No news is good news. The Greek debt crisis and even the euro have momentarily disappeared from the headlines. Europe and the euro will survive and will do even better than that, much as this displeases the Murdoch media, conservative think tanks and pundits all over the world, including in Europe itself.
More interesting is the effect of the present multiple crises on the institutional set-up of the EU. During the euro crisis it has become evident that that the European Central Bank serves as the main technical pillar of the common currency. This is fine but cannot last indefinitely. A Banking Union with a common regulator, and at least core parts of a fiscal union, will have to follow.
Joschka Fischer. (Flickr/Heinrich-Boll-Stiftung.)
Indeed a European banking union is already underway, if slowly and, as in all European structure building, with a fair amount of national bickering. Now that even the largest British bank is shrinking its investment banking arm, the case for the City to make a stand against Brexit and eventually for the UK to adopt the euro and thus become part of the world's second currency block becomes ever more evident.
The main challenge for the EU at present is in foreign affairs, and on top of the problem list figures Putin. The radical change from limited partnership to full containment of a Russia that is aggressive (Ukraine), criminal (assassination of Boris Nemtsov) and yet enfeebled is not easy. This is illustrated by Britains's energy confrontation with the Russian tycoon Mikhail Fridman. The decision to block an important foreign investment cannot have come easy for a government dedicated to giving market forces free rein whenever possible.
Yet the decision is as right as it was inevitable. The energy dependence of some eastern and north-eastern EU members from increasingly erratic decisions by the Kremlin is untenable. Institutionally this will mean an Energy Union, which is another project that has already started and includes the express aim of reducing the influence of Russian-generated energy in Europe.
A close second on Europe's foreign problem list are the bloody confrontations on its southern (Africa) and south-eastern (Middle East) peripheries. The two immediate problems are (1) the massive influx of refugees, and (2) Islamic war tourism by frustrated young Muslims. Both the number of refugee arrivals and the probability of Islamic terrorism have shot up over the last two years in all European countries, regardless of their institutional links to the EU.
Herein lies the biggest challenge of all for the future development of the European Union. As we all know, nationalist and xenophobic parties, mainly from the right fringe, have ridden the twin topics of immigration and violent Islam, both supposedly caused by 'Europe', to more or less political centre-stage in a number of countries. Should any of these parties come to wield real power in an EU member country, especially a key country such as France, the Union could, for the first time since it started in the 1950s, be in real existential trouble.
The EU is many things, a Democratic Union it is not. Yet it will have to go down this institutional path too, as the European future will be determined in the last instance by its citizens. Now of course there is already a European Parliament with limited yet increasing clout. But former German Foreign Minister Joschka Fischer recently made an interesting proposal. He sees a democratic way forward by having EU affairs discussed and decided by a specially designated part of national parliaments.
Fischer's book is first and foremost a 'crie de coeur' by a convinced European. One might or might not agree with his sense of urgency as to the political crisis in European countries. But it is difficult to find fault with his conclusion that only a Democratic Union can carry Europe forward in a truly sustainable way.