By Stefano Sciandra
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If 2020 was about an unprecedented healthcare crisis, 2021 will overwhelmingly be about economic responses to COVID-19. In such troubled times, one would expect countries to come together and work towards restoring growth and safety. However, the world is far from it and it lacks its most important ally, the US. America, in fact, is divided as never before and the White House will soon welcome a new President, who is seen as illegitimate by roughly half of the population. So with a global leader like the US having to deal with both its own internal divisions and China, Europe is expected to act independently.
The first major issue is vaccines – Europe has been criticised for the slow vaccine rollout experienced so far. Israel, a country that accounts for 1/50 of the EU’s population, has managed to vaccinate more of its citizens than the 27 EU members combined. Politicians are pressing the European Commission to explain why it bought fewer jabs than expected and why it was so slow to approve the Pfizer/BioNTech vaccine, developed in Germany, that was approved in the US and the UK earlier than in the EU. Furthermore, the UK has managed to approve two additional vaccines, one developed by Moderna and the other by Oxford-AstraZeneca.
One of the major events that will happen in the EU is the German federal election, set to take place in September. The outcome of the election will have a huge impact on Germany’s role within the EU and its relations with the single-member States. Angela Merkel’s great political skills played a great role in securing a landmark €750 billion Recovery Fund and in keeping the 27 united. Given that the German chancellor is now focused on trying to ensure a great election outcome for her party, Germany has little time to dedicate to France.
Macron, as pointed out by the Eurasia Group’s risk analysis for 2021, will feel more isolated as the new German chancellor will probably seek a pan-European approach rather than focusing on the Franco-German axis. Furthermore, Margrethe Vestager, the EU’s competition and digital chief, has recently said in an interview that Britain’s departure from the Block will certainly have a negative impact on the aforementioned axis. Both Britain and the EU will have to adjust to a post-Brexit environment, hopefully not forgetting the hugely positive role that both sides had on their respective histories. The EU has to thank the UK for much of what it is today.
Italy, Europe’s fourth-largest economy, is once again engulfed by a political crisis, largely fuelled by the country’s dealing of the health crisis, its very slow and disorganised vaccine rollout, and last but not least, by questions and doubt on how to use the Recovery Fund. If the plan for recovery won’t get approved, the Italian PM Giuseppe Conte might find himself in trouble. Italian newspapers have been reporting on the possibility of a power shift from Conte to Mario Draghi, former Governor of Bank of Italy and former President of the European Central Bank (ECB).
Outside the EU, the Russian Federation will see its citizens elect 450 seats of the State Duma, the lower house of the Federal Assembly. Western analysts have described this election as a referendum of Putin’s dealing with the health crisis and its related economic impact. Covid-19 has had an acute impact on the already weak and dependent on raw materials Russian economy. With the world shifting towards a green economy, Russia must modernise its way of trading and doing business, as it won’t be able to take advantage of soaring oil prices to cope with the crisis.
Within a broader framework of local UK elections, Londoners will choose a new Mayor of London or will confirm Sadiq Khan for another mandate. Whichever the outcome, the new Mayor will control £17 billion (or more) to invest in infrastructure, arts, sports, and transport, to name a few. Both the COVID-19 crisis and Brexit will have an impact on London and the City of London, in terms of rental properties, office space, tourism, and education, so the new Mayor will have to focus on how to mitigate it and take advantage of the situation to bring about much-needed change.
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