2024 Annual Forecast: Europe
By Antonia Colibasanu
Strikes and demonstrations are nothing new for Europe, but two factors distinguish the latest bout: its transnational nature and its concentration in specific economic sectors.
Farmers are or were recently protesting in Bulgaria, France, Germany, the Netherlands, Poland and Romania, while rail and other public transit employees have gone on strike in Bulgaria, Germany, Poland and Romania.
These features increase the potential for pan-European coordination among disgruntled workers and thus persistent and widespread economic and political disruption.
Further, sovereignty in the EU is distributed among various levels of government, complicating public efforts to respond to the unrest.
Perhaps the most important geopolitical risk concerns EU unity toward Ukraine, which is entering year three of its defense against Russia’s invasion.
A key component of Russia’s plan for victory entails creating or exacerbating divisions among Ukraine’s Western supporters, without whose support Kyiv would be severely outmatched.
Coincidentally, the European election calendar in 2024 is loaded, presenting multiple opportunities for the Kremlin to deploy disinformation and other hybrid attacks in support of its preferred electoral outcomes.
What’s more, several of the countries set to vote are geographically close to the Russian frontier, such as Austria, Finland, Lithuania, Romania and Slovakia.
However, the most important elections for Russia are those of the European Parliament in June.
The parliament itself is weak, but it helps determine the composition of the bloc’s executive, the European Commission.
The current commission firmly opposes Russia’s aggression toward Ukraine and has worked to maintain European cohesion in supporting Kyiv.
When Russia attempted to block Ukraine’s access to the Black Sea, the commission put forward funding for new infrastructure to facilitate Ukrainian trade.
(The project also helps consolidate NATO’s new containment line against Russia from the Baltic Sea to the Black Sea.)
The EU is also renegotiating its multiyear budget to include funding for Ukraine’s reconstruction, allowing member states to invest even before the war has ended.
Russia will do what it can to exploit socio-economic problems in Europe, so expect more protests and political instability than usual, especially in the first half of 2024.
One reason Europe wants to lock in long-term funding for Ukraine now is to get ahead of growing fatigue with the war and its associated costs.
The farmers’ protests are a prime example of said costs.
In Poland, Romania and other countries bordering Ukraine, farmers have demanded trade protections and have intermittently blocked border crossings to curb the influx of cheaper Ukrainian produce.
Being outside the EU, already highly competitive Ukrainian produce does not have to meet the bloc’s high standards and thus frequently ends up on the gray market.
Many truckers have joined the farmers’ protests, angry that Ukrainian drivers are undercutting their wages.
This despite the fact that Polish and Romanian farmers received financial aid from the European Commission in 2023 to cope with Ukrainian competition, and the transport sector has grown rapidly over the past two years as Ukrainian trade shifted to land routes.
Though there is an element of political gamesmanship and Russian manipulation at play, European businesses are facing real challenges.
In Germany, for example, where the government is searching high and low for savings after a court ruling forced it to overhaul its spending plans for 2024 and beyond, it was Berlin’s decision to cut a diesel subsidy that set off the protests.
Farmers across Europe already were complaining that the EU’s rising environmental standards, bureaucracy and free trade agreements threatened their competitiveness.
In fact, the German economy as a whole shrank in 2023 for the first time since the onset of the COVID-19 pandemic.
2024 does not look any better.
Under pressure from the U.S., Berlin is attempting to reduce its strategic vulnerabilities to China, but its broad and deep dependencies on Chinese trade and investment and a lack of good substitutes mean the process will be slow.
Meanwhile, Germany’s sluggish economy and the EU’s reimposition of tight public spending rules, among other factors, will weigh down European growth as a whole.
Next door in France, President Emmanuel Macron rang in the New Year with an overhaul of his government.
The move indicates not so much a change in strategy as a desire to break with the political tumult of 2023, which started with mass protests over pension reform and ended with protests over an immigration law.
Paris hopes to spend 2024 focused on other issues, such as creating jobs and raising labor participation.
More important, it wants to counteract the rising popularity of the far right, led by Marine Le Pen, which is poised to expand its influence in the next European Parliament.
With the most controversial changes in the rear view and new faces in the Elysee, France hopes to have left the worst of the protests in 2023.
Beyond its borders, France’s complex relationship with Russia – including their competition for influence in Africa – means it cannot ignore Ukraine.
At the same time, its distant territories and military bases in the Indian and Pacific oceans will continue to compel Paris to coordinate with Washington on global issues.
However, France’s primary focus in 2024 will be the Mediterranean.
According to the EU’s border agency, illegal border crossings into the EU exceeded 355,300 last year, the highest total since the peak of the migrant crisis in 2016.
Considering the current situation in the Middle East and parts of North Africa and the Sahel, the EU may face another refugee crisis this year.
The growing discontent with the political establishment suggests that mainstream parties might adopt some of the radical suggestions from both the far right and far left, particularly regarding immigration.
Concurrently, the recent surge in farmers’ protests toward the end of 2023 has thrust a range of topics related to EU policies into the spotlight, including the European Commission’s green agenda.
As political parties across the bloc intensify their campaigns for the 2024 election, European conservatives and anti-establishment parties are poised to leverage this dissatisfaction with green policies.
The debates surrounding green and migration policies are expected to dominate the 2024 political landscape, with their outcomes potentially shaping the strategic direction of the next European Commission.
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