12

Crisis Years

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.

John Maynard Keynes, 1936

Fear of migrants has been coupled with likely exaggerated fears that radical Islamic jihadists will mix with the migrant flow and bring terrorism into a borderless Europe. Together with the long and unfinished euro crisis, these concerns are feeding right-wing and populist parties in Europe and undermining the credibility of the European Union …

The New York Times, 29 August 2015

From 2008 onwards a combination of crises shook Europe’s foundations. The worst financial and economic crisis since the 1930s imposed mountainous debts on European states, threatening to undermine the Eurozone. Huge flows of refugees fleeing from war in the Middle East accentuated political divisions and tensions. An increase in terrorist attacks in Europe intensified dangers to security. Crisis in Ukraine opened up the prospect of a new cold war between Russia and the West. And the European Union faced its own existential crisis as one of its member states, the United Kingdom, voted to leave it. What had long been presumed intact and solid seemed all at once to be crumbling. How had this multifaceted general crisis in Europe come about?

MELTDOWN AVERTED

The ‘Great Recession’, as it came to be known, was made in the United States, though with willing European accomplices. In no small measure its roots lay in the greed within the financial sector that overtook all sense of responsibility during the boom that preceded the crash. The banking crisis fed into a more wide-ranging crisis of public finances in almost all European countries. This in turn drove the economy into prolonged recession. The impact of such a sharp downturn in economic performance, of varying duration and severity in European countries, was to be felt for years to come.

The refusal of the US Federal Bank to provide any state funding to rescue Lehman Brothers in September 2008 ensured that the shock waves from the crash would trigger a global financial crisis. Banks had stopped trusting each other. The lending system was seizing up. The Americans had let Lehman Brothers go under, in accordance with the cut-throat logic of market economics. The colossal ensuing damage resulted, however, perversely for neo-liberal ideologists, in widespread recognition in Europe that the state had to step in to save ailing banks and prevent financial Armageddon. The unpalatable truth was that Europe’s major banks were too big to be allowed to fail. The top four British banks had combined assets in 2008 worth almost four times the gross domestic product of the United Kingdom. It was a similar story, with variations, in a number of other European countries.

The worst-affected countries in Europe were those that had tacked most closely to the winds of neo-liberalism and become most reliant upon a large deregulated banking sector. Britain stood in special peril. On 6 October 2008 the Royal Bank of Scotland, which had in the space of a very few years become one of the largest banks in the world, was within hours of complete collapse. British officials worked through the night to create a huge financial rescue package to avoid economic meltdown in Britain and, given the international operations of the bank, across the world. The package, aimed at protecting depositors and helping to stabilize the banking system, involved government loans totalling around £500 billion. Days later the Royal Bank of Scotland was effectively nationalized, as the United Kingdom government bought more than four-fifths of its shares and over 40 per cent of the shares in two other banks, the large HBOS and smaller Lloyds TSB.

France, Germany, Italy, Spain and Switzerland were among the European countries that in general terms followed the British model in making funds available for vulnerable banks. Ten banks in Central and Eastern Europe received financial support. Like Britain, many governments also offered guarantees for savers. Governments in Switzerland, Portugal, Latvia and Ireland took a controlling interest in several banks – in the Swiss case, the enormous UBS bank, which had turned into an over-extended global investment bank. In Denmark the Roskilde Bank, facing collapse in 2008, had to be taken over by the Danish National Bank.

Iceland faced especial difficulties. Proportionate to its size, its banking crisis in 2008 was bigger than anywhere else in Europe. Iceland had gone far towards tilting its economy towards banking and had deregulated in 2001. Its three major banks, Kaupthing, Landsbanki and Glitnir, had grossly extended their foreign debt which by 2008, as the trust of investors evaporated, they found themselves unable to finance. Iceland’s government did not have the resources to save the banks, which were effectively liquidated and new banks set up, backed by government funding to replace them. Domestic savings were guaranteed, but foreign investors and savers (also in foreign subsidiaries of Iceland’s banks) suffered losses. The impact on Iceland’s economy was profound, plunging the country into serious recession that only saw the first shoots of recovery in 2011. The volcanic eruption in Iceland in April 2010, spouting an ash cloud so wide-ranging that it paralysed international air traffic for several days, seemed to symbolize the damage caused by Iceland’s reckless, deregulated banking system.

Massive government intervention to save the banking system had meant a large-scale transfer of wealth from taxpayers to the banks. People had put their savings, and their trust, in banks, presuming that their money would be safe. Instead, they had seen that the banks had operated as little more than gambling casinos. Unsurprisingly, confidence in banks fell in the process to an all-time low. Anger and disgust were palpable, and wholly understandable, when people with very modest incomes and lifestyles watched those who had presided over the debacle walk away with no criminal actions against them and huge pay-offs. In one of the most blatant cases, the chief executive of the Royal Bank of Scotland, Fred Goodwin, who had steered the bank via huge expansion straight onto the rocks, was able to leave with a pension finally reduced to a mere £300,000 a year – decent compensation, perhaps, for eventually having to forfeit the knighthood bestowed on him in 2004 for ‘services to the banking industry’.

In 2007, according to official statistics, the public finances in the European Union had been at their strongest for decades. At 57.5 per cent of gross domestic product average government debt in the twenty-eight countries of the European Union was below the Maastricht guideline of 60 per cent. Only Greece (103.1 per cent), Italy (99.8 per cent) and Belgium (87 per cent) had unduly high levels of debt. Within two years the average government debt (otherwise called ‘sovereign’, ‘national’, ‘state’ or ‘public’ debt) for the twenty-eight member states of the European Union had risen to 72.8 per cent of gross domestic product and was still rising. The debt level of Greece, Portugal, Ireland and Italy, especially, had become alarmingly high. By 2009, as economic growth shrank by 4.2 per cent on average in the countries of the European Union, Europe fell into deep recession.

The Eurozone was in a specially difficult position. The early years of the Euro, framed by global economic growth, had been successful. But when the barometer pointed to stormy weather, its underlying structural problem was plainly exposed. Chancellor Kohl’s warning, back in 1991, that currency union without political union would in the long run be unsustainable, began to sound ever more prescient. Eurozone countries, their economies of widely varying strength bracketed together by the single currency, were in a bind when economic crisis struck. Currency devaluation in order to improve export competitiveness was not possible for member states. But nor was there a central government, as in the United States, that could direct economic policy, regulate taxation throughout the Eurozone, and – apart from subsidies provided through the EU’s Regional Development Fund – transfer funding to struggling, depressed areas.

The logic of the Eurozone pointed to greater banking, economic and political union, implying a central federal government with fiscal powers within a federation of nation states, analogous to the framework of the United States. But precisely this option was ruled out by the deepening popular opposition to any moves towards a federal European state. Any national government intent on active pursuit of such an aim would have invited prompt rejection at the ballot box. As the grip of economic recession tightened, the historic European heritage of national identities became strengthened rather than weakened. So Eurozone countries were left with both their economic and their political room for manoeuvre extremely limited. A return to national currencies, which was likely at least in the short term to prove calamitous for the standard of living, was desired only by a minority. Fear of worse was a motive in itself for clinging to the Euro. But avoiding collapse in the most badly situated countries depended upon bailouts agreed by the European Central Bank, the International Monetary Fund and the European Commission (none of them elected bodies), with the most stringent and incisive conditions attached.

By spring 2010 the debt crisis had carried some countries into dangerous waters. Ireland’s banks had financed huge spending on property, but when the property bubble burst and defaults on loans mounted, government guarantees to the ailing banks massively increased state debt. Spain, too, had to bail out banks that had suffered big losses from a housing bubble. Portugal’s mismanagement of public funds over many years and bloated public sector left the country with soaring public debts once its economy slumped in 2009. When doubts about capacity to repay grew and interest rates were accordingly increased, governments resorted to swingeing reductions in public spending – with obvious harmful consequences for the standard of living of citizens, and inviting a deflationary spiral of falling revenues from tax and rising debt.

Nor was their plight simply a matter for these countries alone. Together they constituted only 6 per cent of the total gross domestic product of the Eurozone. But the currency union meant that their looming insolvency threatened the stability of the entire Eurozone. These worst-afflicted countries had no means of escaping from their crushing financial difficulties without major help from other countries (Germany above all), channelled through the European Central Bank and the International Monetary Fund. At least, in contrast to the 1930s when each country was effectively left to deal with the Great Depression through its own devices, there was a basis of international support (though with tough conditions attached) throughout the Eurozone shown towards the plight of its member states.

Greece was a special concern. The country’s debt was deemed by Standard and Poor’s rating agency in April 2010 to have ‘junk’ status. Greece stood on the brink of defaulting on its debts and could not borrow on international money markets. It duly therefore became the first country to ask for, and receive, major financial assistance from both the European Union and the International Monetary Fund.

Over the following years a number of consecutive large assistance packages (or bailouts) were made available to Greece and smaller ones to Ireland, Portugal, Spain, Cyprus, Latvia and Romania. The bailout funding arrangements started as emergency rescue measures that were somewhat clumsily labelled as the European Financial Stability Facility (EFSF), then the European Financial Stabilisation Mechanism (EFSM). But they were soon turned into a more permanent bailout fund with yet another similar name, the European Stability Mechanism (ESM). These eased the crisis without solving the underlying structural problems.

Meanwhile, Europe had fallen into deep recession (officially defined as two consecutive financial quarters of negative growth). By May 2009, 21.5 million citizens of the European Union were out of work, nearly a quarter of them aged between fifteen and twenty-four. In Germany, Austria, the Netherlands, Denmark, Britain and a number of other countries unemployment remained relatively low. Elsewhere the situation was often dire. Spain, Greece, the Baltic countries and Ireland were the worst hit, with extremely high levels of unemployment, especially among young workers. Nearly one in five Spaniards were unemployed, double that ratio among young workers. Around two-fifths of Greek youths were unemployed. In Estonia the numbers of the unemployed quintupled in 2008–9, and tripled in Latvia and Lithuania. High unemployment remained the norm in these countries over the following years. In the Eurozone a second surge of unemployment occurred in 2011 just as the initial steep rise had begun to tail off.

By early 2012 one in three Greeks lived below the poverty line. Wages were cut – even the minimum wage was reduced by 22 per cent – as were pensions, and thousands of public-sector workers made redundant. Over 20,000 were homeless. Behind the statistics lay countless personal tragedies. A fifty-five-year-old plasterer who had lost his job outlined his own path from employment to homelessness. ‘From one day to the next,’ he recounted in February 2012, ‘the economic crisis hit me. Suddenly I was fired without any compensation … Two months later I couldn’t even afford my rent. All my savings had gone on paying medical bills for my late wife.’ He was evicted from his flat and for four months slept in his battered Toyota. Then he could no longer afford petrol for his car. He had to seek refuge in a shelter for the homeless. ‘It was a big step asking them for a bed,’ he remarked. ‘I felt very ashamed.’

The picture, if not so bleak as in Greece, was gloomy in many parts of Europe. In Italy, where production fell by almost 25 per cent, the recession damaged the economy for over five years – the longest recession since the Second World War. The Baltic states, too, were particularly badly hit. Their previously high growth rates slumped overnight. Latvia had negative growth of −17.7 per cent in 2009. Other Eastern European economies – Lithuania, Ukraine and Estonia to the fore – were not far behind. Recovery to 2008 levels was years away.

Not everywhere suffered greatly from the recession. Countries that had during the preceding boom years managed their economies prudently and had strong infrastructures withstood the buffeting from the storm with minimal damage and recovered fairly swiftly. The German economy soon bounced back. By 2010 growth had returned to a more than healthy 4 per cent. The controversial and painful reforms introduced by the Schröder government a few years earlier were now paying dividends. There had been no big credit bubble, and state finances were sound. Germany had retained a big manufacturing sector. Spurred by reorientation of its major export industries towards new markets, especially in China, and by big reductions in corporate taxes to make business more competitive, Germany was by early 2011 back to pre-recession levels of gross domestic product.

