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Ian Bremmer

March 20, 2017 by Speakers' Spotlight

Five Facts About Europe’s Big Week

Specializing in US foreign policy, states in transition, and global political risk, Ian Bremmer is one of the world’s leading global political risk researchers and consultants. Renowned for merging the study of political science with current financial markets and trends, he provides financial, corporate, and government clients with information and insight on how political developments move markets. Ian wrote about the biggest stories to come out of Europe last week in Time magazine:

It’s been a big week for Europe; so big that it has the potential to shape the trajectory of the continent for years to come. Here are the stories you need to know.

UK

Rumors swirled that this was the week Prime Minister Theresa May would finally pull the Brexit trigger, kicking off the two-year countdown till the UK formally departs the EU. And it looked like the major hurdle to the decision had been cleared: the British House of Lords voted down two amendments to the Brexit bill on Monday. That still left serious questions: Will May be able to negotiate the divorce and terms of a new relationship simultaneously? Can the EU maintain a unified front in driving a hard bargain? And while those questions will bother markets through 2018, at least it looked as if the process would move forward after months of uncertainty.

But then despite Parliament’s green light this week, Downing Street set itself a new deadline for triggering Brexit: the end of the month. The cause of the delay? One Nicola Sturgeon, First Minister for Scotland.

Scotland

In last year’s Brexit referendum, 62 percent of Scots voted to “remain.” Scotland has been flirting with its own independence from the UK for some time now. It held a referendum on a Scottish independence in 2014, opting to stay part of the UK—and part of the EU—by a 10-point margin.

Sturgeon has been floating another Scottish referendum ever since the Brexit vote, but it was just this week she revealed plans to hold the vote between the fall of 2018 and the spring of 2019—in the thick of Brexit negotiations. Reports suggest May was caught flat-footed by the move, and has no intention of acceding to the Scottish referendum (which British parliament has to approve) until Brexit is over and done with. That might be in Scotland’s interest, too: the last time Scotland was eyeing independence, oil was at $115 per barrel and being touted as a crucial source of state revenue. It’s currently at $52 per barrel.

If Sturgeon plays the independence card, and voters choose “no,” it will be many years before Scotland can try again. Then there’s the issue of EU membership—Brussels has made clear that if Scotland wants to join the EU, it will need to apply for membership again. Won’t Spain block them to discourage Catalans from trying the same? More uncertainty coming down the pike.

France

And political developments in France aren’t helping any. Former front-runner Francois Fillon of the center-right Les Republicains was placed under formal investigation this week for misusing public funds to hire his wife and children as aides. There is scant proof that his wife worked to earn that salary (more than €900,000 paid over several years), and while Fillon claims that his children were paid as lawyers to do legal work, neither was a qualified lawyer at the time. While the investigation has been ongoing for months (dropping Fillon’s polling to 20 percent), this is the first time Fillon is being named specifically in the formal investigation. Bad timing—France is only one month out from the first round of its presidential election.

Marine Le Pen, the far-right leader of the Front National, is widely expected to make it through to the second round run-off. But she has legal problems of her own—tax authorities are looking into whether she undervalued two properties she owns. This is in addition to allegations she misused funds from the European Parliament, where she currently holds a seat. That would theoretically open the door wide for centrist Emmanuel Macron—except that prosecutors this week opened up an investigation into whether the economy ministry favored certain companies while he was economy minister.

The Netherlands

Dutch parliamentary elections typically fly below the global radar. Not this year. Two reasons for that: the first is Geert Wilders, an outspoken Eurosceptic, xenophobe and Islamophobe from a time before those views became politically fashionable. Wilders has been under police protection since 2004, and his rhetoric has spawned hundreds of death threats. It’s also led Dutch police to create a special form for citizens to file complaints specifically against Wilders. Dutch elections were the first major elections in the West to sport a populist as openly hostile to the Western order as Donald Trump, and people were looking to it as a bellwether ahead of French and German elections. Wilders and his Freedom Party underperformed expectations, coming in a distant second with just 20 seats; the big winner of the night was sitting Prime Minister Mark Rutte and his center-right VVD party, which captured 33 seats out of the 150 total.

The next step is forming a coalition government, which is something the Dutch know how to do better than almost anyone—every Dutch government since 1945 has been formed through coalitions. And while Wilders came in second, he won’t get to govern—most major Dutch parties had dismissed joining him in any coalition government prior to elections. So once again, Wilders is on the outside looking in.

Turkey

The second reason the world was paying attention to Dutch elections? A dust-up with Turkey. Turkey’s president, Recep Tayyip Erdogan, is gearing up for a constitutional referendum that would give him more powers. When Germany decided, for security reasons, to cancel a rally aiming to mobilize the 1.4 million Turks living in Germany who are eligible to vote in the constitutional referendum, Erdogan called the Germans Nazis. He did the same thing with the Dutch, who also cancelled a pro-referendum rally out of security concerns. Erdogan then doubled down, calling for all Turks and Muslims to vote against Rutte and German Chancellor Angela Merkel in upcoming elections.

This isn’t just bluster. Turkey still houses 2.9 million Syrian refugees, preventing them from crossing over into Europe as part of an EU-Turkey deal which promises Turkey €3 billion, visa-free travel for its citizens to Europe and “reenergizing” talks for Turkey’s possible EU membership—provided that Turkey undertake reforms of its domestic terrorism and press laws, among others. But Erdogan’s march toward soft authoritarianism—and his recent spitfire rhetoric—doesn’t make that look likely. And if the refugee deal breaks apart, a new wave of migrants will impact all five of these stories.

Ian Bremmer/Time/March, 2017

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