Images: Getty Images (Carlos Gil; Kiran Ridley)
Amid these political currents, other issues are also becoming charged in Europe. The climate crisis has accelerated anti-capitalist activism, with movements such as Extinction Rebellion openly pursuing ideological issues beyond the environment. Alongside disruptive direct actions and street protests, higher-impact risks now stem from employee activism. Protest groups are likely to promote whistleblowing and the leaking of sensitive information. Belgium, France, Germany, Ireland, the Netherlands and the UK are where these groups are most active and are already pushing this approach.
Trade unions will probably also play a greater role in 2022 amid wide changes in working arrangements and conditions, and pressures on employers to adapt their models due to the impacts of the pandemic. There was a slump in industrial action in Europe in 2020 amid widespread lockdowns, but through 2021 we observed signs of this trend reversing. A rise in job losses and the cost of borrowing in 2022 would make it harder for businesses to meet demands from unions, increasing the likelihood of strikes and walkouts.
Austria, Belgium, Denmark, Ireland, Italy, Norway, Sweden and the UK have high levels of union membership by regional standards. This has correlated with high rates of industrial action, particularly in Belgium, and we forecast that these economies will be the most disrupted by strikes in 2022. Although Spain and France have comparatively low rates of union membership, unions there are very active in organising large and prolonged strikes. Indeed, alongside Belgium, France as Europe’s highest rate of lost workdays to industrial action in per capita terms.
Amid this potential for economic uncertainty and a sense of growing hardship, a key political theme that we forecast in Europe in 2022 is the apportioning of blame as governments try to manage a broad recovery from the pandemic. The proliferation of conspiracy theories driving political activism is one emerging trend in Europe we have monitored that appears to be gaining mainstream currency. A radical libertarian protest movement is also growing rapidly in western Europe, largely in response to Covid-19-related restrictions and vaccination policies.
Extremist groups on both the left and right have been quick to seize upon these shifts and promote ideas of opposing state-control and suppression, using Covid-19-related measures as examples to radicalise and mobilise more moderate people. There have already been signs of how disruptive this fusion of new ideologies and common grievances can be, with large and violent protests swiftly breaking out over new Covid-19 restrictions in late November in Belgium, the Netherlands, Austria, Italy and Croatia. Most such eruptions are likely through early 2022.
For now, this libertarian current appears to be limited mostly to activism and civil disobedience. But we are already seeing a tying together of radical left and right ideologies with populist themes, such as resisting corrupt political and economic elites, anti-capitalism and anti-immigration, often infused with conspiracist tropes. In the longer term, the hijacking of libertatarian and other new popular narratives of disaffection risks pushing up the potential for violence by fringe groups, and for far right and left political parties moving up in the polls.
Scroll down
The climate crisis has accelerated anti-capitalist activism, with movements such as Extinction Rebellion openly pursuing ideological issues beyond the environment.
Any ambitions the German and French governments have of unity and strategic coherence in the EU and with outside partners are likely to be disrupted by domestic issues across Europe, as much as by external forces. This is particularly so amid rising popular opposition to political and economic elites and demands for greater equality. Economic turbulence in 2022 is likely to be a major driver of such sentiment, with the IMF downgrading many growth forecasts for 2022. The causes of this are wide-ranging, from supply chain blockages, the continued impact of the pandemic to the cost of living, and socioeconomic inequality.
Indeed, we anticipate that the post-pandemic economic recovery will increasingly expose worsening inequalities in living standards in Europe. The material impacts of these disparities will probably be inescapable and present the greatest challenge to long-term political stability and governance across the continent. Most immediately, we anticipate economic discontent injecting renewed vigour into populist politics, and spur the narratives of radical left and right-wing parties and movements against liberalism, capitalism and notions of ruling elites.
Countries with high income inequality are plainly vulnerable to such discontent, particularly the Baltic states, France, Italy, Spain, Bulgaria, Romania, and the UK. While we do not forecast a EU-wide economic crisis with an recession in 2022, there are several threats to the recovery in these countries that will limit the ability of governments and businesses to respond. Key among these are rising inflation, overheated stock markets, and high government debt. Tax rises and cuts to public spending are likely triggers for public displays of anger, as are snapbacks in restrictions to head off resurgent Covid-19 outbreaks.
There are already significant inflationary pressures on global supply chains and rising energy prices. We forecast that this will force the hand of central banks to raise interest rates during 2022 in an attempt to rein in inflation. Amid already high prices and low productivity due to the pandemic, rises in interest rates would herald the end of a decade of cheap credit. And if not carefully calibrated, ‘they could slow economic activity enough to prompt businesses to cut costs, leading to job losses and stock market downturns, and making debt defaults more probable. A squeeze on living standards would probably follow, and with it cycles of discontent.