The Nordic countries – affected in different degrees by the economic downturn – also recovered relatively quickly, apart from Iceland. Denmark, though badly affected by the financial crisis, had earlier enjoyed large budget surpluses. The country’s fiscal position, with government debt below the EU-recommended level of 60 per cent of GDP, was fundamentally sound. And the Danish government promptly introduced measures to stabilize the financial system. By 2009 the economy was growing again and by 2011 it was recovering strongly. Norway was helped by its major oil exports, which even gave it a sizeable budget surplus. But its financial management before the recession had also been sound. Unlike Britain, which had profligately frittered away most of its windfall (amounting in today’s values to well over £160 billion) from North Sea oil on cutting national borrowing, industrial restructuring and tax cuts, Norway had prudently put it into a separate investment fund during the boom years, and reduced public spending while still providing an extremely high standard of living for its citizens. Sweden also recovered quickly and strongly from the global downturn and within two years could register high growth rates (twice as high as in the USA, for instance, which by then was also recovering). Like Norway, its relatively large public sector was sustained through support for the labour market, and there was increased, not reduced, spending on infrastructure, education and social security, health care and unemployment support. Moreover, Sweden had learned lessons from its own financial crisis of the early 1990s and had built a resilient, stable economy that created a healthy budget surplus in good years, affording some freedom of manoeuvre during the recession. It moved quickly to address financial problems, boosting demand through extremely low interest rates and penalties for banks that did not lend. The changes gradually introduced were consonant with those across most of Europe – privatization of former state monopolies, budgetary restrictions, somewhat greater flexibility in the labour market, and less generous welfare provision (notably pensions). But they remained moderate, not radical, and did not break with the long-standing framework of a state based upon a strong guarantee of a high level of social security for its citizens. Like Norway, Sweden could reckon with a high level of consensus across political divides for its economic strategy and implementation. The ‘Scandinavian model’ (with variations) that had its origins in the 1930s was, however, impossible to replicate for much larger, far less homogeneous nations where the political and social divisions ran far deeper.

Poland was exceptional among Central European states in avoiding the economic downturn. Bank lending there had been low, the property market was very small, and the government had not racked up debt. Moreover, as other countries fell into recession and working conditions deteriorated, two million migrant workers returned home, bringing their savings with them. And Poland was able to increase government expenditure and devalue its currency – remedies unavailable to the Eurozone. So Poland escaped a recession. Slovakia, which had drastically reformed its economy since it had been mired in corruption during the Mečiar era and had successfully attracted much foreign investment, also weathered the storm well.

By mid-2012 the worst was generally over. The Eurozone’s fragility had greatly diminished. Psychologically, an important moment came with the crisis still in full flow when the President of the European Central Bank (ECB), Mario Draghi, announced in July 2012 that ‘the ECB is ready to do whatever it takes to preserve the Euro’. Under a scheme entitled Outright Monetary Transactions, the ECB announced its readiness to buy government bonds issued by Eurozone member states that had been granted bailouts but regained access to private lending markets. The scheme was of further psychological value in underpinning the ECB’s determination to prevent the Eurozone from collapsing. No claims were in fact made under the scheme, since by 2013, apart from Greece and Cyprus, the Eurozone was on the way to a tentative recovery. By then well over 500 billion Euros (more than the annual gross domestic product of all but the largest and richest European countries) had been disbursed to the troubled economies, about a fifth coming from the International Monetary Fund, most of the remainder from the European Central Bank. The lion’s share had gone to Greece. But several countries were as late as 2015 still running worryingly high levels of public debt and had sizeable deficits. Greece remained the worst trouble spot, with a ratio of debt to gross domestic product at 177.4 per cent (60 per cent being the maximum theoretically permissible in the Eurozone), and aid was set to continue for years to come.

Other countries, too – Italy (with a government debt of 132.3 per cent of gross domestic product, and no indication of prospective decline), Portugal (129 per cent), Cyprus (107.5 per cent), Belgium (105.8 per cent), Spain (99.8 per cent), and even France (96.2 per cent, and not declining) – still gave cause for concern. The sovereign debt crisis was by this time far less acute than it had been – though only slowly improving.

The Eurozone had survived an existential crisis intact. But was it fundamentally healthy? Could the Eurozone survive another major economic shock that might lead to potential financial crisis in one of its bigger economies, such as Italy’s? Was the Eurozone, in fact, from the start a flawed project in its lack of a central fiscal authority? And was its rescue medicine likely to make the patient more ill rather than better? On these issues opinions among economists varied. The Nobel Prize-winner Joseph Stiglitz was the foremost among those economists who doubted that the Eurozone had a long-term future unless it introduced fundamental structural reforms. Among them he included replacing the economics of austerity by expansionist policies directed at growth, the mutualization of debt, converging economies by removing surpluses to the benefit of deficit countries, and using expanded credit facilities by the European Central Bank to invest in productive enterprise to stimulate the economy. So far, the political will to introduce such change has been lacking.

The Eurozone crisis had, in fact, led in the opposite direction to that advocated by Stiglitz. Vast amounts of money were certainly poured into the economy, though most of it went to save the banks, not directly to stimulate recovery. Further immense sums were spent by the Bank of England (£375 billion between 2009 and 2012) and later the European Central Bank (1.1 trillion Euros in 2015–16) in creating new electronic money to buy government bonds in order to increase the money supply – the method known as ‘quantitative easing’. This was a central part of monetary policy once interest rates had been reduced to almost zero, and was aimed at preventing deflation turning the recession into a disastrous depression, as had happened in the 1930s. In this aim the method could claim success. The recession would have been very much worse without it. But it was less successful in reviving the economy, largely because banks remained unwilling to lend and anxieties about the economy meant that people were reluctant to borrow. So most of the stimulus remained within the banking sector and did not pass down to the great majority of citizens. The quantitative easing was a sort of neo-Keynesianism, though primarily just to aid the banks. But little else followed neo-Keynesian methods. Once the recession had set in, the remedies largely followed neo-liberal prescriptions – retrenchment rather than expansionism. Debt reduction through austerity was the main message.

Whether that deepened and prolonged the recession has been much disputed by economists and remains an open question. Despite austerity, most countries actually saw their debt, proportionate to gross domestic product, increase during the recession and then only gradually decline. So had there been an alternative? A genuinely neo-Keynesian approach would certainly in the short run have increased public spending and indebtedness. However, investment in productive enterprise, skills, education and training could eventually have produced faster growth and lasting benefits. Where such methods were at least partially implemented, in Sweden, Norway and Denmark, they were effective. But there were special features to these Scandinavian economies, which enjoyed big surpluses before the economic downturn and a wide-ranging political consensus that was difficult if not impossible to replicate elsewhere. The financial room for manoeuvre of these Nordic countries was almost non-existent elsewhere.

Some leading economists argued forcefully, nonetheless, that spending cuts instead of an economic stimulus could only worsen and prolong a recession by throttling demand and reducing taxation revenues, thereby necessitating further cuts and perpetuating a vicious circle. There were, though, obstacles to pumping money into an ailing economy, even if the will had been present. The European Union’s own agreed rules on the highest permissible levels of government debt and deficits – even if they were massively breached during the worst of the recession – constituted a barrier to the adoption of an expansionist economic policy in most of Europe. And the EU’s pivotal country, Germany, anxious as always to avoid any risk with inflation, was the strongest advocate of sound finance. Germany had introduced the necessary structural reforms several years earlier to put its own house in order, ran the central argument. It expected other countries to adopt similar structural reforms. The Treaty of Fiscal Union, signed in March 2012 by leaders of all the countries in the European Union except for the United Kingdom and the Czech Republic, was forged by Germany and aimed to impose strict, legally enforceable limits on the size of national debt and deficits in accordance with the German financial model of rigid budgetary discipline.

Beyond these constraints on the introduction of neo-Keynesian policies there was another formidable obstacle: the confidence of ratings agencies in a country’s financial state. Credit Ratings Agencies based in the United States – the most important of them Standard and Poor’s, Moody’s and Fitch – could immediately inflict huge damage on a country’s financial standing through adjustment of its valuations of credit-worthiness. Adding to already high public debt through increased public spending ran the big risk of incurring the wrath of these agencies, making it more difficult to borrow on international money markets and thereby further undermining the potential for recovery. So containing debt through austerity carried the day in almost all government treasuries.

AUSTERITY POLITICS

As politicians struggled to master the daunting economic and social challenges during the recession, politics became more volatile. The political landscape started to be reshaped. Political fortunes hinged in each country, as usual, on a myriad of national issues. But among them practically everywhere was the question of how the government was handling the recession. Three general patterns (though there were exceptions) emerged. The first was that the political party in power, whether on the left or the right, when the recession set in was likely to suffer defeat at the next election. The second was that protest movements outside the mainstream ‘establishment’ were likely to gain support as trust in the political system was eroded. Millions felt intense anger at the mismanagement of the economy by their own governments, but also at the faceless power of globalized finance capitalism that had inflicted such misery on them. As so often, this manifested itself in the search for scapegoats – usually to be found among immigrants – and in nationalism that offered a sense of identity and belief in an ability to regain control that had been surrendered to international bodies.

A third common trend was that, with a handful of exceptions, governments of whatever colour adopted austerity measures. Government autonomy over a country’s economy was severely constrained. Real power lay, it seemed, beyond any individual state with the anonymous manipulators of international finance, the holders of government bonds, the rating agencies, and the institutions such as the International Monetary Fund and the European Central Bank that determined levels and conditions of support for ailing economies.

Although the economic crisis affected every country in Europe, those countries with pre-existing solid economic structures and stable political systems generally came out of recession quickly and without political upheaval (though Britain’s high dependency on its flawed banking system was its Achilles heel). This was the case in Germany, Austria, Switzerland, the Netherlands, Denmark, Norway, Sweden and – among the countries that had recently joined the European Union – Poland and Slovakia. Although economic turbulence naturally played some part in shaping electoral preferences, it figured alongside other factors and was not decisive in these countries. In fact, where governments already before the recession had gained some approval for their handling of the economy, their leaders could be seen by large sectors of the population as the best guarantee against major disturbance. The continued support in Germany, Europe’s most important economy, for the Chancellor, Angela Merkel, who conveyed a strong impression of calm control and solid assurance, and her able if rigid Finance Minister, Wolfgang Schäuble, who symbolized economic solidity, was one instance of this. Not only conservative parties such as the Christian Union in Germany continued in power; in Norway, for instance, the Labour Party remained the dominant political force.

Even where political stability prevailed, new political parties or older radical parties that had previously been on the fringes attracted greater popularity. Some felt betrayed by social democracy’s adoption of economic policies that they associated with the neo-liberal ideas of conservatism and turned to the more radical left. But the chief gainers were the populist movements on the right. In Germany the unpopularity of Schröder’s reforms still rankled among Social Democrats, who lost support to the more radical left-wing party Die Linke, while the Alternative für Deutschland, a new party on the right that opposed the Euro and the bailouts for Greece, soon started to gain eye-catching support. In Finland the major hallmark of the 2011 elections was the breakthrough of the Finns Party, a nationalist party that gained support for its opposition to a bailout for Portugal and its attempt to combat the harmful globalization that it associated in good measure with the politics of the European Union. The financial crisis in Iceland led to widespread popular protests that saw the liberal-conservative Independence Party lose a third of its support in the 2009 elections and fall from office after eighteen years in government. In Belgium the economic downturn exacerbated the long-standing and deepening linguistic and cultural differences between the wealthier Flemish and poorer, former industrial Walloon (French-speaking) regions, leading to further political fragmentation and an inability for almost a year in 2010–11 to form any national government at all.

Among some of the newer member states of the European Union in Central Europe the recession encouraged a reversion towards forms of authoritarianism, whether of the right or the left. In Hungary the election in April 2010 saw big losses for the Socialist Party. Viktor Orbán’s conservative Fidesz party returned to power with a large enough parliamentary majority to push through a nationalist agenda and constitutional changes that cemented Orbán’s hold on power, restricting a number of liberal freedoms and making inroads into the independence of the judiciary. An alarming accompaniment was the rise to nearly 17 per cent of the vote of Jobbik, a party of the extreme right that prompted strong echoes of the fascist past in its antisemitism and hostility to Roma.

Poland, too, was moving towards authoritarianism of the national-conservative right. The crisis in Europe gave long-standing political rivalries dating back to the post-communist transition a new, sharper edge. Both of the new parties founded in 2001, Civic Platform and Law and Justice, had arisen from the legacy of Solidarity, though with very different agendas. The liberal, free-market orientated and strongly pro-European Civic Platform had won most votes in the elections of 2001 and 2007. But its bitter rival, the strongly national-conservative, anti-liberal, Law and Justice Party, dominated by the twins Lech and Jarosław Kaczyńsky, widened the earlier base of support (extensive especially in eastern Poland) for its reactionary social programme in 2011 and went on to make big gains as the victor of the 2015 general election. Beata Szydło became the new Prime Minister.

