How EU Becomes Stronger By Trump’s Criticism

In order to voice his complaints with the European Union, U.S. President Trump has minced no words.

The U.S. President has announced the U.S.’ withdrawal from the globally-endorsed Paris climate agreement, accused the EU of being “very protectionist” and has chastised NATO allies for not paying their fair share ever since taking office.

But exactly what a fractured European Union (EU) needed in order to band closer together could be provided by the bullying by Trump. The EU countries have bene forced to jointly defend their goals and strengthen ties with other global allies by his attacks on the European Union’s shared policies – like climate change, free trade and defense.

“He has indirectly vindicated the entire European approach,” Jacob Funk Kirkegaard, a senior fellow at the Peterson Institute for International Economics said during a television interview over phone earlier this month.

The fundamental ideology behind the EU was highlighted during last month’s G20 meetings in Hamburg where the manner in which real-world economic problems can be effectively solved when countries join together was exhibited, Kirkegaard said. When 19 countries endorsed the Paris climate accord – leaving the U.S. behind on the world stage, Trump’s “America first” philosophy was on full display at the summit.

“What it shows is that no country is independently able to, shall we say, change or undermine the global economic and financial system,” Kirkegaard said.

Spurring of a wave of nationalist victories across the continent due to President Trump’s election and the U.K.’s vote to leave the EU was the fear that European leaders had in mind. But during in elections in Austria, the Netherlands and France, voters rejected populist candidates who aligned themselves with the American president. Rising on a pro-EU message, France’s Emmanuel Macron rode managed to comprehensively defeat his far-right opponent Marine Le Pen wining a huge victory.

“Your victory is a sign of hope,” European Council President Donald Tusk tweeted in response to Macron’s win. “For a Europe that protects, wins and looks to the future.”

According to new research by Oxford Economics published Friday, since Macron’s election, optimism for the European Union has surged. Notably down from 28 percent in the second quarter survey and the lowest level in more than a year, only 19 percent of businesses cite a eurozone break-up as the key medium-term risk for the global economy.

Upbeat sentiment about the eurozone correlates with a drop in concern over European populism, said Jamie Thompson, Head of Macro Scenarios at Oxford Economics.

“Since the Le Pen defeat, concerns about that have collapsed,” Thompson said. “Of the eight top risk categories…populism is basically at the bottom.”

In response to Trump’s populist and protectionist threats, European leaders have stressed the importance of an integrated EU. A major trade deal that would remove tariffs on some exports between the two blocs was negotiated between the EU and Japan ahead of the G20 summit.

“The depth of this agreement goes beyond free trade… it shows that closing ourselves off to the world is neither good for business, nor for the global economy, nor for our workers,” European Commission President Jean-Claude Juncker said in a statement in July.

(Adapted from CNBC)

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Categories: Economy & Finance, Geopolitics, Strategy, Sustainability, Uncategorized

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