EUROPEAN UNION

Europe in 2015: Investing more and keeping Russia in check

The new year will be a challenge for the EU. The economy has to be boosted with public investments worth billions, and a clear policy towards Russia is more urgent than ever.

"We will have a breath of fresh air, but not gale-force winds," said European Commission President Jean-Claude Juncker, when he was asked by DW if he expected any changes in 2015.

The EU Commission wants to give a new impetus to the EU's struggling economy and focus primarily on the creation of jobs and its investment program worth 315 billion euros ($381 billion). "Nonetheless, balancing the national budgets will continue to be important," Juncker said, hoping to reduce expectations in economic crisis countries such as Italy and France.

The Commission's economic forecasts predict a modest growth rate of 1.1 percent for the eurozone, with developments in single member states continuing to be markedly different: Germany will fare reasonably well, whereas other major eurozone countries will, more likely than not, stagnate. Jyrki Katainen, EU commissioner responsible for growth and jobs, has acknowledged that "the economic and employment situation is not recovering quickly enough."

Donald Tusk wants the EU to adopt an eastern perspective

In the following year, the European Central Bank (ECB) will continue to grapple with the consequences of the sovereign debt crisis and sluggish economic growth. Economic risks predominate, the ECB concluded in its recently published analysis. Cause for concern for the monetary watchdog is provided primarily by an inflation rate considered too low. The ECB stands ready to inject money into the markets on a massive scale; but when this step will be taken remains unclear for the time being. Italy can't wait for it, but Germany is stepping on the brakes, preferring, as usual, fiscal policy restraint.

Greece could fall behind again

The euro crisis, considered overcome by many in Europe, could return in 2015 on a massive scale. If Greece's far-left Syriza party, which is currently leading in opinion polls, wins snap elections, financial market confidence will likely be unsettled.

"The Greeks know very well what a wrong election result would entail," Juncker warned bluntly. In its analysis, the Goldman Sachs investment bank has been even more outspoken.

"In the event of a [Syriza-led government no longer paying its debts, leading to a] severe Greek government clash with international lenders, interruption of liquidity provision to Greek banks by the ECB could potentially even lead to a Cyprus-style prolonged 'bank holiday'," it said.

Greece, owing a total of 250 billion euros to the International Monetary Fund and various EU institutions, would tumble into financial chaos. A Greek tragedy would obviously affect other states with onerous debts: risk premiums for Cyprus, Italy, Portugal and, possibly, France would increase. This, in turn, would be poison for public budgets, which are to be used for investments as opposed to increased interest burdens.

Could 2015 be the year Britain leaves the EU?

UK on its way out?

There are growing centrifugal forces with the EU, not just due to the challenging economic situation but also because of a general dissatisfaction with Europe and "the guys in Brussels." This trend may continue with the elections to the House of Commons in mid-May. The UK Independence Party (UKIP) could triumph once again after its win in the European elections in May.

Driven by UKIP, British Prime Minister David Cameron has promised his voters to negotiate increased sovereignty for the UK with the EU. But German Chancellor Angela Merkel has already drawn a red line by assuring that "freedom of movement of EU employees is non-negotiable."

Cameron wants to limit immigration of EU citizens into the UK, in a bid to respond to growing xenophobia. If his plan fails, he might have to promote an exit himself, prior to the referendum on Britain's future within the EU scheduled for 2017. So, perhaps the EU will have to bid farewell to the UK as early as this May.

Such a development would plunge the European Union into a severe crisis, with euroskeptics in Hungary, France, Italy, Sweden, and Germany receiving a boost. In France, where right-wing populist Marine Le Pen is fighting for an EU exit and cornering weak socialist president Francois Hollande, the situation could escalate. Mediating between the UK and the remainder of the EU will be one of the main tasks for the new European Council President - the former Polish Prime Minister Donald Tusk.

Ukraine challenge

For Tusk, the main foreign policy crisis at the top of the European agenda is the Ukraine conflict and the EU's relations with Russia. As chairman of the heads of state and government, Tusk intends to advise the EU to look eastward and engage Russia in dialogue.

"I would like to integrate an eastern European perspective," Tusk said when he took office last month. Come March, the EU will decide on extending its sanctions against Russia, which will be a serious test of cohesion within the Union.

Already, there are voices in Italy and Hungary questioning the meaning of the economic sanctions imposed after the annexation of Crimea. Ukraine, Georgia, and Moldova have been invited to Riga for a summit in May organized by the Latvian presidency of EU.

Merkel will be central to the EU in 2015 once again

Speaking with DW, Latvian Foreign Minister Edgars Rinkevics said that the EU and NATO will have to develop an appropriate response to Russia's actions in Ukraine in 2015. "We need political dialogue with Russia, but because of his aggressive behavior also a kind of containment," he said.

Russian President Vladimir Putin, according to Rinkevics, will keep trying to test NATO. "We must be extremely careful."

In Brussels, the European Commission has made plans to commit to a diet in 2015 and cut down on bureaucracy, while continuing to bring relevant legislative proposals to the parliament. Whether it will succeed remains to be seen; parliamentarians have already been protesting against plans to dilute or reject entirely certain environmental laws.

Climate politics will play a central role in Europe at the end of the year, when Paris hosts the UN climate change conference in December. The EU is committed to setting binding targets to reduce greenhouse gases.

Waterloo, end of World War II

There will be plenty of opportunity for remembrance in 2015, as well. In May, the world will mark the 70th anniversary of the end of World War II, against the background of the current crisis on the EU's eastern border.

The long term consequences of annexation, conquest and the obliteration of entire states will also be reflected in another anniversary, when Europe marks the 200 years since the Battle of Waterloo in June. It wasn't far from the modern European capital, Brussels, that power-hungry French Emperor Napoleon suffered his decisive defeat. This year, the historic battle will be reenacted with thousands of extras in front of guests from all over Europe. In 1815, Britain, Prussia, Austria, and Russia were allies - while France was the aggressor.          dw de.