Merkel Leaves Europe to Its Own Devices as Show Must Go On

(Bloomberg) -- A European Union summit on Friday will be notable for one thing: the bloc’s most powerful leader in a generation won’t be there.

Angela Merkel, the German chancellor, still in charge of her country but bruised after an election that saw her party’s share of the vote plummet to its lowest level since 1949, is busy at home trying to stitch together a coalition government. 

“Of course I would have wanted her to be here but I fully respect the situation that she’s in negotiating a new government for Germany,” Swedish Prime Minister Stefan Lofven said on his way into the meeting.

For the EU’s other leaders, the meeting in Gothenburg, Sweden, may offer a taste -- at least this time -- of a Europe no longer anchored by its dominant, longest-serving leader.

“By definition, any German chancellor will play a central role,” said Carsten Nickel, managing director of Brussels-based Teneo Intelligence, a political risk consultancy. “But we’re going back into a situation where there’s more coordination among multiple players in Europe than there was in the darkest days of the crisis.”

Europe’s leaders are optimistic they’ve put their biggest crises behind them: The euro area is growing again after years in the doldrums; the influx of migrants from the world’s trouble spots has slowed and nationalist politicians haven’t hit the heights in some countries that were once feared. Even Brexit may be more of a storm in a British teacup than a trigger for disruption across the continent.

It means the EU can take a breath and use the time to make itself more resilient to future shocks. Friday’s gathering won’t result in any significant decisions but instead will focus minds on addressing inequalities and spillovers from the economic crisis, such as persistent unemployment and high private debt. The discussion will focus on improving access to labor markets, making working conditions fairer and offering stronger social safety nets.

‘Social Crisis’

“Europe is slowly turning the page on years of economic crisis but it has not yet surmounted the biggest social crisis it has known for generations,’’ European Commission President Jean-Claude Juncker said on Thursday.

Leaders are aware that the respite might not last long. Merkel’s trouble at home owes much to votes lost to the anti-immigration Alternative for Germany party. In Italy, nationalist parties, including the anti-immigrant Northern League, are polling well ahead of a general election due early next year. Even among the attendees on Friday, several from the former Soviet bloc are turning their backs on the European mainstream as Russia’s belligerence grows.

On the edges of the summit, leaders won’t be able to avoid more immediate concerns completely. U.K. Prime Minister Theresa May is using the opportunity to lobby the prime ministers of Sweden and Ireland and EU President Donald Tusk, with four weeks to go before a summit in Brussels where leaders are due to decide whether deadlocked Brexit talks can advance to a discussion over future trade relations.

European Identity

EU leaders plan to endorse a push for a Europe that’s socially fairer and more equal. Along with the European Commission and the European Parliament, they’ll sign the so-called Pillar of Social Rights, a set of 20 principles focusing on social and labor-market conditions. Over lunch, leaders will discuss how education and cultural policy can help forge a European identity that may help counter nationalism.

It’s “not a bad time to stress that Europe too has a multifaceted and extremely rich identity,” Peter Ludlow, a Brussels-based historian and chairman of the EuroComment research firm, said in a note. “Questions of identity are at the heart of the current political debate about the EU and its future.”

--With assistance from Tim Ross

To contact the reporters on this story: Ian Wishart in Brussels at iwishart@bloomberg.net, Viktoria Dendrinou in Brussels at vdendrinou@bloomberg.net.

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Richard Bravo

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