The worst of the European financial crisis may be over but if the results of the recent European parliamentary elections are any indication, the European Union (EU) still has many challenges to contend with going forward.
Krister Thelin, former deputy minister of justice in Sweden and a keen observer of European affairs, believes the results of the elections—most noteworthy in France, where the extreme right-wing National Front Party had a landslide victory and in the United Kingdom, where the UK Independence Party (Ukip) came out as a frontrunner—are evidence of a “battle for the soul of Europe.”
This dynamic, he said, will continue to shape the direction of European Union policy and membership going forward.
“I think we can agree that the Euro crisis is certainly behind us,” Thelin said. “We have really turned a corner with respect to Europe’s financial and economic woes, with countries like Greece and Ireland back on track.”
And with respect to ensuring that financial crises of the same magnitude do not occur again, European countries are on board with plans to strengthen banking and financial sector framework.
Clearly, though, there are a number of other issues that will continue to challenge the EU, and will come to bear in one way or another upon the future of member countries and of the EU itself.
“The European electorate has spoken loudly,” said Stephen Peak, head of European investments at Henderson Global Investors.
Investors like Peak may not have made any changes to their European positions but the forces at play in Europe will shape the EU going forward and in one way or another, impact countries, economies, markets and investments. Here are some of the key issues the elections have raised:
Independence from the EU
At the height of the financial crisis, countries under duress expressed their will to leave the European Union. Today, that feeling is still strong, but from other quarters, namely France and the U.K.
Former British Prime Minister Tony Blair reportedly said the landslide victory of anti-EU parties in the polls showed “”deep anxiety, distrust and alienation from the institutions and key philosophy of Europe.”