Conspiracy theories contributed to the party’s success. In April 2010 Lech Kaczyńsky, then Poland’s President, had been killed in an air crash when flying to Smolensk in western Russia to commemorate the murder of over 20,000 Polish officers by the Soviet secret police seventy years earlier. Bad weather conditions and pilot error were to blame for the crash. But the Law and Justice Party continued to claim that the President had been deliberately killed by the nebulous forces of liberalism, communism or a weird amalgam of both. The claim was incorporated in the party’s growing assault on Poland’s liberals, hostility towards free-market capitalism and a more critical attitude to the European Union – all part of a heavy emphasis on ‘true’ Polish values. The migrant crisis fitted into the new climate. The surviving twin, Jarosław Kaczyńsky, the strongman of Law and Justice, spoke before the 2015 election of the danger of migrants carrying cholera to Europe and spreading ‘various parasites’. Authoritarian tendencies were unmistakable. Since becoming the governing party, Law and Justice has taken steps to curtail media freedom, to limit gay rights, and to increase political control of the judiciary.

In Romania the trend, following big protests about austerity policies and the fall of the conservative government held responsible for them, was also towards more authoritarian government, though here it was on the left, under the nominally social democratic Prime Minister, Victor Ponta. Under his aegis the powers of the constitutional court were weakened, the legal system was subjected to greater political influence, former members of the security services were retained in important positions, and corruption continued to flourish unabated. The key problem in Bulgaria was not authoritarianism, but government weakness, with widespread mass demonstrations against austerity politics and against the continuing unbridled corruption and organized criminality.

Parties presiding over austerity could also expect electoral rejection in the biggest western countries in the European Union. In Italy, Silvio Berlusconi’s government introduced cuts in public expenditure in autumn 2011 but proved incapable of offering anything that resembled a coherent programme for recovery. Berlusconi resigned in November and was replaced by a ‘technocratic’ government under Mario Monti, a financial expert and former European Union commissioner, who introduced further incisive spending cuts and tax rises. But the state of the economy worsened, mass protests (based upon the ‘Occupy Wall Street’ movement that had begun as an American protest at the financial crisis) grew, and Berlusconi announced that he was going to return to politics. Monti lasted only a year before resigning in December 2012. He had been backed by leaders of the European Union and by the International Monetary Fund. The German government, the key player in the European Union, also strongly supported Monti. Among the Italian public it was a different story. Monti had been persuaded to stand at the head of a new party, Civic Choice, but won only 10 per cent of the vote at the election in February 2013. That ended his brief spell in the limelight.

The election produced a political stalemate, leading some Italian commentators to remark that the country was ungovernable. Its most striking feature was the sudden rise, to garner a quarter of the vote, of a completely new protest party led by the comedian Beppe Grillo. That a comedian should gain such political prominence seemed a fitting commentary on Italian politics. After lengthy negotiations an unstable coalition under Enrico Letta, from the Democratic Party, who promised an end to austerity and a turn to policies of growth, was finally formed. Gunshots fired at the Prime Minister’s office on the day the cabinet was sworn in did not augur well. Silvio Berlusconi’s party, People of Freedom, lost heavily compared with the election of 2008; but it still won almost a third of the seats in both chambers of parliament. There would this time, however, be no further comeback for the great survivor. Convicted of tax fraud in August 2013, Berlusconi’s age – he was seventy-five by this time – saved him from prison. But he was barred from public office and expelled from the Senate.

France was no exception to the rule that those held responsible for the crisis were dispatched from power. Between 2008 and 2012 unemployment rose to worrying levels, poverty grew, the debt climbed continuously, as did the trade deficit, while growth scarcely crept above zero, consumer spending fell, and tax revenue declined. Failure to halt the economic malaise was the main reason for the narrow defeat in the presidential election of 2012 of President Nicholas Sarkozy, an increasingly divisive figure discarded after only a single term in office following his election in 2007.

The victory in the presidential election of 2012 of François Hollande, leader of the Socialist Party, was accompanied by optimism, among the 52 per cent of the electorate who had supported him in the second round of voting on 6 May 2012, that he would revitalize the economy. When the Socialist Party gained ninety-four seats in the National Assembly in parliamentary elections a month later, a new approach to the crisis seemed certain. But modest state intervention to try to stimulate the economy did nothing to dent the worsening malaise. A super-tax of 75 per cent income of more than a million Euros a year was abandoned after two years. It had raised too little to affect the economy, but was criticized for alienating the top innovators and entrepreneurs that France needed. Emmanuel Macron, who subsequently became Hollande’s Economics Minister (and in 2017 would be elected as President), warned that it would turn France into ‘Cuba without the sun’.

By then, much like his Socialist predecessor François Mitterrand had done in the early 1980s, Hollande had effectively reversed his economic strategy, moving in January 2014 to a more business-friendly, partially neo-liberal agenda of reducing labour costs and cuts in public spending. But Hollande was able neither to improve his own dwindling popularity, nor turn round the fortunes of a still worsening economy. As his hapless presidency dragged on and anger at the lack of improvement in the country’s plight mounted, Hollande became the most unpopular president in the history of the Fifth Republic. By November 2016 his approval ratings stood at a record low of 4 per cent. On 1 December he became the first French president to announce that he would not be standing for re-election.

In run-down former industrial regions of France’s north and east, and in poor parts of the south, many voters were meanwhile finding appeal in the nationalist, anti-Brussels message of Marine le Pen. She endeavoured with some success to detoxify the racist, neo-fascist image of her father, Jean-Marie. Her party, the Front National, won the highest proportion of the votes – almost 25 per cent – of any French party in the election to the European Parliament in May 2014. It was a sign that French politics would continue to be deeply unsettled.

In Britain the Labour Party, in office since 1997, paid the price for presiding over the banking debacle. As the lasting consequences of the banking crash became clear and Britain faced long years of recovery from such a severe economic recession, the Conservatives made great capital out of blaming Labour for the crisis, even though it was obviously global not national in its causes. And both state debt and the deficit on spending had been at manageable levels before the crisis. But the charge stuck. Another effective criticism was that Labour had failed to impose sufficient regulation on the banks, thereby encouraging the speculative bubble that led to the crisis. There was more substance to this charge. However, the Conservatives favoured deregulation even more than the Labour government had done, and had indeed themselves abruptly deregulated financial markets in the so-called ‘Big Bang’ of 1986 that had turned the City of London into such a vital centre of global finance. And, like Labour, the Conservatives would have felt compelled to rescue the banks in order to protect savers.

The undeniable reality, even so, was that the crash had happened under a Labour government. And since the initial financial crash the budget deficit had doubled while the level of government debt had also sharply increased. The increasingly beleaguered Labour government under Gordon Brown suffered defeat at the general election of 6 May 2010 and after an absence of thirteen years the Conservative Party, led by David Cameron as Prime Minister, returned to power, though only as the major force in a coalition with the Liberal Democrats and their leader Nick Clegg. Under the direction of the Chancellor of the Exchequer, George Osborne, the new government promptly embarked upon an austerity course to bring the deficit and government debt under control. The deficit did gradually and continually fall over the next four years, from 10.8 to 5.1 per cent of gross domestic product, though this was still well over Maastricht guidelines. Government debt, on the other hand, rose every year from 2010 to 2015, when it stood at 87.5 per cent of gross domestic product.

Recovery was painfully slow. Britain in recession was paying the price for tilting its economy since the 1980s so strongly away from manufacturing towards finance. Unlike the countries of the Eurozone, Britain had control over its own currency. It moved rapidly towards monetary easing. But despite the fall in value of the pound sterling by around a quarter between 2009 and 2013, exports remained sluggish and investments levels low. Unemployment fell, but many of the jobs available were poorly paid and insecure. Britain after 2010 had introduced the most severe fiscal consolidation of any of the large advanced economies but took longer to recover than any apart from Italy. When, finally, in 2013 modest growth started to return, it was in good measure dependent upon a buoyant housing market, consumer spending – much of it increasing private debt – and state expenditure which, despite austerity, it had proved impossible to cut as much as the government had initially intended.

The social cost of austerity politics was high. Most of it was paid by the poorer sections of society. Funding cuts in public services, largely passed on to local government, resulted in the closure of youth services, children’s centres, libraries, and other important facilities that sustain social cohesion. The recession magnified social divisions. The fact that several members of the cabinet, including David Cameron and George Osborne, had been educated at some of England’s most expensive public schools, burnished an image of a political elite that was completely detached from ordinary people who, as austerity started to bite, often struggled to make ends meet. The gulf in income and wealth widened. Some 13 per cent of overall income went to 1 per cent of the population – double the level in the Netherlands, for instance. Leading business executives had earned forty-seven times the average income of their staff in 1998; by 2014 this had grown to 143 times as much. And their income was increasing at a rate more than four times faster than the average earner. The median pay of top executives was now £4.4 million a year. Median earnings of the population was £26,000 per annum. Household income measured by what it would buy was nearly 6 per cent lower in 2013 than it had been in 2010. Average income for the worst-off 20 per cent of households lagged far below levels in the Netherlands, France and Germany. Yet in the most desirable parts of London property values were rising by more than 20 per cent a year, and the weekly rent for a luxurious house in plush Mayfair could cost more than most individuals would earn in a year.

Fewer people were able to buy their own homes and were compelled to live in often sub-standard rented property with too little protection from unscrupulous landlords. The neglect of house-building by successive governments over many years – and the absence of any social housing programmes to replenish the stock sold off since the Thatcher era – made itself acutely felt during the recession. Britain was one of the wealthiest countries in the world, but increasing numbers of citizens did not even have a roof over their heads. Those forced to sleep on the streets more than doubled in number in London between 2010 and 2017, and increased sharply in other major cities. The use of food banks to provide meals for the destitute rose by 1,642 per cent over the same period.

Riots in some cities in 2011 reflected anger and frustration – as well as criminal opportunism – among some of the most deprived sectors of society, including many youths from immigrant families living on desolate housing estates, who saw no future for themselves. They were at the social extremes. But as economic conditions worsened, attitudes hardened. Scapegoats were sought. Immigrants and the European Union were among them. They neatly joined together to offer a basic message to the growing numbers who were turning to UKIP, the United Kingdom Independence Party – essentially the British (actually in the main English) form of a nationalist, anti-globalization party of which versions could be found in many parts of Europe. ‘There’s Poles and Nigerians moved into this street,’ said one woman, a supervisor at a London supermarket on a very modest income but with a house that had nearly quadrupled in price since she and her husband had bought it back in 1997. ‘Nice people, work hard, buy their homes. But why are they here when we need the homes and the jobs? If we were out of Europe, we could put a stop to it.’ Here was the germ of the growing hostility towards the European Union: ‘Euroscepticism’, still a minority view in 2005, that was turning into outright ‘Europhobia’ and spreading.

The countries worst hit by the Great Recession – Portugal, Spain, Ireland and, more than anywhere else, Greece – saw establishment parties struggle as they contended with grave and mounting economic crisis. The Socialists, who had proposed spending cuts and sought a bailout, were ousted from government in Portugal, amid widespread anger and mass protests, in 2011. But the replacement government, led by the centre-right Social Democrats, imposed its own severe austerity measures as Portugal’s plight went from bad to worse. It paid the price in turn at the election of October 2015, when the Socialists returned to head an unstable minority government. In Spain the Socialist Party, compelled by deepening crisis to introduce austerity policies despite its early intention to provide a financial stimulus, lost almost four-fifths of its support at the November 2011 election. After imposing still harsher austerity, and beset, too, by corruption scandals, the conservative government that succeeded it paid the price in the 2015 election, losing a third of its parliamentary seats. But the Socialists were also rejected by the electorate. Two outsiders, the left-wing Podemos protest movement, and the centrist Citizens (Cuidadanos) party, between them won a third of the popular vote – an indication of the anger felt at the politics of austerity, which had undermined both of Spain’s major parties. Ireland experienced its own political earthquake when, at the February 2011 general election, the dominant centre-right Fianna Fáil party, held responsible for the country’s financial plight, suffered its worst defeat since the 1920s. Its main rival, the liberal-conservative Fine Gael, became the largest party in parliament for the first time in its history, which stretched back almost eighty years. An indication that the long-standing supremacy of these two parties was seriously weakened were the significant gains too for the Irish Labour Party and the nationalist Sinn Féin.

