Europe has been through a very rough patch since the financial crisis of 2007-2009, but the real danger for the European Union and the eurozone is still very present. In order to save the EU, Europeans will have to get even closer.
For a change, things look very good for the eurozone. Economic growth has exceeded both that in the US and the UK in the first quarter, and investors are pouring cash into European stocks (something I’ve said people should do for a while).
Last week, European equities saw their largest-ever inflows of capital, according to analysis of data by Bank of America Merrill Lynch. The fact that most of the money came via exchange-traded funds shows that opportunistic investors put money into Europe as the danger that extremist Marine Le Pen would become French president passed.
But the money can go out as quickly as it came in, at the first whiff that populism is not dead and buried. And investors might get a sign that this is the case relatively soon. Rebuilding the EU is only just beginning, and nobody seems to have a plan how to do it.
With the post-election euphoria gone, the enormity of the task seems overwhelming. There are too many things that Europe must put right: unemployment is not falling fast enough, inequality is rising. But what’s worse, countries that were once comfortably liberal are plagued by doubts whether acting decently and with compassion is still the right thing to do.
Brexit has dealt a heavy blow to the idea of unity at the heart of the EU. The fact that 52% of the British people believe they would be better outside of the union rather than in has exposed the doubts that other Europeans have about the project.
But ironically, if the EU plays it right, Brexit could become its chance to put things right within the union again. And not by “punishing” Britain for leaving — as the right-wing press in the UK keeps saying — but by simply creating a more welcoming environment within the EU than outside.
This is the Europeans’ chance to decide whether they want more Europe or no Europe. The latest opinion polls show that, in fact, Brexit has strengthened the belief of citizens in other EU member states in the union. The big question is: will this last?