Elections, rising nationalism and banking crisis could spark ‘cataclysmic’ break-up of the EU next year

IF you thought 2016 was eventful, wait until you see what 2017 has in store.

The next 12 months are set to be critical for the European Union which is facing a series of major events, from referendums to general elections across its core members.

It comes amid a backdrop of rising nationalism and populist politics, fuelled by the migrant crisis, terrorism and years of austerity measures that have left people across the continent fed up with the status quo. The recent election of Donald Trump and UK’s Brexit vote have put European leaders on notice — all bets are off.

“Since the November 9, times have changed,” said German ING economist Carsten Brzeski in reference to the US election. “You can walk through all these political events one by one … I think each has the potential to derail the eurozone, to further disintegrate the eurozone, to maybe possibly even lead to a breakup of the eurozone — but only in the worst, worst-case scenario.”

Starting on Monday, here’s what’s coming up in what could be Europe’s most dangerous year yet.

Italy

On December 4, Italians will vote in a referendum on constitutional reform proposed by Prime Minister Matteo Renzi. He wants to cut the number of people in the upper house from 315 to 100 and limit their powers to allow laws to be pushed through more quickly, and has staked his political future on winning.

But polls predict a ‘no’ vote from the Italian people, fuelled in part by a campaign from the ascendant Five Star Movement — a populist party led by an activist and comedian that has promised a referendum on Italian membership of the euro currency.

To add fuel to the fire, Italy is on the verge of a banking crisis that is making investors and markets extremely nervous. The risk is that if the referendum result is no, the PM will resign, leading to either a caretaker government or elections that could see the Five Star Movement sweep to power and hold a referendum on the euro.

The big ‘but’ is that a lot of steps are required for all that to happen. At present, it’s “wait and see”.

Austria

On the same day as Italians vote, Austrians will take to the polls in a rerun of their Presidential elections first held in May. It’s the third attempt to sort out an absolute hot mess that saw the first count disqualified because of irregularities and the second because of faulty glue on envelopes.

The contest is between Greens-backed Alexander Van der Bellen and the Freedom Party’s Norbert Hofer, who would become the first far-right leader Europe has had since 1945 if he wins. Polls are too close to call and he lost by just 31,000 in May.

The vote has whipped up divisions and accusations of gun-carrying Mr Hofer being a “wolf in sheep’s clothing”. He has been spotted wearing a cornflower which is an old Nazi symbol that inspired Hitler’s thinking about “greater Germany”, The Telegraph reports.

The Netherlands

The Dutch will also hold a general election on March 15, with Geert Wilders’ far-right Freedom Party leading polls. He is vehemently anti-immigrant and has been quick to align himself with Nigel Farage and Donald Trump.

He wants to ban headscarves completely and said the Dutch should not have to pay because of the “stupidity” of Angela Merkel, by opening Germany’s doors to Syrian refugees.

Britain

The UK is due to trigger Article 50 by the end of March 2017, provided the Supreme Court doesn’t block plans next week. This would see Britain leave by the end of March 2019 ahead of its own election in 2020.

If all goes according to the government plan, that would see UK politics for the next two years dominated by negotiation over the exit deal. European nations are determined to detract others from leaving.

France

France is the country many see as the most susceptible to triggering a break up, if Front Nationale leader Marine Le Pen wins the Presidential elections to be held on April 23 with a run off in May if no winner is found.

She has called for a “Frexit” and wants complete control over legislation, economy, money and borders. One EU diplomat told the Guardian a win for her would be “cataclysmic, existential, the end.”

But to win, she first has to get through the first round of elections and then take on the Republican’s Francois Fillion. The far-right leader was the surprise winner of the Republican primary and has promised to change France’s “software” and scrap its famed 35 hour working week.

Germany

September will see another round of elections for Europe’s most powerful economy, where reigning chancellor Angela Merkel has announced she would run for a fourth term.

It comes as the right-wing Alternative für Deutschland, led by Frauke Petry, is gaining ground and the far-right is on the rise.

The UK in a Changing Europe director Anand Menon said while Europe might not have the “perfect storm” of factors seen in the US and UK, the one exception is the French elections with could be disastrous for European project.

“If Marine le Pen wins in France next year, then the very fabric of the EU will be called into question,” he said. Otherwise, Europe is not so much in for a “Trump moment” but a series of decisions that leaders misread at their peril.

“I don’t think necessarily we’re going to get a Trump moment in the sense of a populist candidate seizing the actual reigns of power but that should not blind us the fact that there is a massive dissatisfaction simmering with mainstream politics,” he said.

“For some people it’s actually a cost of living crisis. For others it’s an identity crisis, it’s the fusion of those two that has fuelled the far-right.

“The cynical views is that our leaders have ignored warning for almost a decade. It’s been bubbling away for a long time …. The warning signs have been there …. We’ve chosen to overlook those warning signs.

AMP chief economist Shane Oliver said while the breakup of the eurozone “has the potential to be a more traumatic event” than Brexit or Trump, “a lot of water would have to pass under the bridge” for that to happen.