The EU relies on net imports for 61% of its energy consumption, based on the latest official Eurostat data.
Immigration is another highly charged topic that we anticipate populist and right-wing parties will exploit as they look to build public support through 2022. Crises and conflicts outside of Europe, such as in Ethiopia and Afghanistan, are likely to drive more people to seek to reach the continent. And amid economic challenges and perceptions that migrants cause an excessive financial and social burden, a rise in xenophobia, racism and hate crime and extreme right wing terorism looks very likely, with Germany, Italy, the Netherlands, Sweden, the UK, Poland and France particular countries to watch.
The challenge of migration is one the EU’s most intractable political dilemmas and vulnerabilities. The exploitation of migrants by the Belarusian government in late 2021 to pressure the EU into lifting sanctions, by drawing in refugees and diverting them to its border with Latvia, Lithuania and Poland speaks to this vulnerability, and the kind of state behaviour that Europe is increasingly likely to face. As it has in the past, we also anticipate that Turkey will modulate the flow of people into Europe to gain leverage over the EU, most likely as part of a long-running dispute between Turkey and Greece over gas exploration in the eastern Mediterranean.
Belarus and Turkey are not the only authoritarian states in Europe’s near abroad that look to exert leverage by coercive means. Russia will continue to occupy a critical role in European security and growth prospects, not least in the security of energy supplies. EU-Russian relations going into 2022 are at their lowest ebb since the end of the Cold War, and are likely to deteriorate further in 2022. The buildup of Russian forces near eastern Ukraine in late 2021 suggests another crisis may unfold there by mid-2022 that the EU, which is reluctant to impose further sanctions on Russia, seems unable to deter.
These sorts of external challenges show how systematically exposed the EU will be in 2022 to wider geopolitical instability and weakening rule of law in the international system. And it shows the dilemmas ahead for European governments if they fail to manage the risks that threaten the integrity of the EU and its economic recovery. Yet their collective willingness and ability to do so in 2022 looks limited indeed. In many ways, the harder the EU seeks to avoid crises as it tries to recover from the last, the more likely they will probably become.◼
The climate crisis has accelerated anti-capitalist activism, with movements such as Extinction Rebellion openly pursuing ideological issues beyond the environment.
Immigration is another highly charged topic that we anticipate populist and right-wing parties will exploit as they look to build public support through 2022. Crises and conflicts outside of Europe, such as in Ethiopia and Afghanistan, are likely to drive more people to seek to reach the continent. And amid economic challenges and perceptions that migrants cause an excessive financial and social burden, a rise in xenophobia, racism and hate crime and extreme right wing terorism looks very likely, with Germany, Italy, the Netherlands, Sweden, the UK, Poland and France particular countries to watch.
The challenge of migration is one the EU’s most intractable political dilemmas and vulnerabilities. The exploitation of migrants by the Belarusian government in late 2021 to pressure the EU into lifting sanctions, by drawing in refugees and diverting them to its border with Latvia, Lithuania and Poland speaks to this vulnerability, and the kind of state behaviour that Europe is increasingly likely to face. As it has in the past, we also anticipate that Turkey will modulate the flow of people into Europe to gain leverage over the EU, most likely as part of a long-running dispute between Turkey and Greece over gas exploration in the eastern Mediterranean.
Belarus and Turkey are not the only authoritarian states in Europe’s near abroad that look to exert leverage by coercive means. Russia will continue to occupy a critical role in European security and growth prospects, not least in the security of energy supplies. EU-Russian relations going into 2022 are at their lowest ebb since the end of the Cold War, and are likely to deteriorate further in 2022. The buildup of Russian forces near eastern Ukraine in late 2021 suggests another crisis may unfold there by mid-2022 that the EU, which is reluctant to impose further sanctions on Russia, seems unable to deter.
These sorts of external challenges show how systematically exposed the EU will be in 2022 to wider geopolitical instability and weakening rule of law in the international system. And it shows the dilemmas ahead for European governments if they fail to manage the risks that threaten the integrity of the EU and its economic recovery. Yet their collective willingness and ability to do so in 2022 looks limited indeed. In many ways, the harder the EU seeks to avoid crises as it tries to recover from the last, the more likely they will probably become.◼
The EU relies on net imports for 61% of its energy consumption, based on the latest official Eurostat data.