The level of government turbulence in Greece was exceptional – mirroring the scale of the economic disaster. Elections in 2009, with the economy already contracting sharply, brought defeat for the conservative governing party, New Democracy. Within weeks the new socialist PASOK government under George Papandreou announced that Greece’s public debt was far higher than had previously been admitted. The country did not have the resources to repay loans that were becoming due. The ratings agencies then heavily downgraded Greece’s credit-worthiness, making borrowing more expensive – if lenders could be found at all. The government responded by introducing draconian austerity measures. Salaries of civil servants were reduced, state pensions frozen and taxes increased. It was not enough. In April 2010 Papandreou requested an international bailout – the first in a series, as it would turn out. The Troika (as the representatives of the International Monetary Fund, the European Central Bank and the European Commission became known) agreed within a month to a loan of 110 billion Euros, though on condition of further severe austerity measures and restructuring of the country’s finances. Parliament reluctantly agreed to the demands.

On the streets of Athens huge protests registered public anger. Within a year the protests grew, organized in Athens and other cities by the Indignant Citizens (Indignados) anti-austerity movement. Violent clashes with police, who responded to demonstrations with brutal shows of force, increased. Some of the anger was directed towards Germany, seen as the power behind the Troika. Posters of the German Chancellor, Angela Merkel, with a Hitler moustache were a visible sign of the antagonism – absurd as they were.

Support for the main political parties dwindled. Papandreou was forced to resign in November 2011, to be followed by a shaky and ineffective coalition. Inconclusive elections in May 2012 necessitated still further elections only a month later. PASOK, the dominant party in Greece since the 1970s, only attained third place. Second, behind New Democracy (which led the new governing coalition), now came SYRIZA, a radical left-wing party, led by the charismatic Alexis Tsipras. Ominously, on the extreme right, the neo-fascist party Golden Dawn won twenty-one seats in parliament. As some sectors of the population sought scapegoats for their misery, Golden Dawn was able to stir resentment against the growing numbers of immigrants, a good number of them illegal, who had been arriving since the middle of the decade, mainly from Africa and the Middle East.

The remorseless cuts to living standards – falling overwhelmingly on the poorest – continued after a second bailout of 130 billion Euros was agreed in February 2012. The budget for health care was reduced by 21.7 per cent (contributing to a steep rise in infant mortality). The education budget was sliced by over a third of its pre-crisis level. Despite the external help, Greece defaulted on its debt repayments in March 2012. The national debt was restructured, and 107 billion Euros were written off. But it brought little relief. Practically all of the bailout funding was, in fact, necessary to service existing debt – only to incur new. Years of unrelenting and increasing austerity produced ultimately a debt mountain that was greater than when the crisis began.

Citizens were paying a high price for decades of badly run government. Greece had long had a bloated public sector, its bureaucracy was grossly inefficient, and tax avoidance came close to being a national sport. Benefit fraud was endemic. Thousands of Greeks were able to claim pensions for dead relatives. Restaurants demanded cash only as payment. Doctors did not declare a good portion of their earnings. Assets were hidden from view as a matter of course. Nearly a third of the gross domestic product, it was estimated, came from a shadow economy. And Greece’s expenditure on pensions, growing more than twice as fast as Germany’s or Italy’s and allowing most Greeks to retire early from their employment, was running out of control. So Greece certainly had to put its house in order. The rapidity and severity of the austerity was, however, politically and socially hardly bearable.

Even so, still further austerity measures were introduced in 2013. Thousands of public-sector jobs were axed in 2013 and further wage cuts made. By the beginning of 2014 the government could announce that for the first time in many years the budget was in surplus. The news was cold comfort to Greek citizens. In elections in January 2015 they threw out their government yet again. The once-mighty PASOK was by now reduced to a mere 4.7 per cent of the vote. A big swing to the more radical left brought victory to SYRIZA. Tsipras headed the new government (though he needed the coalition support of the small nationalist Independent Greeks party). His winning programme had been to reject outright a third bailout – entailing further cuts – that the Troika deemed necessary, even though there had been modest signs of the start of a recovery. He advocated a fundamental restructuring of Greece’s debt and an end to the politics of austerity. His recommendation to turn down a new bailout was backed by voters in a referendum in July 2015.

His Finance Minister, Yanis Varoufakis, whose extrovert personality soon made him well known to television audiences throughout Europe, argued vehemently for a new policy of restructuring debt – meaning in practice debt relief for Greece – and turning away from what, with some justification, he saw as a self-defeating cycle of austerity. But soon after the referendum Tsipras reversed his position and reluctantly accepted the terms of a third bailout – a loan of between 82 and 86 billion Euros to be paid in instalments until 2018. He thought it the best deal that Greece could achieve. Any alternative, he claimed, would have been ‘suicide’. Varoufakis, unable to implement the changes he thought imperative, had already resigned in July. The resignation of Tsipras, his popularity falling like a stone and faced by rebellions within his own party, followed in August.

A month later, after it had proved impossible to find an alternative government, new elections took place but brought no substantial change in the constellation, and Tsipras was called upon to head the government again. In May 2016 the initially anti-austerity Prime Minister was forced to introduce new austerity measures. Greece officially ended years of recession in 2014. In reality, however, the country’s woes were set to continue.

Had there been an easy way out of Greece’s unenviable situation, it would have been taken. As it was, every exit route was blocked off. As Varoufakis found out, fundamental debt relief – surely necessary for Greece’s ultimate recovery – faced opposition from creditors who themselves (as in the USA and the rest of Europe) absolved themselves of all blame for making the loans. Mutualization of the debt through the creation of ‘Eurobonds’ was firmly rejected by Germany and a number of other countries. German savers would not have tolerated the idea and, in any case, it might well have been regarded as incompatible with the German constitution. Keynesian-style government spending aimed at stimulating growth was impossible as long as the debt remained so high and borrowing so costly. And an orderly debt default in order to leave the Eurozone and return to the former national currency, the drachma, though advocated by some economists, ran the risk of devastating economic and political consequences, at least in the short term. Opinion surveys showed that Greeks wanted to retain the Euro. This was almost certainly less out of fondness for the new currency that, after early years of plenty, had been synonymous with enormous national misery, than from fear of what an alternative might mean.

Eight years after the beginning of Greece’s woes, in June 2017, after more than six months of wrangling over the terms, the Greek government accepted a further bailout of 8.5 billion Euros to avoid the country defaulting on its debts. The terms included the introduction of some liberal market reforms. But the worst impact of the agreement would fall upon poorer pensioners. Pensions, reduced twelve times since the start of the crisis and by 40 per cent since 2011, were scheduled to be cut by a further 18 per cent by 2019. The expectation was of strikes, demonstrations and political turbulence to follow. The only light at the end of a long, dark tunnel was that, finally, there was an expressed readiness on the part of lenders to take the necessary steps to reduce Greece’s mountain of debt and to ensure that it was sustainable in the future. Only then could Greece begin to look to the future with any equanimity.

The worst recession in eighty years had wrecked economies, toppled governments, and brought turmoil to the European continent. But Europe had survived it – if at a great cost, with much difficulty, and with some lasting fragility. There had been no collapse of democracy, no lurch into fascism and authoritarianism (though some of the trends in Central Europe gave much cause for concern, and support in many countries for anti-establishment populist parties, mostly on the nationalist-xenophobic right, would manifest itself over coming years). Civil society, despite the traumas, had proved resilient. And, whatever the policy weaknesses and failings, there had been a willingness to work together to tackle the problems of failing economies in ways that had been missing in the 1930s. There was certainly no room for plaudits. But in economic terms cautious ground for optimism was starting to return within a few years. Politically, the volatility was set to remain. And before the economic crisis was surmounted, or even held at bay, Europe faced another set of crises, this time emanating from the disastrous course of events in the Middle East. And here the limits of transnational cooperation in Europe were rapidly reached. Countries behaved almost entirely in their own national interest.

THE MIGRANT CRISIS

An ‘international migrant’, according to the United Nations, is ‘a person who is living in a country other than his or her country of birth’. In 2015 there were an estimated 244 million migrants in the world, 76 million of them in Europe. They had moved and resettled (for the most part legally) for a wide range of reasons: to avoid conflict, discrimination and violation of human rights; also to escape unemployment, poverty or famine in search of a better life; or simply for new job opportunities. Most migrants are not classified as ‘refugees’. The total number of refugees was far smaller, worldwide some 19.5 million in 2014 (about 8 per cent of migrants). An indeterminate number of the migrants to Europe in 2015–16 were driven solely or mainly by economic motives. But Europe’s migrant crisis was first and foremost a refugee crisis – of persons fleeing from war, persecution and forced uprooting from their homes, seeking asylum in European countries. Many, indeed, had already acquired the status of ‘refugee’ before travelling to Europe. Reports on the refugee crisis tended, therefore, to use the terms ‘asylum seeker’ and ‘migrant’ interchangeably.

By 2006 the number of those seeking asylum in the European Union had fallen to below 200,000. But from 2007 onwards the numbers increased gradually and reached crisis point in 2015, when the annual figure totalled around 1.3 million. More than half of the asylum-seekers came from three countries, Syria, Afghanistan and Iraq, each of them suffering grievously from war – for which the West bore a significant part of the responsibility.

Hugely overblown Western hopes in 2011 that popular uprisings against authoritarian rule in the Middle East – quickly labelled the ‘Arab Spring’ – would bring freedom, democracy and peace to this most turbulent part of the world, had quickly evaporated. Some powerful rulers – President Zine al-Abidine Ben-Ali in Tunisia, Colonel Muammar al-Gaddafi in Libya, and President Hosni Mubarak in Egypt – had indeed been toppled. But Libya descended into prolonged political chaos and in Egypt, under the former head of the armed forces, Abdel Fattah el-Sisi, the military were soon back in control. It seemed for a time that huge protests in Damascus and other Syrian cities would bring about the fall of the regime of President Bashar al-Assad (who had succeeded his father, Hafis, in 2000 as head of state). The West took it for granted for a time that Assad would be ousted. But the regime he headed was far from ready to crumble. And meanwhile, out of the chaotic descent into wholesale violence following the Western invasion of Iraq in 2003, promoted by American mismanagement of the country after the fall of Saddam Hussein, had emerged a singularly barbaric terrorist organization, Daesh, known in the West as the Islamic State of Iraq and Syria (ISIS, usually shortened to IS), a global jihadist movement of unprecedented brutality which by 2015 had extended its terrible rule over large tracts of Iraq and Syria. Millions had fled from the horror. Most found refuge in makeshift camps in neighbouring countries – Turkey, Lebanon and Jordan. But a surge of refugees now also made long and often perilous treks to Europe. By the end of 2015 the numbers reaching Europe in one way or another were more than twice as high as they had been the previous year.

Most refugees passed through the eastern Mediterranean and the Balkans, or through North Africa. Many gave the last money they possessed to unscrupulous traffickers who ferried them across the Mediterranean to Greece and Italy in dangerously overcrowded flimsy vessels. One of them, Ali, fleeing from Iraq with his four children, paid smugglers in Turkey 8,000 Euros for five places on a big sea-going yacht to bring them to safety in Greece. When they turned up at the isolated beach, however, there was no sign of the impressive-looking yacht. Instead, they were forced at pistol point to climb on board a small boat already laden with another eleven people. Halfway across to the Greek island of Kos the engine failed, the boat started to gather water and eventually sank. Greek coastguards were able to rescue some of those on board. But two of Ali’s children were not among the survivors; he could only watch as he lost them to the dark waters of the Aegean. This was only one of the countless human tragedies of the refugee crisis. In 2015 alone no fewer than 3,600 migrants were drowned as they tried to get to Europe. And over the vast area of the Mediterranean and Aegean the people smugglers invariably stayed one step ahead of policing operations.

