Europe on the offensive

On Wednesday, European Commission President Jean-Claude Juncker, during his annual State of the European Union address to the EU parliament in Strasbourg, laid out a vision for a stronger post-Brexit EU.

Junker appeared much more optimistic than recent years when the speech was biased by the Greek debt crisis, thousands of migrants flooding Mediterranean countries and Britain voting to leave the Union. It was only a year ago that mention of further integration was anathema in most political corners.

A year on and global development has surprisingly turned in the EU’s favour. The election of US President Donald Trump has challenged the old trans-Atlantic order and with North Korea threatening nuclear war, Europe is re-emerging as a safe and stable region. In addition, the US’s recent protectionist stance is leading to closer ties within the EU and countries now understand the importance of facilitation trade. China, Japan, Canada and Latin America are amongst the nations that seek closer ties.

Closer to home, Brexit has not turned out to be the miracle depicted prior to the vote. On the contrary, the British political landscape is in disarray, to say the least, and while the European economy is showing consistent signs of recovery, the UK’s economic outlook is tinged by uncertainty. The British experience to date has effectively scared-off dissent amongst the remaining members.

Junker intends to call on member states to take advantage of the upswing to forge a tighter Union, putting the Eurozone at the heart of world trade. Priority will be given to free trade deals with Japan, Australia, New Zealand and South America. Canada’s hard fought deal will come into effect next week. Junker is encouraging Brussels to learn from the deal with Canada and avoid the complexity and infighting that characterised deal.

Junker believes that further Eurozone integration has fewer obstacles with the election of French President Emmanuel Macron and potentially, German Chancellor Angela Merkel winning a fourth term.

Pockets of discontent still remain. The East, which has lost Britain as its champion, is constantly in dispute over civil liberties, especially in Poland and Hungary. The gap between the rich North and the poor South does not seem to have diminished and the fiscal policy along with national sovereignty remain areas of contention.

Still, the balance seems to be in the EU’s favour and confidence is sufficient for the European Commission president to declare that “The wind is back in Europe’s sails, we have now a window of opportunity.”


This article was issued by Antoine Briffa, investment manager at Calamatta Cuschieri. For more information visit, The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

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