Why state of Europe's union is full of challenges

URSULA von der Leyen gives her first "state-of-the-union" address on Wednesday as European Commission president. Nine months into her new role, the coronavirus crisis has given rise to major challenges, but also a potentially historic "window of opportunity" for Brussels.

When Ms von der Leyen took office last December, she could not have foreseen that the pandemic would be the decisive challenge of her first year. Yet it has dominated the landscape and brought about a crisis-type environment that the EU has sometimes found most congenial to enable political and economic business to progress.

Take the example of the one big achievement delivered so far by Brussels under Ms von der Leyen's presidency. She was pivotal in July, alongside German Chancellor Angela Merkel and French President Emmanuel Macron, to persuading squabbling fellow EU leaders to agree to give the bloc, for the first time in its history, debt-raising powers to finance a 750 billion euro (S$1.2 billion) post-coronavirus recovery plan.

Yet, that major achievement may just be the first big one in the weeks to come. Another possibility is that of a post-Brexit UK-EU trade agreement which may yet be agreed, despite growing concerns about "no-deal", as soon as Oct 15, the UK deadline put forward by Prime Minister Boris Johnson.

Indeed, the fact that this window of opportunity has arisen for the EU reflects not just the economic and political stresses that coronavirus has brought to the continent, the worst economic shock for decades, but also Brexit. This is because the United Kingdom would have been sceptical of key elements of the agenda Ms von der Leyen is now pushing, including stronger EU defence union.

Aside from these key potential historic achievements on the horizon, Ms von der Leyen will outline her vision for the EU post-pandemic for the remaining four years of her term. So this will be a domestic manifesto for economic recovery, including through the EU "Green New Deal", at home, while enhancing Europe's security and foreign relations, abroad.

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Ms von der Leyen takes the view that in the year ahead it is critical for the more than 400 million population bloc to be ambitious and seize the initiative. The alternative, in her view, is further drift that has characterised EU affairs for many years.

For as well as opportunities on the horizon, there is also a potentially gathering storm too, including from growing populism. While Euroscepticism is sometimes seen as a western European problem because of Brexit, the populist surge in Eastern Europe, especially Hungary and Poland, is a major thorn in the side of Brussels too.

FRAGILITY

Beyond Brexit, the storm clouds highlight the fragility of the political situation across the continent. In recent years, as former European Council president Donald Tusk has argued, there has been a huge growth of domestic and external challenges that are without precedent in the post-war era.

On the domestic front, there has been a significant rise of anti-EU, nationalist sentiment across the continent which has seen populist arguments coming to the fore as well as the perceived erosion of the fundamental values of liberal democracy. While Brexit exemplifies this, the problem is by no means limited to the United Kingdom. Indeed, Emmanuel Macron admitted in 2018 that even France, one of the two traditional motors of EU integration alongside Germany, would probably vote to leave the EU if presented with a similar choice to the UK's 2016 referendum.

Ms von der Leyen is also aware that Brussels is very dependent, right now, on the political prowess of Mr Macron and Mrs Merkel. Yet, the latter will be out of office next year, and Mr Macron faces a highly uncertain election outlook in 2022. In that ballot, in just under two years, far-right National Front Leader Marine Le Pen (who finished second behind Mr Macron last time around and was US President Donald Trump's favoured candidate) will be a strong contender again.

Since his remarkable rise to power, Mr Macron has emerged as a staunch defender of the EU, and one of the most authoritative proponents of the liberal international order. Indeed, the young French president alongside Mr Trump currently embodies perhaps more than any other democratic leaders the present "battle" in international relations between an apparently rising populist tide, and the liberal centre ground.

Mr Macron's victory in 2017 against Ms Le Pen was so striking as it defied the march of populism in numerous countries which had seen parties of the left and centre ground sometimes taking a political battering. Mr Macron's win then appeared to represent at least a partial turnaround in fortunes - in Europe at least - for centre-ground politics after several setbacks, including the Brexit referendum, but he himself could yet become France's third consecutive president not to be re-elected.

On the international front is a new geopolitical reality from an increasing assertive Russia, instability in the Middle East which has driven the migration problems impacting Europe, and uncertainty from Washington with Mr Trump calling for more Brexits across the continent.

One of the distinctive ways that Ms von der Leyen has responded to this troubled environment is to double-down on relationships with key emerging market powers, especially Africa which has become a key foreign policy priority for her. However, beyond that continent, the Asian giants of India and China are also key and only on Monday Ms von der Leyen spoke to President Xi Jinping.

In the weeks to come, one key issue that could become pressing business relates to Russia given the continued demonstrations in Belarus after last month's disputed election result. The EU has offered mediation, and told Vladimir Putin that Alexander Lukashenko's government must stop using violence against peaceful demonstrators, enter into a dialogue with the opposition, and immediately release political prisoners.

The situation therefore remains very potentially combustible, and Mr Putin who met in Moscow with Mr Lukashenko on Monday has asserted that it is "unacceptable" for the EU to continue to place external pressure on the leadership in Minsk. Belarus is one of Russia's closest allies and a full member of two Moscow-dominated alliances which serve as alternatives to the EU and Nato in Europe - the Eurasian Economic Union and the Collective Security Treaty Organisation - in addition to the "union state" agreement.

Taken overall, Ms von der Leyen's speech will make clear that decisions this year and next will help define the EU's longer-term political and economic character in the face of multiple challenges and opportunities. With storm clouds gathering again, she will argue that now is the time for the continent, in the midst of continuing divisions, to come together decisively and forge a new path into the 2020s.