Syrians attempting to reach Europe by boat joined large numbers of migrants from war-torn regions of Africa, and thousands of economic migrants trying to escape from poverty in Bangladesh, passing through Libya (where migrant smuggler networks could exploit the anarchic lack of control over Libya’s ports) to cross from North Africa to Italy and Greece. In 2015 these two countries – Greece still suffering greatly from the impact of the economic crisis – saw close to a million migrants land on their shores. Given the numbers, there was no way to check systematically the legality of those claiming refugee status. Most migrants wanted to head northwards. Germany and Sweden were their most favoured destinations. But they would soon discover big barriers in their way.

Border controls, dismantled in much of Europe since the creation of the Schengen Area back in the 1980s, returned to Europe – at least temporarily. In autumn 2015 in Central Europe, on the main migrant passages from the Balkans, Austria set up controls on its borders with Hungary and Slovenia while Hungary began construction of a high fence along its border with Serbia and also blocked its border with Croatia. Slovenia, after vain attempts to stop migrants entering the country from Croatia, also erected a fence. Slovakia set up temporary border controls with Hungary and Austria, Germany with Austria, the Netherlands with Germany. In Northern Europe, too, border controls were reintroduced – by Denmark, on its border with Germany, and by Sweden on its border with Denmark. Following an agreement reached between France and Britain in 2003 by which border checks were carried out on the French side of the English Channel, around 7,000 asylum-seekers who were trying to get to Britain, after travelling through the Schengen Area, found themselves cooped up in squalid, insanitary and inhumane conditions near Calais in a detention centre dubbed ‘The Jungle’. Harrowing reports about the appalling existence in ‘The Jungle’ and the desperate attempts, sometimes resulting in loss of life, of migrants to board lorries crossing to England, were broadcast almost daily on television. The French authorities eventually cleared the camp in October 2016, dispersing the remaining migrants to other locations within France. But by summer 2017 more than a thousand migrants had once more found their way to Calais, living there without access to toilets, running water or shelter, again prepared to take great risks to get to Britain.

‘The Jungle’ did much to protect Britain, not bound by the European Union’s policy on asylum (agreed in the Lisbon Treaty), from the refugee problem. Aware of the acute sensitivity of the immigration issues – and in the media and public consciousness immigration and asylum were easily conflated – the British government preferred to spend considerable sums of money (claimed to be £1.1 billion since 2012) on humanitarian aid in safe zones close to Syria rather than on giving refugees asylum within Britain. Only around 5,000 Syrian refugees were granted asylum in Britain between 2011 and 2016. The British government agreed to take a further 20,000 more by 2020. It was a less than generous response, given the magnitude of the crisis.

Hungary’s stance was especially intransigent. The country felt it was in the eye of the storm as some 50,000 migrants arrived during August 2015 – though the vast majority aimed to travel on to Germany. The Prime Minister, Viktor Orbán, warned of a ‘Muslim threat’ to Christian culture, a view shared by much of the population. By early September chaotic scenes on the border with Austria and at the railway station in Budapest persuaded the heads of government in Germany and Austria, Angela Merkel and Werner Faymann, to announce without prior warning that they would allow free passage of the refugees into their countries. Angela Merkel had already indicated that Germany expected to have received around 800,000 refugees by the end of the year (the actual figure, in fact, reached 1.1 million), and had said – to much amazement in other parts of Europe – that there was no upper limit. But she struck an upbeat tone. ‘We’ll manage that’, was her confident message.

Indeed, the early response was highly encouraging. Austrian well-wishers brought food, clothing and water to railway stations in Vienna and Salzburg. Crowds cheered the refugees as they poured from the trains arriving at Munich’s main station. Germany swiftly undertook to provide temporary accommodation, give each refugee a small sum of money, and make arrangements for them to learn German. The warm welcome had been stirred in part by the many heart-rending stories of suffering by the refugees, in their homeland and while fleeing from the horror of war. Humanitarian instincts were awakened when a lorry on the Austrian border had been found to contain the bodies of seventy-one refugees, or when photographs circulated in the world’s press of the body of a small Syrian boy who was washed up on the Turkish coast. But the long shadow of the German past unquestionably also helped to condition the country’s response, which amounted to a complete upturning of the values that had produced the catastrophic inhumanity of the Nazi era.

Opening the door to such a large influx of refugees practically overnight was bound to create enormous problems for overstretched authorities as they struggled to provide even emergency arrangements let alone organize more permanent integration. It was certain not only to raise hackles with many inside Germany, but also to alienate the leaders of other European countries who felt Merkel’s unilateral move, made without consultation, had subjected them also to intense pressure from the refugee crisis. Some of the strongest condemnation within Germany itself came from the more conservative, strongly Catholic sister party to Merkel’s Christian Democratic Party, the Christian Social Union in Bavaria, where around 25,000 refugees had arrived the previous weekend. The head of the party, Horst Seehofer, bitterly criticized the peremptory decision to admit so many refugees, saying that no society could sustain in the long run the numbers that Germany was accepting. Sure enough, the initial warm glow that had greeted the first wave of refugees gave way in part of the population – especially among the older generation – to coolness and often outright hostility. There was a sharp rise in the number of violent attacks on migrants, including 222 arson attacks on hostels where migrants were being accommodated.

A boost to anti-migrant feeling, and to the extreme right that was ready to exploit it, arose from events in Cologne on New Year’s Eve 2015 when large groups of young men, some of them newly arrived refugees from Syria, Iraq and Afghanistan, molested and sexually abused women who were enjoying the revelry. The disturbances prompted an immediate spike in hostility towards migrants, as a torrent of abuse on the internet demonstrated. And on the right there were characteristic voices of doom. One leading figure in the emerging anti-immigrant party, Alternative für Deutschland, spoke in alarmist tones of the events as a ‘foretaste of our country’s impending cultural and civilizational collapse’. The authorities (which had mismanaged policing in Cologne that night) swiftly took steps to prevent any recurrence of the criminal disturbances. Although the drama subsided and tolerance – outside right-wing circles – was generally sustained, the episode showed the shallowness of the liberal values that had appeared to be well ingrained in European societies and how quickly prejudice and animosity towards migrants could surface – and not just in Germany.

The limits of European solidarity in dealing with the refugee crisis were demonstrated by the unwillingness to accept proposals by the European Union for an equitable distribution of refugees. At the height of the crisis in September 2015, Jean-Claude Juncker, the President of the EU Commission, had presented a plan for a quota system in accordance with relative size of population. But the Visegrád countries (Hungary, Poland, Slovakia and the Czech Republic) refused to have anything to do with it, and within a year the proposed quota system had been abandoned. Nor was there much solidarity when it came to raising funds to aid people caught up in the Syrian conflict. The European Commission announced that it was prepared to spend 9.2 billion Euros to assist the handling of the refugee crisis. Member states were committed to match the funding from their national budgets. Few did so. A United Nations appeal to raise $9 billion in aid to the millions displaced by the Syrian War – estimated to be over 12 million people since 2011 – also fell well short.

The moral high ground that Angela Merkel had occupied in September 2015 was soon eroded when, pressed by the strong criticism of her ‘open-door’ policy and the need to stem the flow of refugees, she travelled the following month to Ankara to meet the Turkish President, Recep Tayyip Erdoğan, to broker a deal between the European Union and Turkey – itself the recipient of far more refugees from Syria than any country in the European Union. The gist of the arrangement was that Turkey would take in migrants returned from the European Union in return for a cash sweetener of three billion Euros, assurances on provision of visa-free travel by Turkish citizens, and active steps towards Turkey’s eventual membership of the EU. The ‘Joint Action Plan’ that followed led to an agreement in March 2016. ‘Irregular’ migrants crossing from Turkey to the Greek islands would henceforth be returned to Turkey, which would do everything possible to block sea or land routes for migrants hoping to enter the European Union. For every Syrian returned to Turkey from the Greek islands, another Syrian would be settled in the EU. And beyond the initial three billion Euros a further three billion would be provided before the end of 2018.

There was more than a whiff of hypocrisy about a deal that alleviated pressure on Europe through bribing a country which fell far short of standards of human rights and legal protection expected within the European Union. A year later tens of thousands of migrants were still languishing in dire, inhumane conditions in detention centres on Greek islands or on the mainland. Charity organizations registered increased numbers of refugees suffering not only traumatization from experiences in Syria or during flight, but depression, intense anxiety and even suicidal tendencies. By then fewer than 3,500 from around three million refugees in Turkey had been transferred to the European Union. From the perspective of the European Union that made the deal with Turkey successful.

The numbers of migrants trying to reach European countries dipped only slightly in 2016 from the high point of the previous year. Germany’s attractiveness as the destination of choice remained undiminished – 60 per cent of asylum seekers in the European Union headed there, slightly more in fact than in 2015. But a number of other countries – among them Sweden, Finland, Denmark, Hungary, Austria, the Low Countries – saw big decreases ranging between 53 and 86 per cent. The migrant crisis started to recede in Germany too. The numbers crossing from Libya to Italy remained high, however, though they fell sharply in the summer of 2017 following the introduction of a tougher Italian and Libyan stance towards traffickers but also a less liberal approach to rescue organizations. Possibly, the worst of the refugee crisis was over. European countries had to recognize, even so, that mass migration – if not in the critical and uncontrolled dimensions of 2015–16 – was here to stay. This was not just because Europe constituted a peaceful haven for those whose lives had been ruined by war and devastating political violence; it was also because the crass economic disparities that had become ever more glaringly obvious in the process of globalization had themselves ensured a population transfer from poor to rich countries which needed labour and whose own birth rates were low or even in decline.

A price that the European Union had to pay for its deal with Turkey was that it became unhealthily dependent upon a country that had played a part in aiding jihadists in Syria, had a dubious record on human rights and legality (as witnessed by the mass arrests in 2016 of tens of thousands of citizens following an attempted military coup against President Erdoğan), and was becoming both more authoritarian and gradually more Islamic. As relations between the European Union and Turkey worsened during 2016 – there was talk of economic sanctions against Turkey because of arrests and limits on press freedom after the coup attempt, and of freezing access negotiations – Erdoğan threatened to open the border gates to let the refugees travel to Europe. It did not happen, and, although Turkey remained in theory a candidate for eventual entry to the European Union, the protracted negotiations to that end had in reality stalled. The refugee crisis had, even so, strengthened Turkey’s hand and weakened the position of the European Union.

THE THREAT OF TERRORISM

The daily horror in Syria, filling the news channels each evening, intensified the thirst for revenge among an alienated, deeply disaffected small minority within the Muslim communities of Western European countries against societies whose values they utterly rejected and which in their eyes had inflicted such harm on the Muslim world. Consistent Western backing for Israel (despite the illegality of its settlement policy in the eyes of most of the international community) and lack of support for the Palestinians in the unending conflict had for long fed the growing alienation. The recent invasions of Afghanistan and Iraq had significantly added to it. Then there had been the intervention in Libya. The Syrian War came on top of all this. The internet provided a potent vehicle for spreading messages of hate. Some potential jihadists travelled to Syria and returned as hardened veterans ready to carry out terrorist attacks or equipped to indoctrinate malleable individuals to do the work for them. Some, whose numbers alarmist voices were swift to exaggerate, mingled among the refugees finding their way to Europe.

But the majority of those prepared to carry out terrorist attacks were home-grown, often radicalized by their personal experiences in the poor suburbs of big cities, sometimes from immigrant families which had endured discrimination for decades in the countries that had become their permanent homes. The primary motivation for terrorist attacks was usually impossible to determine with any precision, beyond the obvious purpose of instilling fear and attempting to turn communities against each other in mutual hatred in order to promote a ‘clash of civilizations’ that would undermine the foundations of Western liberal society. The perpetrators saw their ghastly actions as part of a perceived cosmic struggle between ‘believers’ and the ‘godless’. In perverted logic, they could adjudge the killing of innocent bystanders, even children, to be retaliation for the deaths of innocent Muslims through Western weaponry during wars in the Middle East.

France suffered more grievously than any other country in Western Europe. The Algerian War had left lasting scars of division and discrimination. And France’s uncompromising insistence on compliance with the secularized values of the Republic were a particular provocation to many Muslims. The imposition in 2011 of a ban on covering the face in public places was not confined to Muslims, but it affected Muslim women disproportionately. So there were specific grounds for resentment in France that did not apply in other countries. In addition, the socially deprived banlieus of Paris and other big cities provided fertile soil for hatred to germinate, spawned by the barely concealed racism of a sizeable sector of the population. Beyond these social grievances, the disastrous course of events in the Middle East offered a fertilizing agent.

