News Europe: War, hunger, Covid-19 cast a dark shadow over Europe

Since Russia’s invasion of Ukraine, Europe’s list of woes has grown steadily as it struggles with rising food and energy prices and the continued disruption caused by the Covid-19 pandemic.

From political upheaval to struggling industries and the threat of a migration crisis, European leaders face a myriad of threats to the stability and prosperity of the old continent.

Here is an overview:

– ‘Anti-system policy’ – Europe’s population is coming under increasing pressure as the war in Ukraine fuels rising energy and food prices and inflation generally picks up.

A study by insurance company Allianz Trade finds that ‘the worst is yet to come’ in terms of food prices, with an average increase of 243 euros ($260) in an individual’s food budget per year in the European Union .

“In the medium term, the cost of living crisis is forcing governments to mitigate some of the impact,” said Laurence Allan, director of Country Risk Europe at S&P Global Market Intelligence.

Europeans may turn to radical policies, especially if governments implement austerity measures.

The 2008 financial crisis was “the catalyst for the expansion of so-called anti-system politics,” Allan said.

Traditional parties suddenly faced multiple challenges to their dominance, with the emergence of parties such as Syriza in Greece, Five Star and Lega in Italy and Podemos in Spain, Allan added.

In France, “the three main political forces are now the centre, the far left and the far right,” said Agathe Demarais, global forecasting director at The Economist Intelligence Unit (EIU).

The far left and the far right in France have made purchasing power their main theme during the presidential elections in April and the upcoming legislative elections in June.

– Abused industries – The Western sanctions imposed on the Russian economy are intended to cut off the revenue of the country financing the war, but also to inadvertently harm the European economy.

“Sanctions against Russia weigh mainly on the European Union, are beneficial for China and cost nothing to the United States,” former French ambassador to Russia Jean de Gliniasty told the monthly Journal français de la Défense. National (RDN).

The German automotive industry is in particularly deep waters.

Already hit by shortages of semiconductors due to Covid-19 shutdowns, Germany’s auto industry is also facing “rising prices, especially of metals, due to the war in Ukraine,” Demarais said.

“Also, they are very exposed to the Russian market,” she added.

Airbus buys half of its titanium from the Russian company VSMPO-Avisma, but is looking for alternatives.

Boeing buys a third of its titanium from Russia but said in March it would no longer deal with VSMPO.

Eclipsed by China on one side and the United States on the other, European industries will have to invest massively to preserve a form of financial autonomy, made more difficult by the pressure to increase wages to limit inflation.

Meanwhile, China’s zero Covid strategy, which involves rapid lockdowns, mass testing and lengthy quarantines to try to wipe out infections, has added to global trade disruptions.

– Migration crisis – The war in Ukraine and Western sanctions against Moscow are disrupting the supply of wheat, fertilizers and other goods, compounding the hardships facing Africa and potentially leading to increased migration.

In the event of a massive influx, “disagreements loom on the horizon” between European countries that would echo the 2015 crisis triggered by the arrival of Syrian refugees, Demarais said.

“The subject will be politically instrumentalized by certain movements”, with uncertain consequences, Allan said, pointing to Spain, where a fragile coalition is in power and where legislative elections are scheduled for 2023.

“In a context of high inflation, tensions can restructure the European political landscape,” said Elvire Fabry, Europe researcher at the Jacques Delors Institute, a Paris-based think tank.

– Divisions – Disagreements among European leaders over how to handle the war on Ukraine also simmer below the surface.

“Despite the rhetoric on European unity, there are fractures, we see it in the facts,” said Jean-Marc Balencie, French geopolitical analyst and author of the Horizons uncertains blog.

The EU agreed earlier in the week to an embargo on imports of Russian crude oil, but Hungary, Slovakia and the Czech Republic were granted exemptions.

Beyond the war, the countries of Eastern Europe in particular “are questioning with virulence the Franco-German domination, which risks fracturing the EU in the long term”, declared Balencie.