The biggest risk is not taking any risk. In a world that's changing really quickly, the only strategy that is guaranteed to fail is not taking risks

Significant part of large European manufacturers work for export

Significant part of large European manufacturers work for export Dwain Ross ★★★★★

As a result of the economic recovery, the situation with unemployment has also improved, which also creates additional conditions for sustainable GDP growth due to good dynamics of personal consumption. In general, the EU economy in 2018 should not become unfavorable. In fact, serious problems in some EU countries are associated only with sluggish investment activity. Nevertheless, the economic situation in individual EU countries is still very different. For example, Greece, whose economic weight in the EU has decreased 1.5 times over the crisis decade, has not yet been able to enter the trajectory of steady catch-up growth. The situation with the economic dynamics in Spain is better, but the situation on the labor markets, as in Greece, remains rather critical. Finland has not fully recovered from the crisis caused by Nokia’s problems, where unemployment has been at 8.7% for several months.

In general, the EU economy turned out to be more successful in 2017 than many last year's forecasts showed. Our estimates were also too pessimistic, since we expected a significant negative impact on GDP growth of various political events - national elections in all key countries of the euro area, a pseudo-referendum on the independence of Catalonia in Spain, the beginning of specific negotiations on Britain's exit from the EU, a further influx of refugees from the Middle East and others. In fact, the economic dynamics in the integration group revived for a number of internal and external reasons, which does not cancel, however, the threat is intensified I have the negative impact of these factors contact.

By December 2017, almost no one had any doubts that Great Britain was determined to leave the EU, although the bulk of the negotiations on the conditions of Brexit would be in 2018, since the final document should be prepared by October. It is possible to expect mitigation of the negative consequences of a “divorce” mainly by maintaining the UK’s participation in most EU programs - including scientific, technical and regional policies, until the end of the current multi-year financial perspective - 2014-2020, as well as creating comfortable conditions that differ little from the current regime, for UK citizens in the EU and remaining after Brexit EU residents in the United Kingdom. At the same time, the possible new status of Northern Ireland is not fully understood, since during the negotiations there was a consensus on the need, in order to maintain internal peace in this territory with a frozen ethno-political conflict, to keep its border with Ireland, that is, the EU, transparent. It is obvious that business structures located in the UK will take into account Brexit’s parameters in their investment decisions, but over the past year it has also become clear that panic was prevented. Nevertheless, some slowdown in GDP dynamics in the United Kingdom is unlikely to be avoided.

The elections to the German Bundestag, which took place in September 2017, seemed predictable. Uncertainty in the victory of the CDU-CSU arose only for a short time after the change of leader of the SPD, when opinion polls in March suddenly showed almost equal chances for two “people's” parties - according to the Allensbach Institute, 34% to 33% in March after 36% to 23% in January, however, already in the summer, the gap between the CDU-CSU bloc, headed by Chancellor A. Merkel, and its main competitor, the partner in the "big coalition" of the SPD, again became significant - 39-40% against 24-25%. However, the political intrigue in Germany, which has clearly negative economic consequences, actually persisted. On the one hand, the new leader of the Social Democrats, M. Schulz, is opposed to the continuation of the "big coalition", which, due to the fact that the CDU-CSU has neglected the interests of the "junior partner", leads to a constant drop in the electoral support of the SPD. On the other hand, in German society, the popularity of parties with which at the federal level the "people's parties" are not ready to join the coalition is growing - first, "Alternatives for Germany", but also of the "Left". As a result, "Alternative for Germany" took third place in the elections, having first entered the federal parliament - 12.6% of the vote for the party list. In the new Bundestag, which due to the peculiarities of vote counting for both single-mandate constituencies and party lists simultaneously increased to 709 members - there were 631 mandates in the last parliamentary period, the record number of parties over the past half century, moreover, not a single pair of parties except members of the “big coalition” »Not gaining the majority. Initially, it was assumed that A. Merkel, whose block eventually gained only 32.9% and gained 246 seats, would create a coalition with two small parties at once - liberals from the FDP returning to the federal parliament - 10.7% and 80 seats and the Greens - 8.9% and 67 places.