On 7 January 2015 two gunmen from the Yemeni branch of Al-Qaeda entered the building in Paris of the satirical magazine Charlie Hebdo and opened fire with automatic rifles, killing twelve (including the editor-in-chief Stéphane Charbonnier) and injuring another eleven people. The gunmen, born in Paris of Algerian immigrant parents, were themselves shot dead by police, though not before they had killed another four people and injured several others in the aftermath of their initial attack. On the evening of 13 November 2015 coordinated terrorist attacks were perpetrated in Paris in cafés and restaurants and outside the Stade de France football stadium, when suicide bombings and mass shootings left 130 people dead and hundreds injured, including eighty-nine people killed while attending a rock concert at the Bataclan theatre in Paris. And on 14 July 2016 France experienced a new kind of horror when a heavy lorry was deliberately driven into a crowd of people in Nice as they celebrated Bastille Day, killing eighty-six people and injuring 434 others. A horrifying attack of a different kind took place on the morning of Tuesday 26 July when two terrorists burst into the Catholic church in a quiet suburb of Rouen, in northern France, and, shouting praise to Allah, cut the throat of an eighty-five-year-old priest as he celebrated mass. The shock waves from these attacks ran through the entire continent – and the wider Western world.

Whatever the specific components of France’s exposure to terrorism, the menace was a general one. Brussels suffered horrific attacks at the airport and an Underground station on the morning of 22 March 2016, when thirty-two innocent people (and three suicide bombers) were killed and 340 people left injured. Visitors enjoying a Christmas market in Berlin in December 2016 were the victims of an indiscriminate attack, reminiscent of the summer devastation in Nice, when a lorry drove at speed into the crowd, killing twelve and injuring another fifty-six people. Using the similar crude method in Stockholm, a lorry was driven on 7 April 2017 by a rejected asylum-seeker and ISIS sympathizer from Uzbekistan, into a crowd of shoppers, killing five people and injuring fifteen others.

The United Kingdom, with closely controlled borders, was less open to terrorists entering from abroad than the countries of continental Europe. But the deadly bombings of July 2005 had come from within. So did a lethal attack near the Houses of Parliament in London on 22 March 2017 when a car was driven into pedestrians, killing five people and injuring a further fifty. The perpetrator, who also fatally stabbed an unarmed policemen guarding Parliament, was again British – a fifty-two-year-old man who had lived under a number of identities, spent time in prison for violent crime, had worked for a while in Saudi Arabia, and at some point had converted to Islam. Although ISIS claimed responsibility, police believed that he had acted alone. On 22 May 2017, in the worst atrocity in Britain since 2005, a home-made bomb filled with screws and bolts intent on causing maximum casualties, exploded at the end of a pop concert in Manchester, killing twenty-two people (as well as the suicide bomber) and injuring fifty-nine others – many of them teenagers and children. It was carried out by a young Manchester man of Libyan origin, whose recent conversion to Jihadism had apparently occurred during visits to Libya through links to terrorist organizations that had flourished in the post-Gaddafi chaos. And in a third terrorist attack in Britain in less than three months, three young men from east London drove a van into pedestrians on London Bridge on the evening of 3 June then stabbed several people nearby, killing seven and injuring dozens more, reportedly shouting ‘This is for Allah’.

The simple but deadly method of intentionally driving a vehicle into pedestrians was used once again on 17 August 2017 when a van careered down one of the most popular tourist streets in Barcelona, killing thirteen people (another victim died in a subsequent attack in the coastal town of Cambrils) and injuring over 130 others in the Catalan capital. According to police reports, the terrorists had initially been preparing a bigger attack, which they had only abandoned after accidentally blowing up their stockpile of explosives.

Terrorist incidents occurred in Europe with greater frequency after 2014. No country was immune from the possibility of a terrorist atrocity. Not all terrorism was related to the disaster in the Middle East. Nor were all terrorist attacks carried out by Muslims. An abomination in liberal, peaceable Norway that had killed seventy-seven young Norwegians in 2011, most of them as they enjoyed a summer youth camp, was perpetrated by a deranged fascist and racist, Anders Behring Breivik. Many terrorist attacks in Russia had their origins in the war in Chechnya, the worst of them back in 2004 the massacre by Chechnyan separatists of 330 hostages (more than half of them children) in a school in Beslan in the northern Caucasus. However, the perpetrator of the more recent suicide bombing of the St Petersburg Underground on 3 April 2017, which left fifteen dead and forty-five injured, was a Russian citizen from Kyrgyzstan in Central Asia who did have links with jihadist organizations and was said to have spent time in Syria.

Numerous other planned terrorist attacks were foiled by timely police interception or prevented by surveillance from security services. Internet communications were a vital part of the new terrorism, inviting copycat attacks and enabling individuals or groups living in different parts of Europe to coordinate action. The open borders in much of Europe allowed easy transit to venues singled out for attack (and sometimes escape to other countries afterwards). And, whether or not there was actual contact with ISIS or Al-Qaeda, these organizations acted both as a spur to homespun terrorists to carry out attacks and afterwards used them in jihadist circles to advertise their own strength, usually claiming responsibility even where the assailants were acting alone and not under instruction. The major terrorist attacks, appalling and shocking as they were, lacked any potential to destroy Western civilization. They left a profound mark on Europe, nonetheless, adding feelings of physical anxiety to the sense of cultural insecurity that had spread during the migrant crisis. It was an alarming thought that significant numbers of people in Europe wished destruction on the peaceful communities in which they dwelled. In Britain alone, according to estimates of MI5, the inland security service, there were no fewer than 23,000 jihadist sympathizers. Nowhere felt safe from a potential attack.

In reality, large-scale atrocities – though almost a daily occurrence in parts of Iraq or Syria – were rare. Acts of terrorism had been statistically responsible for more deaths between 1970 and 1990 than from 1990 to 2015 (though the numbers, especially related to Islamist extremist violence, have been rising since 2011). So in numerical terms Europe had become more, not less, secure from terrorist attacks. It did not, however, feel like that. The random nature of the devastating attacks – often where crowds had gathered for innocent pleasure – was meant to heighten the sense of insecurity, and did so. The impact of terrorist attacks, preoccupying the mass and social media at inordinate length for days after any major incident, was enormous. Security services and politicians had a vested interest in emphasizing the threat. It was politically more astute to exaggerate a threat than to underplay it and then possibly experience a devastating attack. So the fear of being on some future occasion among those who were simply in the wrong place at the wrong time was greater than the genuine likelihood of becoming the victim of a terrorist attack. Even so, whether through ‘threat fatigue’, scepticism about the dire scenarios of security services, or simply ‘carpe diem’ fatalism, civilians rapidly recovered from the momentary shock of a terrorist attack and daily life returned to normal with astonishing swiftness. And an uncomfortable truth had to be faced: in a free and open society it was impossible to provide total security from acts of terrorism. For the foreseeable future, in globalized societies terrorism would be part of the price of freedom.

Two consequences of the migrant crisis and enhanced terrorist threat were of lasting significance. The first was that intensified security diminished civil liberties. Freedom to go places, see things, or move freely was in a variety of ways impaired. Security precautions, warnings, ubiquitous surveillance cameras or physical manifestations such as unsightly blocks of concrete outside public buildings exposed to possible ramming by vehicles became a regular part of everyday experience. Long queues at airport security checks or passport controls were accepted as the unfortunate but necessary price to pay to ensure safe travel. Attending any big public event or even visiting a museum also required patience to pass through security controls. All the precautions could be tolerated; freedom was limited, not destroyed. But life had become far less pleasant.

A second major consequence was that parties of the extreme right gained a fresh headwind. In Central Europe – Austria and Hungary, most notably – where the passage of migrants was most visible, the perceived threat to national culture through Muslim immigration benefited the right. But opposition to immigration was a potent factor in the increased support for nationalist parties also in much of Northern and Western Europe. UKIP won 26.6 per cent of the British vote, the largest proportion of any party, at the 2014 election to the European Parliament. (UKIP had far less success in the British general election the following year, winning only a single seat in parliament on the first-past-the-post electoral system though still gaining 12.6 per cent of the vote.) The Front National was backed by around a third of the French electorate. Alternative für Deutschland (founded only in 2012 and turning from initial Euroscepticism to an anti-migrant party) saw its support rise to more than 20 per cent of the electorate in a number of state elections during 2016. In the Netherlands the Party for Freedom led by Geert Wilders, who sought to have the Koran banned in the country and campaigned against what he called the ‘Islamization of the Netherlands’, became for a time the most popular party in the country during the migration crisis. Denmark, Sweden, Austria and Switzerland were among other countries in Western Europe to see a notable rise in support for parties focusing on what they saw as a threat from Islam to national culture. Nowhere did the nationalist parties win a majority of voter support. But their xenophobic rhetoric was not without effect on more mainstream parties. Europe, under the impact of the refugee crisis and increased terrorism, was unquestionably moving politically to the right.

The continent was changing. Long-standing liberal values were increasingly coming into question. The seemingly inexorable progress towards greater tolerance over the previous half a century or more was in danger of being reversed. There was some ambivalence, or even outright contradiction in attitudes. On the one hand, people saw the need for collective, transnational action to face Europe’s crises. An overwhelming proportion of people, for instance, according to opinion surveys, approved of the European Union’s role in providing humanitarian aid and thought individual countries lacked the resources to respond adequately to emergencies. On the other hand, citizens usually looked to their national governments for protection, while the migrant crisis and threat of terrorism contributed to the strengthening of negative attitudes towards the European Union. Open borders – signifying the freedom at the heart of the European project but allowing migrants to pass without hindrance across much of the continent – were now seen by many as a curse, not a blessing. The European Union stood for integration, international solidarity, tolerance and cooperation. But perceived as lacking solidarity, cohesion or effective strategies for dealing with the migrant crisis, the European Union seemed to many to be losing its raison d’être.

PUTIN’S AGGRESSION

While Europe was struggling to cope with the flow of migrants and simultaneously facing an increased threat of terrorist attacks, a different crisis was emerging in the east of the continent. On 18 March 2014 President Putin announced the annexation to Russia of Crimea – ratified by the Duma, the Russian Parliament, three days later. Apart from the invasion and occupation of the northern part of Cyprus by Turkish forces in 1974, it was the only instance of territorial annexation in Europe since the Second World War. Not only did this mark a serious escalation in the troubled relations between Russia and Ukraine: it brought Russia into direct confrontation with the NATO powers of the West. Anxiety spread among Russia’s neighbours, especially in the Baltic countries, that Russia was intent on further expansion. The spectre of a new cold war – or even worse – arose. Fear was once again palpable in Eastern and Central Europe.

The annexation of Crimea followed the outbreak of further great instability in Ukraine. The divisions and conflicts in a country that had not known independence before 1991 and had no uncontested sense of national identity had been far from resolved by the outcome of the ‘Orange Revolution’ of 2004. By 2010 the victor of the disputed presidential election six years earlier, Viktor Yushchenko, had forfeited practically all his support as a consequence of factional conflict, political disputes and allegations of gross corruption. But under the new president, Viktor Yanukovych, the endemic corruption and cronyism in Ukraine even worsened. As in Russia, a number of oligarchs made colossal fortunes by expropriation of property, often attained through bribery, threats or violence. Yanukovych’s son, Oleksandr, was among those who made rapid and immense gains. In foreign relations Yanukovych tried to steer a narrow path between the European Union and Russia. Moscow, however, looked unfavourably on Yanukovych’s stated ambition to take Ukraine into the European Union, the country’s professed long-term aim. And Russian objections could not be taken lightly; for Ukraine was dependent upon its powerful neighbour for its gas supplies. In November 2013 Yanukovych abruptly cancelled Ukraine’s planned Association Agreement with the European Union and advocated instead membership of the Eurasian Customs Union with Russia, Belarus and Kazahkstan. It is hard to imagine that he took the step without Russian pressure. It proved a fateful move. It provoked huge protests by hundreds of thousands of people, especially in the Maidan (Independence Square) in Kiev. In their wake violence escalated and government repression intensified. On 21 February, under pressure from the West, Yanukovych was toppled, a new provisional government was installed, and presidential elections were brought forward. Yanukovych fled by helicopter to eastern Ukraine and from there to Russia.

