2018 will be a key year for EU reform

Outlook

The United Kingdom’s decision to leave the EU and the electoral victory of French President Emmanuel Macron have given fresh momentum to EU reform. The June 2019 European Parliament elections -- after which a new Commission will be nominated -- add a sense of urgency as this year will be the last chance for the current Commission to initiate reforms.

Much will depend on the new German government, but the parties likely to renew the grand coalition have voiced support for some of Macron’s proposals and pledged to cooperate closely with Paris.

Impacts

• The upcoming debates on the 2021-27 budget could lead to tensions between Western and Eastern Europe.
• Different priorities in the Brexit negotiations could threaten EU unity later this year.
• Brussels will be reluctant to propose reforms requiring treaty change as populations in some countries might demand referenda