However, the stiffness in the coalition negotiations of A. Merkel, which did not understand the new political reality, ended in a fiasco - the FDP left the negotiations, apparently remembering the negative experience of the last coalition with the CDU-CSU, which was worth the failure of the 2013 federal elections, founded in 1948 Even if the FRG manages to avoid new elections to the Bundestag, and almost no parliamentary party is interested in them, the new “big coalition” - and in December it was decided to start negotiations between the CDU-CSU and the SPD on the formation government, will pursue a more "eclectic" socio-economic policy in 2018, which is unlikely to contribute to accelerating the dynamics of GDP in Germany.

The elections in France were ultimately less dramatic than expected. In May 2017, the young populist E. Macron became the new president of the country in the second round. In June 2017, in the parliamentary elections again, as well as in the presidential one, where the extreme right leader M. Le Pen entered the second round, both the Republicans and the Socialist Party suffered a crushing defeat, while E. Macron's party “Forward, Republic! " Thanks to a majority system, it received 308 out of 577 seats. Moreover, according to some surveys of business representatives, E. Macron’s socio-economic policy of “neither left nor right” is generally perceived positively.

The situation is more complicated in Italy, however, there have not yet been any radical changes. In December 2016, Prime Minister M. Renzi resigned after the failure of his reformist ideas in a constitutional referendum. It was expected that in the fall of 2017 the country will hold early parliamentary elections according to a new system - similar to the German one, but the leading parties could not agree on this - the next elections will be held in 2018. However, the forecast of economic indicators for Italy as a whole does not illustrate much. Since the contrasts between individual regions of the country are very large. In different regions of the North-West, North-East, Center and South, the factors of sustainability of socio-economic development are very different. Whereas in the autonomous province of Bolzano is the former Austrian South Tyrol, per capita GDP when calculating purchasing power parities is almost 1.5 times higher than the EU average, and in Lombardy it is almost 1.3 times higher, then in Sicily, in Calabria or Campaigns of GDP per capita are 1.6-1.7 times less than the EU average. Unemployment in Bolzano is less than 4%, while in Sicily and in Calabria it is above 20%, etc.

Of the positive events for the EU economy, one can also name the prevention of radical steps by the separatists in Catalonia - in the coming years it will obviously remain part of Spain. As a result, the threat of a mass exodus of business structures from the territory of one of the most developed autonomous communities in Spain has been suppressed. Moreover, the possible expansion of the economic autonomy of Catalonia will affect economic dynamics in 2018 rather positively.

The relative success of the right-wing parties in the Netherlands and Austria in the 2017 parliamentary elections, in our opinion, will not in itself negatively affect the economic dynamics in 2018. However, one of the most important root causes of their electoral victories, the reactions of member countries, should be closely monitored. The EU addresses the refugee problem and, in general, the integration of foreign cultural migrants into the economic and social life of the integration group, as well as other pressing socio-political issues. On the one hand, the rise to power of young politicians can bring a fresh impetus to the development of the relevant EU countries through the search for ways to resolve inveterate problems. On the other hand, fears remain that radical steps can only exacerbate conflict. This, for example, already happened at the end of 2017 in connection with the proposal to issue Austrian passports to the inhabitants of South Tyrol, who left Italy after the end of the First World War, where so far the degree of separatist sentiments is low only in comparison with Spain, Belgium and the UK.