Putin was unlikely to take such a humiliation lying down. Crimea offered a convenient target for a Russian display of strength. It had been part of Ukraine only since 1954, Russians formed a majority of the ethnically mixed population, and it was home to Russia’s Black Sea Fleet – the harbour in Sevastopol was leased from Ukraine. Intervention in Crimea would both punish Ukrainian leaders for their anti-Russian stance, and win nationalist plaudits for Putin in Russia. It was inconceivable that the West would risk world war on account of Crimea. The inevitable economic sanctions were a price that could be borne. Such was Putin’s calculation.

Within days of the deposition of Yanukovych (now on poor terms with Putin though still regarded in Moscow as Ukraine’s legitimate president), armed men – though without national insignia – occupied the Crimean regional parliament building in Simferopol. A request to Russia for protection of Russian citizens of Crimea duly followed and was granted by Moscow. Over the following days Russian forces entered Crimea. The regional parliament proclaimed Crimea’s independence, then on 6 March expressed the wish to join the Russian Federation. This was allegedly backed by almost 97 per cent of the electorate in a referendum held on 16 March 2014. A formal parliamentary request to Moscow followed next day and was met by Putin’s announcement on 18 March of the incorporation of Crimea within the Russian Federation.

Diplomatic efforts by Western leaders to find a political solution to the Crimean crisis predictably came to nothing. Nor was Russia deterred by United Nations condemnation. All that remained, short of unthinkable escalation to the point of nuclear war, as retaliation for a plain breach of international law, was the resort to sanctions. Foreign accounts of Russians were frozen and travel bans imposed, but the European Union was limited in its actions by its dependency upon gas and coal from Russia. The sanctions were not likely to bother Putin unduly. And he could live with the suspension of Russia from membership of the G8 group of world leaders. Russia was isolated. But there was no likelihood of Crimea again being detached from Russia. At home, Putin’s popularity soared. Russian media trumpeted the ‘return’ of Crimea as a great national triumph. Even Mikhail Gorbachev said he would have acted no differently than Putin, had he been placed in the same position. Putin’s power-politics, a vestige of earlier times, had paid off.

Violence had meanwhile spread to eastern and southern Ukraine (centred on the Donbass industrial region), where ethnic Russians, who had migrated from the Moscow region in large numbers since the late nineteenth century to work in the coal fields, comprised much of the population. Surveys conducted by respected international opinion-research organizations showed that, while pro-Russian feeling was unquestionably stronger in those regions than it was in western Ukraine, only a small proportion of the population supported separatism while the great majority favoured a unitary Ukrainian state. Russian intervention in Donbass was opposed even by a large majority of opinion in eastern and southern Ukraine, and by a majority of Russian speakers. But opinion counted for little when Moscow was prepared to supply armed assistance to the separatists in eastern Ukraine. And, unquestionably, there were activists in local communities of the Donbass who were ready to fight to detach their region from Kiev and incorporate it in Russia. The insurgents were not simply marionettes dancing to Putin’s strings.

Pro-Russian protest demonstrations rapidly escalated from March 2014 onwards into armed conflict between separatist insurgents, increasingly backed by Russian arms and paramilitaries, and the Ukrainian government. The violence was unstoppable as long as it had Moscow’s support. Separatists stormed and occupied government buildings. The Donetsk airport was shelled. Heavy artillery, rocket launchers, helicopters and armoured vehicles were deployed in fighting that already by the autumn had cost hundreds of lives. In an appalling, related tragedy, a Malaysian Airlines plane was shot down by a Russian-made missile on 17 July, most likely by insurgents who mistook it for a Ukrainian military plane, with the loss of all 298 people on board.

Numerous international attempts to end the conflict, involving the United States, the European Union and the Organization for Security and Cooperation in Europe, including, too, the leaders of Germany and France and the newly elected President of Ukraine, Petro Poroshenko – one of Ukraine’s richest oligarchs – produced no significant breakthrough. There would be in all eleven separate ceasefire agreements between 2014 and 2017, none of long duration. The most significant attempt, the Minsk Protocol of 5 September 2014, reduced the fighting temporarily though there were almost immediate violations of the ceasefire that within a few weeks was a dead letter. A second Minsk ceasefire after talks between the leaders of Ukraine, Russia, France and Germany on 11 February 2015 fared little better. Despite the occasional glimmer of hope, Putin, certain of support back home for his stance on Ukraine, remained for the most part unbending, seemingly set on destabilizing the whole of Ukraine and preventing it from being drawn into the orbit of the West.

Poroshenko’s aim ran in precisely the opposite direction. His hopes of Ukraine joining the European Union were never likely to be fulfilled in the foreseeable future. The levels of corruption, economic and political mismanagement in Ukraine, and the need for major reforms before any prospect of membership could be entertained, were simply too great for the European Union to entertain the prospect. But the revitalized Association Agreement between Ukraine and the European Union reached on 16 September 2014 (though only scheduled to come into effect two years later) was an indication that Putin’s strategy of drawing Ukraine closer to Russia had backfired.

Within Ukraine itself, the forces in the conflict had quickly become well entrenched. Both sides were unbending. In September 2014 the Ukrainian Parliament, in the teeth of nationalist opposition, bowed to reality by granting rights amounting to near-autonomy for the Donbass. Elections held in most of Ukraine on 26 October 2014 brought victory for parties with a pro-Western stance, but separate elections (recognized only by Russia) in the Donbass on 2 November produced, unsurprisingly, overwhelming support for pro-Russian separatism. For the foreseeable future there was no obvious way to overcome Ukraine’s territorial division.

Still, Putin would not, and probably could not, back down. He could not jeopardize his standing at home, where, naturally, support for the separatists in eastern Ukraine was presented by Russian media as a matter of national prestige. Anyway, once opened, Pandora’s box of Russian-backed separatist violence in eastern Ukraine proved impossible to close – even assuming that Putin wanted to close it. Sanctions imposed by the European Union, gradually ratcheted up at each further display of Russian intransigence in Ukraine, had at first made no significant impact, though after September 2014, when they were extended to finance, energy and armaments as well as blocking accounts and bans on travel, they started to bite, contributing to a worsening of the Russian economy. The West’s only other option was to strengthen NATO’s presence in Central and Eastern Europe. Troop numbers were increased in Poland and the Baltic countries, and in 2016 military exercises in Poland were carried out. With Russia also carrying out military exercises – if within its own borders – relations between Russia and the West became more tense than at any time since the end of the Cold War.

By March 2017 nearly 10,000 people had been killed (a quarter of them civilians), many further thousands injured, and over a million people had been displaced by the fighting. In the intense propaganda war, truth was an obvious casualty. But there seemed little doubt that Russia had been the main instigator of the conflict. And without Russian backing – even though blatant attempts were made to conceal its extent – the separatists would have been unable to sustain their armed struggle. For Putin, the conflict was nevertheless far from a complete success. True, the Donbass had become largely an autonomous region. But Putin had driven most of Ukraine towards, not away from, Western Europe and strengthened Ukrainian national feeling in the process. Without Ukraine, his plans for a Eurasian Economic Union (as the Eurasian Customs Union had become – an intended counterpart to the European Union) amounted to little. Russia’s economy was meanwhile suffering significantly from the sanctions (and from the fall in oil prices). And Putin had perhaps irrevocably damaged Russian relations with the West. So why had he fostered the war in Ukraine, on top of the annexation of Crimea? What was his strategic aim?

The simplest explanation is the most plausible. In essence, Putin sought to restore Russia’s lost prestige and standing as a great power. A former KGB officer, he had spoken of the collapse of the Soviet Union as the greatest geopolitical catastrophe of the twentieth century. In his eyes (and the eyes of many of his countrymen) it had drastically diminished Russia’s status in the world and its pride as a great nation. Russia’s leaders continued to look upon the former Soviet republics as part of Russia’s own sphere of influence. But the fall of communism had inflicted humiliation on a once-mighty power in the eyes of many. While the United States bestrode the world as the single remaining superpower, Russia had descended into a mafia state run by powerful oligarchs who enjoyed the wealth of Croesus while most Russians suffered from an economy on the verge of collapse. It had been too weak to prevent the extension of NATO into what had formerly been the Soviet sphere of influence – even into the Baltic states, on Russia’s very doorstep. Although in Western eyes NATO was a benign organization, Russians saw it as a danger. NATO’s intervention in Kosovo in 1999, viewed in the West as a humanitarian act, had caused outrage in Moscow where it was seen as an abuse of NATO’s defined role as a defensive organization to protect member states. But Russia had been unable to stop it. Russia was, in sum, a former great power suffering during the 1990s from a profound sense of national humiliation.

Putin had certainly restored much national pride and internal strength. The conscious invocation of nationalism at every turn provided him with a solid base of popular support – a counterweight to widespread economic discontent. Ukraine and Crimea, part of the Russian empire since the eighteenth century, had been integral to Russia’s status as a great power, and later crucial components of the Soviet sphere of influence. Putin had spoken in 2012 of the task of reintegrating post-Soviet space. But the deposition of Yanukovych in 2014 vitiated the aim of cementing Ukraine’s dependence on Russia. The response was the decision to ‘return’ Crimea to Russia as part of the wider aim of destabilizing eastern and southern Ukraine and ultimately the whole country. In this broader aim Putin miscalculated. He had bound himself without an obvious exit route to the forces he had unleashed in eastern Ukraine. Impossible to back down, impossible to go forward, Putin had bogged down Russia for the indefinite future in the quagmire of eastern Ukraine. This probably caused Putin few sleepless nights. He could at least be satisfied that, as long as eastern Ukraine was controlled by Moscow, there could be no unified nation state of Ukraine that might seek to join the European Union and NATO.

At home Putin had won plaudits for his confrontation with the West. The Syrian War gave him a further opportunity to re-establish a dominant role for Russia on the world stage. The Russian military intervention in 2015, the country’s first outside the borders of the former Soviet Union since the end of communism, marked not only a crucial step in the terrible Syrian conflict, but also a new stage for Putin to attempt the restoration of Russia’s status as a world power.

The confrontation between Russia and the West over Crimea and Ukraine sent fear of a return to the dark past coursing through Central and Eastern Europe. Would it lead to world war? Would Russia annex other parts of Eastern Europe, and perhaps beyond? The fears, especially in the Baltic states that had suffered annexation by the Soviet Union within living memory, were understandable, though perhaps exaggerated. Crimea and Ukraine had left Putin with his hands more than full. Why would he wish to multiply his problems by trying to annex and hold down by force the Baltic states, whose very pronounced sense of national identity was (unlike in eastern Ukraine) in good measure driven by opposition to Russia? Nor was there any evidence that Putin had wider expansionist plans in Europe beyond what he had already undertaken. Intervention in Syria, meanwhile, was a case of Putin exploiting the weakness of American policy to demonstrate Russian strength and influence in the international arena in support of Russia’s traditional allies of Syria and Iran. But there is no indication that Russia harboured ambitions for a world role comparable to that of the Soviet Union. Its resources alone would not suffice for that. And restoration of Russian state power scarcely constituted an ideological aim likely to appeal to non-Russians.

The crisis in Ukraine had meanwhile subsided into a disturbing stalemate but posed no significant threat to world peace or to Europe’s wider stability. Whether, however, the European Union, for so long an essential pillar of that stability, could itself be sustained, came directly into question, however, as a consequence of a further strand of the continent’s general crisis: ‘Brexit’ – the decision by Britain to leave the European Union.

BREXIT

The fateful referendum on 23 June 2016 primarily, of course, affected Britain. But the impending departure of a member state – the first time that had happened – marked a critical moment in the evolution of the European Union, already under pressure from economic, migrant and terrorism crises, and tense relations with Russia.

‘Europe’ had been a running sore in British politics for more than two decades, and Britain had long been the European Union’s most awkward member state. Even so, the road to Brexit was a short one. A direct line can be drawn from the financial crisis, through the austerity politics and the impact of the refugee and terrorism crises, to Brexit.

