Europe is in a race against time. After six years of economic crisis, extremist political parties are well-entrenched across the continent. Set against that, the European economy is in better shape than for some years. The question is whether economic optimism can return quickly enough to prevent the bloc’s politics slithering over the edge.
The signs of political rot are very evident. In France this weekend the far-right National Front (FN) notched up about 25 per cent of the vote in regional elections, confirming its strong performance in last year’s European parliamentary elections. Prime Minister Manuel Valls has warned that Marine Le Pen, leader of the FN, could actually win the presidential election in 2017. That same year, Britain could vote to leave the EU. And by then the single currency could also be well on the way to disintegration, with Greece out and Italy heading for the exit.
But while the political signals are still bleak, there are grounds for economic hope. Spain and Ireland, two of the countries that have suffered worst from debt crises and austerity economics, are finally recovering. Spain is expected to grow at 2 per cent this year and unemployment in Ireland will drop below 10 per cent soon. Even Greece, before the latest twist in the crisis, had experienced a return to economic growth. More broadly, the combination of lower oil prices, a falling currency and monetary easing by the European Central Bank should deliver a considerable stimulus to the EU economy this year.