2018 annual forecast

Europe

To the west of Eurasia lays Europe, a region predisposed to division. It is surrounded on nearly all sides by islands and peninsulas that make it difficult for Europe to cohere. The northern half of the continent, moreover, sits on a plain whose short, meandering rivers tend to empower countries without forcing them to work with others. The southern half is situated on more mountainous terrain that has historically impeded the creation of strong, unified economies. As a result, Europe is a continent riven by pockets of distinct cultures whose differences are all too often irreconcilable.

Dec 22, 2017 | 20:17 GMT
Europe is a continent riven by pockets of distinct cultures whose differences are all too often irreconcilable.

Europe is a continent riven by pockets of distinct cultures whose differences are all too often irreconcilable.

(canadastock/Shutterstock.com)
section Highlights
  • The debate over how best to reform the European Union will take the spotlight in 2018, laying bare the regional rifts that divide the Continent.
  • Though France and Germany will be at the heart of this debate, they will prove more willing to cooperate than to confront each other. To that end, Paris will agree to water down or postpone many of its proposals for the bloc.
  • General elections in Italy will generate uncertainty about the eurozone's future. Though the country won't leave the currency area in the coming year, its next government will lobby for the authorization to boost public spending.
  • The United Kingdom will spend 2018 negotiating the terms of a trade agreement with the European Union. Though leaders probably will reach an arrangement for the transition period following the Brexit, a trade deal will be tougher to obtain.
  • The Continental bloc also will seek out free trade agreements with other countries, a strategy that will become a cornerstone of the bloc's foreign policy.
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