Amid these political currents, other issues are also becoming charged in Europe. The climate crisis has accelerated anti-capitalist activism, with movements such as Extinction Rebellion openly pursuing ideological issues beyond the environment. Alongside disruptive direct actions and street protests, higher-impact risks now stem from employee activism. Protest groups are likely to promote whistleblowing and the leaking of sensitive information. Belgium, France, Germany, Ireland, the Netherlands and the UK are where these groups are most active and are already pushing this approach.
Trade unions will probably also play a greater role in 2022 amid wide changes in working arrangements and conditions, and pressures on employers to adapt their models due to the impacts of the pandemic. There was a slump in industrial action in Europe in 2020 amid widespread lockdowns, but through 2021 we observed signs of this trend reversing. A rise in job losses and the cost of borrowing in 2022 would make it harder for businesses to meet demands from unions, increasing the likelihood of strikes and walkouts.
Austria, Belgium, Denmark, Ireland, Italy, Norway, Sweden and the UK have high levels of union membership by regional standards. This has correlated with high rates of industrial action, particularly in Belgium, and we forecast that these economies will be the most disrupted by strikes in 2022. Although Spain and France have comparatively low rates of union membership, unions there are very active in organising large and prolonged strikes. Indeed, alongside Belgium, France as Europe’s highest rate of lost workdays to industrial action in per capita terms.
Amid this potential for economic uncertainty and a sense of growing hardship, a key political theme that we forecast in Europe in 2022 is the apportioning of blame as governments try to manage a broad recovery from the pandemic. The proliferation of conspiracy theories driving political activism is one emerging trend in Europe we have monitored that appears to be gaining mainstream currency. A radical libertarian protest movement is also growing rapidly in western Europe, largely in response to Covid-19-related restrictions and vaccination policies.
Extremist groups on both the left and right have been quick to seize upon these shifts and promote ideas of opposing state-control and suppression, using Covid-19-related measures as examples to radicalise and mobilise more moderate people. There have already been signs of how disruptive this fusion of new ideologies and common grievances can be, with large and violent protests swiftly breaking out over new Covid-19 restrictions in late November in Belgium, the Netherlands, Austria, Italy and Croatia. Most such eruptions are likely through early 2022.
For now, this libertarian current appears to be limited mostly to activism and civil disobedience. But we are already seeing a tying together of radical left and right ideologies with populist themes, such as resisting corrupt political and economic elites, anti-capitalism and anti-immigration, often infused with conspiracist tropes. In the longer term, the hijacking of libertatarian and other new popular narratives of disaffection risks pushing up the potential for violence by fringe groups, and for far right and left political parties moving up in the polls.
Any ambitions the German and French governments have of unity and strategic coherence in the EU and with outside partners are likely to be disrupted by domestic issues across Europe, as much as by external forces. This is particularly so amid rising popular opposition to political and economic elites and demands for greater equality. Economic turbulence in 2022 is likely to be a major driver of such sentiment, with the IMF downgrading many growth forecasts for 2022. The causes of this are wide-ranging, from supply chain blockages, the continued impact of the pandemic to the cost of living, and socioeconomic inequality.
Indeed, we anticipate that the post-pandemic economic recovery will increasingly expose worsening inequalities in living standards in Europe. The material impacts of these disparities will probably be inescapable and present the greatest challenge to long-term political stability and governance across the continent. Most immediately, we anticipate economic discontent injecting renewed vigour into populist politics, and spur the narratives of radical left and right-wing parties and movements against liberalism, capitalism and notions of ruling elites.
Countries with high income inequality are plainly vulnerable to such discontent, particularly the Baltic states, France, Italy, Spain, Bulgaria, Romania, and the UK. While we do not forecast a EU-wide economic crisis with an recession in 2022, there are several threats to the recovery in these countries that will limit the ability of governments and businesses to respond. Key among these are rising inflation, overheated stock markets, and high government debt. Tax rises and cuts to public spending are likely triggers for public displays of anger, as are snapbacks in restrictions to head off resurgent Covid-19 outbreaks.
There are already significant inflationary pressures on global supply chains and rising energy prices. We forecast that this will force the hand of central banks to raise interest rates during 2022 in an attempt to rein in inflation. Amid already high prices and low productivity due to the pandemic, rises in interest rates would herald the end of a decade of cheap credit. And if not carefully calibrated, ‘they could slow economic activity enough to prompt businesses to cut costs, leading to job losses and stock market downturns, and making debt defaults more probable. A squeeze on living standards would probably follow, and with it cycles of discontent.