EU meets with a new 'spring in its step'

THE 27 EU presidents and prime ministers meet on Thursday and Friday with a surprising new 'spring in their step', despite the last 15 months of pandemic which has hit the bloc hard.

Notwithstanding the ongoing coronavirus crisis, Brexit-related problems over the Northern Ireland protocol, and wider foreign challenges including from Russia, an increasing number of European politicians sense that the overall political and economic climate for the EU-27 has improved recently. What has driven this turnaround in sentiment is both domestic and international in origin.

At home, after lagging behind countries including the United States and United Kingdom on the distribution of vaccines this winter and spring, the bloc is on track to catch up as soon as July. Following initial mis-steps, the Brussels-based club has enhanced its strategy on vaccine procurement and, last week, this was symbolised when the EU passed the 300 million vaccinations threshold. This moves it ever closer to its goal to have enough doses delivered to vaccinate 70 per cent of adults in the EU next month.

Moreover, even during the time of vaccine troubles earlier this year, the bloc generally showed solidarity between its larger and smaller economies. By learning from its mistakes, Europe will be better equipped for future pandemics.

On the international front, the big change is in the US-EU relationship now that President Joe Biden is well into his first year of office. There has been a sea change in approach from Washington from the Trump era that was crystallised in his visit earlier this month to Brussels for the Nato and US-EU summits.

To be sure, some tensions remain in transatlantic ties, and an US-EU trade deal that has been mooted is not close to being realised. However, the tensions so evident during the Trump presidency have largely been side-lined.

This political fillip has been reinforced by stronger economic data too. Eurozone business activity surged in May as the easing of coronavirus-related restrictions injected life into the bloc's dominant services industry, echoing data which showed that factories had their best month on record.

The IHS Markit's final composite Purchasing Manager Index (PMI), seen as a good gauge of economic health, jumped to 57.1 last month from April's 53.8, its highest level since February 2018. Moreover, an index covering the service industry soared to a near three-year high of 55.2 from 50.5. In addition, the services new business index was the highest since early 2018 with the overall composite new orders reading bouncing to a near-record 58.4 from 53.4 - its highest since June 2006 - as pent-up demand was released.

However, important as these developments potentially are, only time will reveal if the tide is truly turning positively for those forces championing EU unity and integration. As many European leaders are aware, the political situation remains fragile, including the uncertainty in Germany over who will succeed Angela Merkel as chancellor after September's ballot, and whether Emmanuel Macron will be re-elected in France next year.

Moreover, fundamental debates remain undecided about the union's future beyond recent agreements such as the Bratislava Declaration signed by all 27 member states. That manifesto includes better tackling migration and border security, beefing up external security and defence, and greater stress on enhancing economic and social development, especially for young people across the continent.

Some long-standing EU members in Western Europe which signed the Rome Treaty in 1957 would like to forge consensus around a new, post-pandemic integration agenda. Yet, others, including many more recent accession states in Eastern Europe are sceptical about this pathway.

Moreover, some of the latter fear an increasingly multi-speed Europe will see them left behind and potentially lead to the EU's further dismemberment, or even complete disintegration.

UPBEAT MOOD

Nonetheless, despite these disagreements and likely further potential setbacks on the horizon, the contrast now with the mood music of key European leaders during much of the last six years since the second half of 2016 following the Brexit election and Donald Trump's election is striking. For instance, then-European Council president Donald Tusk appeared despondent at various points when he remarked that the threats facing the EU were then "more dangerous than ever" with three key challenges "which have previously not occurred, at least not on such a scale" that the continent must tackle.

The first two dangers related to the rise of anti-EU, nationalist sentiment across the continent, which are still strong today, plus the "state of mind of pro-European elites" which Mr Tusk then feared were too subservient to "populist arguments as well as doubting in the fundamental values if liberal democracy". While some make the mistake of thinking these issues have disappeared, post-Brexit, that is far from being the case.

Indeed, Emmanuel Macron has admitted that even France, one of the two traditional motors of EU integration alongside Germany, would probably vote to leave the EU if presented with a similar choice to the UK's 2016 referendum. Mr Macron faces a difficult re-election battle in 2022, and it remains plausible that far-right candidate Marine Le Pen could pull off an upset victory.

In key regional elections on Sunday, Mr Macron's party, the La Republique en marche performed poorly across the country, with a national vote share barely into digits, underlining how it has failed to convert five years in power at the national level into grassroots support. Moreover, the abstention rate of well over 60 per cent, the highest for a French election since at least 1958, has fuelled speculation about the health of French democracy.

While the salience of Mr Tusk's first two issues has subsided, perhaps only temporarily, the third threat cited by him largely remains, apart from the sea-change in the US under President Biden. That is what he called the new geopolitical reality that has witnessed an increasingly assertive Russia and China, and instability in the Middle East and Africa which has driven the migration problems impacting Europe.

This underlines that, while the EU is currently facing a more favourable political and economic backdrop than before, the volatility of sentiment towards the bloc may ebb and flow further in the months to come if storm clouds gather again. While the Euroskeptic wave may have passed its peak, this cannot be taken for granted and decisions in coming months will help define the EU's longer-term political and economic character in the face of multiple challenges, both domestic and foreign, still on the horizon.

• The writer is an associate at LSE IDEAS at the London School of Economics