The problem of refugees has recently been of increasing concern to residents of the EU. As the regular sociological survey of the Eurobarometer in November 2017 showed, 39% of respondents include immigration among the two most important challenges for the EU - along with terrorism, which 38% named. For comparison: only 17% of respondents are most concerned about the macroeconomic situation, the state of public finances is 16%, unemployment is 13%, climate change is 12%, etc. At the same time, in all EU countries without exception, immigration was ranked first or second, with the most worried people in Estonia - 62%, Czech Republic and Hungary - 58% each, Poland - 54%. Apparently, this is precisely the reason for the opposition of the Visegrad Group countries to the placement of refugees in their territory, which is why the EU even threatens to impose economic sanctions against them. Such great attention to immigration, and as a common problem for the entire EU, was first registered in 2015 - the maximum indicator in one of the Eurobarometers was recorded at 58%. Back in November 2014, only 24% of respondents named it among the two most important challenges of the EU, while the macroeconomic situation was mentioned more often - 33%, and in 2011 it was mentioned generally by 59%, unemployment - 29%, and the state of public finances - 25 %

However, it should be noted that as the two most important challenges at the national level, immigration is put in first place only by respondents from Germany - 40%, Belgium - 29% and Austria - 28%, and in second place - in Denmark, Italy, Hungary and Malta. In 17 EU countries, according to the respondents, immigration is not even one of the three most important national problems, skipping ahead unemployment, as well as problems such as the quality of health care and social security, inflation, etc. On average, only 22% of respondents mention immigration in the EU. However, concerns about immigration are far from always realistically linked to big problems for the local population. The example of Germany is indicative, which, in the face of an influx of refugees, maintains one of the lowest unemployment levels. Moreover, the influx of new residents, with a chronically negative natural population growth, contributed to reinforcing the dynamics of German GDP due to an increase in total personal consumption - along with investments that are growing rapidly in the context of a favorable ECB policy.

In general, EU residents are quite optimistic about their situation - 71% of respondents from another Eurobarometer sociological survey believe that the EU is a place of stability in the world of problems - the worst result was shown by the UK, where only 60% share this opinion, followed by the Czech Republic with 61%, which apparently reflects the general level of Euroscepticism of their population. At the same time, assessments of the economic situation of the EU are less unambiguous - although the economic successes of the integration group are assessed better than the economic development of India or Russia, however, the US, China and Japan are more often regarded by EU residents as more successful in terms of economy.

Of course, the perception of the economic situation in individual EU countries by residents varies markedly, which largely reflects a wide range of indicators not only in terms of GDP dynamics or unemployment, but also, for example, the state of public finances. Unfortunately, the EU has come out of the crisis in the euro area with an even more diverse composition of states. As an illustration, we can cite the dynamics of public debt to GDP. In Germany, the indicator in 2017 fell below 65% - for three years - by almost 10%. Points and has every chance in 2018 to reach 61%, i.e. almost approach the “ceiling” set by the Maastricht criteria. In neighboring France, a similar indicator in 2017 amounted to almost 97% and is unlikely to change much in 2018 - over three years, it only increased by 2%. Item. The situation in Italy and other countries of Southern Europe is even worse. However, in the same euro zone there are the Netherlands, which already returned in 2017 within the 60% ceiling, or the Baltic countries, which never went beyond it.

In 2018, the EU countries will react differently to the global economic situation. This is also natural - for example, if Hungary, the Czech Republic and Slovakia have EU partners account for more than 80% of the commodity trade, then the UK, Malta, Greece and Ireland - only 50-60%. The international specialization of member countries varies greatly. As a result, the most innovative economies experience the least competitive pressure from the growing economies of Asia and other regions of the world with relatively low production costs.

The suspension of negotiations on the Transatlantic trade and investment partnership, the negative consequences of formalizing the UK exit from the EU, and by the end of 2018, these parameters are likely to be known, so that the business will begin to take appropriate investment decisions, it is very likely that the agreement will be signed in the first half of 2018 about the largest EU-Japan free trade zone in the world today - all these events will significantly determine the economic dynamics in the EU in 2018, but will have a different impact on the specific situations in individual member countries. In 2018, even the sporting successes or failures of national teams, for example, at the World Cup to be held in Russia, which is in a state of “sanctions war” with the EU, can have a short-term effect on the economy of individual countries.

In general, the EU economy in 2018 should not become unfavorable, unless there are any new foreign policy shocks. Within the framework of the integration grouping, countries have learned to compromise, and at the national level, in most cases, even without EU assistance, emerging economic troubles are overcome.

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