Attitudes measured monthly between 2004 and 2016 showed, amid much fluctuation, an average of 44.7 per cent of respondents approving of membership of the European Union and 42.9 per cent disapproving. Disapproval rose sharply from 2010 onwards in the wake of the Eurozone crisis, even though Britain – to widespread sighs of relief – was not a member of the Eurozone. And as many in Britain saw their standards of living stagnate or even fall after the financial crisis, the United Kingdom Independence Party (UKIP) proved increasingly capable of winning support even in diehard Labour areas by linking the economic difficulties of white working-class voters who felt ‘left behind’ by globalization to ‘uncontrollable’ immigration from the European Union. A Bank of England analysis at the end of 2015 lent some credence to the claims of UKIP that immigration could depress wages for low-skilled British workers.

On top of this came the refugee crisis. Most British voters felt that the government should be able to control immigration, and that successive governments had failed to do so. This attitude hardened markedly once Angela Merkel had opened German doors – and therefore those of the European Union – to over a million refugees. And it was easy to use immigration to engender concerns about national security. Terrorists who had travelled through Europe alongside refugees were reportedly among the perpetrators of the horrific attacks in Paris in November 2015. Nigel Farage, UKIP’s leader, warned that Britain’s continued membership of the EU threatened the country’s security since ‘ISIS promises to flood the continent with jihadists’. A UKIP poster during the referendum campaign pictured a long line of Syrian refugees at the borders of Slovenia en route to Britain accompanied by the slogan: ‘The EU has Failed Us All’. This was the extreme end of the ‘leave’ propaganda, to be sure. But it was not without impact. Nearly half the population agreed that the risk of terrorism would be greater if Britain remained in the European Union. The need to control immigration was meanwhile seen as a priority by a far wider constituency than just UKIP supporters.

So the all-important issue as the referendum campaign began was the reduction of immigration from the European Union. As many as 69 per cent of Britons thought immigration from the European Union was ‘too high’. Immigration was coupled with a desire for restriction of welfare benefits to immigrants. It was not difficult for opponents of the EU to link immigration to the mounting pressure on the National Health System, the most treasured British institution, which, they claimed, was being ‘bled dry’ of resources by ‘health tourists’ and ‘creaking under the strain’ of unsustainable current levels of immigration.

This was the unpropitious background to the rash promise of David Cameron, the British Prime Minister, to hold a referendum on Britain’s membership of the European Union should the Conservatives form a majority government after the election of 2015. Cameron wanted primarily to blunt the edge of the anti-European lobby within his own party and halt the drain of support to the stridently Europhobic UKIP. He probably reckoned that in a likely post-election continuation of coalition government the strongly pro-European Liberal Democrats would block the holding of a referendum. The unexpected absolute majority that the Conservatives won in the 2015 election meant, however, that he thought he had no choice but to go ahead with the commitment to a referendum. A party-political tactic had become a gamble on the nation’s future.

It was a gamble that Cameron, supremely confident in his own powers of persuasion, was sure he would win. He was certain that, as in the referendum in September 2014 on Scottish independence (when Scottish voters had rejected independence for Scotland by 55 to 45 per cent), the electorate would ultimately choose the status quo. Most experts agreed. Cameron staked much on the outcome of a renegotiation of Britain’s terms of membership. But to most British voters the outcome, in February 2016, of his discussions with the leaders of the other twenty-seven member states was distinctly underwhelming. People quickly saw through Cameron’s claims that the negotiations had brought ‘substantial change’ to the terms of Britain’s membership, particularly on the critical issue of immigration. The European Union had adamantly upheld its key principle of freedom of movement of individuals. Cameron gained only the concession that access to in-work benefits could be restricted for up to four years and even then only for a seven-year period. That was minimal. The widely read tabloid, the Sun, rendered its verdict on the deal: ‘It stinks’.

Three-quarters of members of the House of Commons favoured remaining in the European Union. Cameron threw all his weight behind the ‘Remain’ campaign. But important members of his cabinet were given free rein to support ‘Leave’. Prominent among them were the Justice Secretary Michael Gove and the former Mayor of London Boris Johnson – a toff with the common touch, whose instantly recognizable mop of unruly blond hair and well-honed combination of buffoonery and verbal dexterity made this product of one of England’s most exclusive public schools (Eton) one of the most popular politicians in the land (if a highly divisive figure). Johnson was to play no small part in tipping the balance of the keenly fought contest towards a victory for ‘Leave’. Conservative ‘Brexiteers’ emphasized the restoration of sovereignty and reversion of democratic rights from Brussels to Britain. UKIP’s one tune was the populist refrain about immigration. But sovereignty and immigration were just two sides of the drive for Brexit. The arguments pushed in the same direction.

Only a handful of Labour politicians actively favoured leaving the European Union. But the ‘Remainers’ in the party often trod warily, well aware that many of their constituents were ‘Leave’ supporters. And a major weakness in Labour’s campaign was that the party leader, Jeremy Corbyn – for many years at best lukewarm about the European Union – was distinctly unenthusiastic, if not silent, in his support for ‘Remain’.

The mood in the country was fairly evenly split. The ‘Remain’ side posited almost everything on the likely negative economic effects of leaving the European Union, and the consequences this would have for the living standards of ordinary citizens. A formidable array of economics experts, business leaders, bankers and politicians from all parties except UKIP painted a dismal picture of the impact of Brexit on the British economy. The Chancellor of the Exchequer, George Osborne, conveyed the impression that drastic measures would be needed to combat certain economic collapse in the event of a vote to leave. But ‘Project Fear’, as the ‘Leave’ side dubbed it, had little effect. Many simply disbelieved it or regarded it as overblown propaganda. Their scepticism was encouraged when Michael Gove remarked during a television interview that people ‘have had enough of experts’ who claimed they knew what was best but were ‘consistently wrong’. It was a measure of how poorly many people viewed the European Union that the ‘Remain’ camp never sought to show the benefits of being in the EU. Most crucial of all, the ‘Remain’ campaign had no rhetorical weaponry to combat the key element of the ‘Leave’ case: control of immigration from the EU.

The slogan ‘Take Back Control’ hammered home by the ‘Leave’ campaign offered a simple and powerful message. And it was not just negative. Alongside the complete rejection of the European Union, it implied a brighter future. It combined in three words the vision of restoration of national sovereignty and the renewal of democracy with the power to halt unwanted immigration.

The ‘Leave’ campaign resorted to its own scare tactics – on the numbers of refugees likely to come to Britain, the threat of terrorism, the loss of national identity, and the damaging pressure on public services. Some of its claims were blatant untruths: that Britain was sending £350 million a week to Brussels which, when membership of the EU ended, would go to the National Health Service; or that Turkey might join the European Union by 2020, resulting in over five million extra people entering Britain. Neither the BBC, anxious to display even-handedness, nor the mostly anti-EU press did much to counter the lies.

When the votes had been counted and the result was announced on 24 June 2016, Britain was heading for the European Union’s exit door. Of the 72.2 per cent of those who went to the polls, 51.9 per cent voted to end Britain’s membership, only 48.1 per cent to remain. Scotland and Northern Ireland voted to remain; Wales and, by the largest margin, England, to leave. Older and less well-educated voters predominantly favoured leaving the EU, whereas younger and better-educated voters wanted to remain. A majority of those who described themselves as ‘White British’, but only a quarter of the ethnic minority electorate, voted to leave. London was overwhelmingly for remaining. So were big university cities (apart from Birmingham and Sheffield). But almost three-quarters of Conservative parliamentary constituencies and 63 per cent of Labour’s voted for Brexit. Outside the big cities, England was a Brexit country.

In the immediate aftermath of the referendum, David Cameron resigned as Prime Minister. After a brief power struggle within the top echelons of the Conservative Party, Theresa May emerged as the new Prime Minister. She had been Home Secretary for six years and, as such, responsible for immigration – an issue that remained of central importance to her. She had passively rather than wholeheartedly supported ‘Remain’. Once in office, she swiftly showed the zeal of a convert. Her task, she outlined, was to implement ‘the will of the people’. ‘Brexit means Brexit’ was her vacuous mantra. Three arch-Brexiteers were placed in charge of preparing the ground for the negotiations to leave. Boris Johnson, to widespread surprise, was elevated to the post of Foreign Secretary (once a high office of state associated with exemplary skills of diplomacy that few accredited to the new incumbent). Liam Fox, a long-standing militant opponent of the European Union and strong, neo-liberal advocate of free trade, was given the remit of winning new trade deals around the globe to compensate for the potential effects of a fall in trade with the European Union – Britain’s biggest trading partner by far. And David Davis, a bluff former contender for the leadership of the Conservative Party and strong supporter of the ‘Leave’ campaign, was appointed Secretary of State for Exiting the European Union, giving him chief responsibility for negotiating the deal to leave.

In January 2017 Theresa May announced the framework of Britain’s departure. It would involve leaving the Single Market (which Mrs Thatcher’s government had done much to set in place) and, probably, the Customs Union as well. On 29 March 2017 the Prime Minister formally notified Donald Tusk, President of the European Council, of Britain’s intention to leave the European Union. It meant lengthy negotiations with the other twenty-seven member states on the terms of Britain’s exit. Most neutral commentators thought the outcome was likely to be damaging to Britain. Even the future of the Union of Great Britain and Northern Ireland was at stake. Scotland’s First Minister, Nicola Sturgeon, angered at having Brexit forced on a country that had voted against it, posed the probability of another independence referendum which could break up the union with England that had existed since 1707. And the question of the border between the Republic of Ireland (a member state of the European Union) and Northern Ireland (about to leave the EU) was a thorny one with the potential to reopen the vexed nationality question throughout the entire island of Ireland.

There was shock and sadness expressed throughout the European Union at the British decision to leave. But far more than mere regret was at stake. The departure of one of its most important member states meant the need for serious soul-searching in the EU. What had gone wrong? Had Britain’s vote to leave reflected deep faults within the Union? Had Britain been at least in part pushed towards the exit door by centralizing policies and rigid principles that were also alienating citizens in other parts of Europe? How, if at all, could the fundamental structural reforms that so many observers saw as essential for the long-term survival and good health of the European Union be devised, let alone implemented, given the variety of different and often competing interests of member states? Brexit had obvious, if unclear, consequences for the rest of the European Union, as well as for Britain itself. Britain, whatever irritation it had at times prompted among its European partners, had been a leading trading partner over more than four decades, and an important contributor to the EU’s coffers. The European Union was, moreover, in far from good health, rocked by major crises since 2008 that had dented its self-confidence and stability.

The crucial need, in reluctantly acknowledging the British decision, was to reinforce the solidarity and unity of the European Union. There was to be no ‘punishment’ of Britain (as some sectors of the Europhobic British press claimed). But the interests of the EU as a whole would, it was plain, be upheld at all costs. The Union had to be strengthened, not weakened by Britain’s departure. Its future had to be consolidated in order to face crises – including that of its own existence – that went far beyond Brexit. As Britain, its negotiating team led by David Davis, and the European Union, whose chief negotiator, Michel Barnier, had long experience as an EU Commissioner and French minister, prepared to begin their complex work in the summer of 2017, a long period of uncertainty for both sides beckoned.

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Economic crisis, migration and terrorism were global, not specifically European, problems. The Ukrainian crisis had international repercussions. Even Brexit, as Britain attempted to reshape its global trading relationships, was far from simply a European, let alone just a British, concern. The collective crises over almost a decade had shaken – though not destroyed – the foundations of European civilization. By the summer of 2017 Europe had weathered the crises. They had been checked. But they had not been overcome. Nor could they have been. Since the crises were immanent to Europe’s exposure to globalization in all its manifestations, a process that had accelerated so sharply in the preceding three decades, there could be no neat or finite end to the threat they posed to Europe. Economic recovery remained far from robust, high levels of migration were inevitable, there was no patent solution to the acute problem of terrorism, and the potential for great-power conflict had been heightened since the election, in November 2016, of the impulsive, unpredictable Donald J. Trump as President of the United States. Europe’s exposure to global turbulence was certain to continue for many years, perhaps generations, to come.

Since 2008 much of what had been taken for granted in modern Europe had been called into question. The stability, prosperity, even the peace that had marked the attainments of decades, were no longer guaranteed. The bonds with the United States, so vital to Western Europe since the Second World War (and since 1990 to most of Eastern Europe, too), were loosening already under President Obama and were directly called into question under his successor. Liberal and democratic values, long fought for, were under challenge. Europe in 2017 was in a fragile state, facing lasting uncertainty and insecurity – greater than at any time since the aftermath of the war. Would it find paths to better times? Or were the ghosts of the past likely to return to haunt the continent?