The political setup within member states is becoming a priority for the survival of the European Union and the euro-area. European integration, through economic interdependence, has advanced through the interaction of grand coalition governments of various countries. The migrant crisis, instead, is polarizing national politics. 2017 will be the year when some of the largest countries in both the core and the periphery will see whether mainstream parties can take back control of the agenda. A cooperative game between member states could thus take place, favoring this outcome. Tackling the migrant crisis would thus go hand-in-hand with an accommodative fiscal and monetary policy.
Over the course of the next 12 months, popular consultations will take place in all the largest euro-area countries. Between December 2016 and September 2017, citizens will vote in a referendum in Italy, a general election in the Netherlands, a presidential election in France, and a federal election in Germany. Depending on whether a new election occurs in Spain, countries whose political systems are subject to popular vote in the next twelve months would correspond to roughly 70-85% of the area’s GDP.
National electorates have become less predictable since new arguments about open versus closed societies have taken center stage in political debate. New political movements, inclined to protect national borders, have emerged in most countries. They have also substantially undermined the traditional predominance of established parties that championed open borders and bore the standard of the old consensus in favor of Europe. In a third of EU countries, anti-EU parties are now members of government coalitions. They currently hold more than 1,300 seats in 25 national parliaments. With borders an essential part of the rhetoric in the debate regarding closed vs. open societies, the new parties' political orientation is unusually focused on international affairs, defining their politics as protecting against external threats. Although we keep referring to them as “fringe” or “non-mainstream,” these parties are actually hijacking the political agenda and forcing mainstream parties to align along their positions.
Inevitably, the question that would emerge by next year’s round of popular consultations is whether 2017 will become Europe's year of “redde rationem”?