Europe’s year from hell may presage worse to come

By any measure, it has been a year from hell for the European Union. And if Britons vote to leave the bloc, next year could be worse.

Not since 1989, the year the Berlin Wall fell and communism crumbled across eastern Europe, has the continent's geopolitical kaleidescope been shaken up so vigorously.

But unlike that year of joyous turmoil, which paved the way for a leap forward in European integration, the crises of 2015 have threatened to tear the Union apart and left it battered, bruised, despondent and littered with new barriers.

The collapse of the Iron Curtain led within two years to the agreement to create a single European currency and, over the following 15 years, to the eastward enlargement of the EU and NATO up to the borders of Russia, Ukraine and Belarus.

That appeared to confirm founding father Jean Monnet's prediction that a united Europe would be built out of crises.

In contrast, this year's political and economic shocks over an influx of migrants, Greek debt, Islamist violence and Russian military action have led to the return of border controls in many places, the rise of populist anti-EU political forces and recrimination among EU governments.

Jean-Claude Juncker, who describes his EU executive as the "last chance Commission," warned that the EU's open-border Schengen area of passport-free travel was in danger and the euro itself would be unlikely to survive if internal borders were shut.

Juncker resorted to gallows humor after the last of 12 EU summits this year, most devoted to last-gasp crisis management: "The crises that are with us will remain and others will come."

His gloomy tone was a reality check on the "we can do it" spirit that German Chancellor Angela Merkel – Europe's pre-eminent leader – has sought to apply to the absorption of hundreds of thousands of mostly Syrian refugees.

Merkel has received little support from her EU partners in sharing the migrant burden. Most have insisted the priority is sealing Europe's external borders rather than welcoming more than a token number of refugees in their own countries.

This is partly due to latent resentment of German dominance of the EU and payback for its reluctance to share more financial risks in the eurozone.

Some partners also accuse Berlin of hypocrisy over its energy ties with Russia, while friends such as France, the Netherlands and Denmark are simply petrified by the rise of right-wing anti-immigration populists at home.

One of the sharpest rebuffs to sharing more of the refugee burden came from close ally Paris. Prime Minister Manuel Valls said of Merkel's open door policy towards Syrian refugees: "It was not France that said 'Come!'."

Merkel's critics rounded on her at an end-of-year EU summit. Italy's Matteo Renzi, backed by Portugal and Greece, attacked her refusal to accept a eurozone bank deposit guarantee scheme.

The Baltic states, Bulgaria and Italy denounced her support for a direct gas pipeline from Russia to Germany at a time when the EU is sanctioning Moscow over its military action in Ukraine and has forced the cancellation of a pipeline to southern Europe.

"It was pretty much everyone against Merkel in the room," a diplomat who heard the exchanges said.

One problem likely to worsen in 2016 is that Europe's main leaders are politically weak and so preoccupied by domestic challenges that they are unable to take the necessary collective action.

The conservative Merkel's survival in the chancellery hinges on her ability to bring down the number of refugees flooding into Germany next year and show she has migration under control.

Without "Mutti" (Mummy), as she is affectionately known back home, the EU would be in even more dire straits.

French President Francois Hollande's year has been bracketed by militant attacks on the streets of Paris in January and November that caused Europe-wide shock over the Islamist threat from within and over failures in European police and intelligence cooperation.

France's influence in Europe is diminished by its economic weakness as Hollande struggles for re-election in 2017 against rising far-right populist Marine Le Pen and conservative predecessor Nicolas Sarkozy.

British Prime Minister David Cameron cares only about finding a face-saving deal on changes in Britain's EU membership terms in February to win a knife-edge referendum which he has hinted he hopes to hold sometime next year.

Cameron has effectively mortgaged Britain's future to an attempt to deprive immigrants from eastern EU countries of the same in-work benefits that low-paid British workers get, which many EU partners say would be illegal.

Given British public alarm over immigration, an anti-elite mood and age-old suspicion of Europe fanned by sceptical media, the referendum is an accident waiting to happen.

If Europe's second-biggest economy and one of its two main military powers became the first member state ever to vote to leave the EU, it would be a shattering blow to the bloc's confidence and international standing. Die-hard European federalists like to believe a "Brexit" would unshackle the remaining members to move ahead in a much closer union built on the eurozone.

But that is to ignore the myriad east versus west, north versus south, free-market versus protectionist, socialist versus conservative and sovereignist versus integrationist divisions among the other 27 member states.

More likely, a Brexit vote would prompt demands for referendums elsewhere, from Poland to Denmark, amid acrimonious negotiations between London and Brussels over the terms of Britain's departure and future relationship with the bloc.

Denmark has just shown the political risk when governments anywhere in Europe ask voters whether they want even a tiny bit closer EU cooperation. The answer was "Nej tak" – no thanks.

If Cameron wins and Britain stays in on improved terms, some fear political contagion, with other national leaders tempted to emulate his tactic of taking Brussels hostage for domestic ends.

"Unfortunately, we need a victory for Cameron," one senior EU official said. "But it is full of risk for Europe as a whole."

[Reuters]