Today, Donald Trump will be inaugurated as 45th President of the US. One of the most divisive and polarised inaugurations in US history marks just the beginning of an unpredictable administration. The first year of Donald Trump’s presidency will be shaped by his handling of the traumatic events of 2016 – these are the ‘known unknowns’. But anniversaries that fall in 2017 – such as the centenary of the Russian revolution – demonstrate the kind of ‘unknown unknowns’ that turn history on its head.
Europe faces one of its most tumultuous periods since the second world war. What was a ‘union’ is now a divided and dysfunctional set of arrangements, wracked by internal contradictions and policy failures. Economic and monetary union is heading for an uncertain future, possibly collapse.
By the end of March the UK will trigger Article 50 of the Treaty of Lisbon, initiating the negotiating process that will almost certainly lead to a ‘hard Brexit’ from the European Union. Like Trump’s election, the initial period following the June referendum has confounded critics’ doom-laden economic forecasts. Trump’s statements on an early trade deal with the UK will give resolve to Prime Minister Theresa May’s team as they engage in initial skirmishes of the Article 50 negotiations. But even as voters across Europe have signalled ‘enough’, the EU remains emphatically committed to ‘economic, financial, fiscal and political union’.
At least as important in 2017 will be whether or not Europe remains antagonistic towards Russia. It is strange that Trump can reach out to Russia’s President Vladimir Putin while European leaders prefer to shelter behind stale stereotypes.
Even as the EU stumbles from crisis to crisis, there is a historic opportunity to forge a new pan-European relationship with Russia – one that halts a new Cold War and builds a robust coalition against Islamic fundamentalism. This could provide enormous economic benefits as well as opportunities for future generations to build on, more wisely perhaps than previous generations have. Russia has transformed: so should Europe.
The comparison cannot be pushed too far, but the reality is that the European elite with whom Trump will engage are out of touch and in denial; just as the elite of pre-revolutionary Russia were out of touch and in denial of the extent and impact of their policy failures.
There is a great deal that Trump can do to mitigate political tensions in Europe. This would give his new administration time to effect changes in the domestic economy, conserving strength for the ‘unknown unknowns’ that his presidency will face.
Chess-playing Putin understands that the game sometimes requires sacrifices. He will make political sacrifices to protect what he has rebuilt from the collapse of the Soviet Union.
European-Russian co-operation can protect both parties from the contagion of Islamic fundamentalism. This would serve US and global geopolitical stability. It is clear that Trump understands this reality.
Europe is hostage to the consequences of misconceived military interventions in the Middle East and the atrocities of repressive regimes, whose leaders it once feted and armed. What the great Irish poet WB Yeats prophetically sensed as the ‘blood-dimmed tide’ of destruction – in Syria, Iraq and Libya – has swamped the periphery of Europe and surged into its heartland.
In 2017 the failure of European leadership will be held to account by the voters of Germany, France, the Netherlands and perhaps Italy. In Germany, voters have already forced Merkel to reverse some signature policies. What the establishment once dismissed as populism may well be vindicated in 2017. Europe’s elites need an open minds to navigate the tides of change.
Ray Kinsella was formerly Professor of Banking and Finance at the Michael Smurfit Graduate School of Business, and is a member of OMFIF.