“This trade dispute with the United States comes at a time when the EU is already having to struggle with many other challenges,”noted National Bank Financial analysts and provided the below-seen list in the recently published report.
- The risk that the minority German government, led by Chancellor Merkel, collapses over the issue of immigration. Regardless of the outcome, a Germany preoccupied by its increasingly fragmented political landscape has less political capital to solving Europe’s challenges.
- The continued drop in support for traditional European mainstream parties at the expense of growing support for parties on the far right and left of the political spectrum. The most recent example of this is the election of a Eurosceptic Italian government angry over illegal immigration and EU-imposed fiscal austerity.
- Growing tensions with Hungary, Slovakia, Poland and the Czech Republic over issues ranging from state restrictions on the media and the judiciary to the resettlement of refugees. All of these eastern European countries are led by Eurosceptic governments.
- Ongoing Brexit negotiations that appear stuck between the inability of the UK minority government to agree on a coherent negotiating position and the EU’s hardline stance regarding market access.
- The view that the euro zone will be able to function properly over the long term only with a fiscal union and/or Eurobonds must be reconciled with the growing sentiment among the European electorate that integration has already gone too far.
- Continued instability in the Middle East and Africa, which is the main driver of illegal migration.
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