³ÉÈË¿ìÊÖ

I am surprised how many of my friends dislike New Year's Eve. I guess it is a sense that it is tempting fate to celebrate the year ahead when it may hold disaster and trauma instead of joy and hope.

Those inclined to miss the bubbly and stay in for the night will be gloomier than usual this time round. On this New Year's Day more people than usual will be looking to the future with fear and foreboding. The big story in Europe this year will be the economy, stupid.

Oh I know, 2009 is a big year for the EU in the institutional sense. European elections in 27 countries in June. A second referendum in Ireland. A new commission. If Lisbon is passed, the implementation of the treaty. If it isn't, another crisis and another institutional crossroads. I will be writing about that a great deal.

But for most people and politicians the recession will be at the front of their minds. If 2008 has taught us nothing else, it should make us painfully aware that we don't see the big ones coming. This year we celebrate the 20th anniversary of the collapse of the Soviet Union. Few saw that in their crystal ball. The financial crisis was equally unheralded by prophets, commentators or seers. But I feel it will be just as powerful a force in reshaping our world as the collapse of the communist empire.

So in a sprit of journalistic humility, I will essay not smooth predictions but awkward questions.

Even the most optimistic predict that the first half of the year will be tough, with many job losses and companies going bust. In much of mainland Europe this hasn't hit home. Particularly in Germany there is a sense that "it's not our fault" - which is substantially true... and leads people to think "so it won't be as bad for us" - which is arguable but, I fear, wrong.

What will unemployment, and increasing poverty do to our politics? So far there have been few vocal protests, few on the streets, marching against the bankers, or politicians or whoever else people might think to blame.

In some ways the economy is seen as a bit like the weather: it may be miserable but there's not a lot you can do about it. Will that change?

As governments turn to what might be called left-wing solutions will people expect more and more intervention? Will a Left that has lost both courage and rationale over the last couple of decades reinvent itself? Or will there be a surge of support for right-wing parties, an increase in nationalism and a move against immigration?

Or will protest find a new outlet in some movement that probably isn't yet more than a foggy notion in its future founder's mind? Will people vote again incumbent governments or hang on to the familiar?

What will happen to Europe's relatively generous health services and social security systems, as tax takes fall and those relying on state help increase?

Will the EU stick to its rather limited role in urging member countries to coordinate their recovery programmes? If so, is this a new modesty, an acceptance of a redefined, more limited role? Or will it press for a bigger budget so it can press ahead with new Europe-wide projects?

Will the rise of a new protectionism undermine the rationale of the EU? Or will there be a European protectionism that turns its face from global free trade?

So far, to the chagrin of those of us paid in pounds but living in the eurozone, the single currency has held up astoundingly well. But it is almost inevitable the strains inherent in the project will begin to show. If Greece needs a different level of interest rates than Germany, how will that be resolved? If the euro weathers the storm it will have proved itself beyond the reach of its critics, but can it survive the inevitable strains?

Conversely, how will the British see the pound if it continues to take a battering? Joining the euro seems politically inconceivable, but will other commentators follow in calling on people to look at the idea afresh?

I suspect that the economic crisis will eventually force a more profound revaluation of Europe's role in the world (and I am not just using the E word as shorthand for the European Union).

At the moment some European politicians think they have won the argument that European social market capitalism has proved its moral superiority to Anglo-Saxon free market liberalism. Are they right?

Or does the crisis see Europe not leading the way in the world, but revealed ever more clearly as an adjunct of the United States? With FDR Mark II in the White House will Europe be able to match the level of spending planned in the USA? If not, does it just sit by and wait for America to refloat its economy?

I wrote earlier in the year (or perhaps I just thought it) that the term "financial tsunami" was more apt than those fond of using it actually realised. The wave was towering above us, the chatter on TV and radio terrifying, but describing a situation that was having more of an impact on our morale than our wallets. That has begun to change and this year the full impact of the wave will be felt. But it will be a while, a long while I fear, before the tide recedes and the full account of the devastation can be made. In that smashed-up, battered, re-made world, will the West have a new, lesser role than before? Will Europeans have to get used to a substantially lower standard of living than before?

The old idea that China and India may have a cheap workforce but they don't have the creative dynamism or intellectual firepower, if ever credible, is now laughable: so how does Europe earn its living in the new world order?

Not by nature gloomy, I must admit at the end of this I feel rather more at one than usual with those friends who prefer to miss the parties and sit in the dark turning over memento mori in their unfestive minds. And a Happy New Year to all my readers!

• Bookmark with:
• |
• |
• |
• |
• - What's this?