expenditure to provide a credible defence against military aggression from Russia and beyond.

European leaders must accept the unpleasant reality that the old continent is losing influence economically, militarily and politically

The EU’s lacklustre leadership is also evident in the handling of the Isis crisis that threatens stability in most Middle East countries that are the source of the all important flow of fuel to Europe’s thirsty industries. Oil-rich Middle East countries have spent massively on their military but still depend on US leadership to counter any threat like that coming from Isis.

This all comes at a time when President Barack Obama, nearing the end of his second term, has little appetite to go down in history as the President that led the US to yet another expensive and unpopular war away from home. No wonder that most Americans are once again opting to embrace isolationist policies to keep their sons and daughters at home rather than fight the wars of other nations.

The geopolitical and economic global scene is changing rapidly. China will soon become the biggest economy in the world surpassing the US. Russia, that has been unable to improve the quality of life of its people, wants to resort to renewed nationalism to kindle some pride and enthusiasm in people who feel rather rattled by their personal economic situation. The US is no longer willing, or even able, to police the world as one would expect from the only remaining military superpower.

European leaders must accept the unpleasant reality that the old continent is losing influence economically, militarily and politically. Europe can still avoid an accelerating drop into political and economic insignificance. Combined with structural economic reforms, it needs to build stronger ties with the US to strengthen its military deterrent to check the ambitions of old enemies as well as new rogue organisations that are determined to destroy western culture.

The next decade will continue to be a tough one for the leadership of the EU. Rather than squabbling to grab the more important seats in the European Commission, the European Council should come up with credible plans to once again make the EU a respectable economic and military force.

johncassarwhite@yahoo.com

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