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Europe's appeal is fading and Brexit chaos is not helping

A small country such as Iceland might not be the most influential nation economically, but some see it as a bellwether of what many inside and outside Europe think of the EU.

With Brexit in its final throes, the European Union is about to get one member smaller. Potential new member countries will not likely replace the UK any time soon in an EU fraught with a range of challenges. Today's increasingly fractious world seems to portend the twilight of grand coalitions.
A small country such as Iceland might not be the most influential nation economically, but some see it as a bellwether of what many inside and outside Europe think of the EU. After nearly a year in power, its young leader says Iceland now has no intention of joining the bloc. "I don't think we should enter the EU right now. I don't think there's any reason to apply," Iceland's Prime Minister Katrin Jakobsdottir said. "Personally, I'm critical towards the economic policies of the EU - the creation of the Eurozone without any real centralised policies on taxes or fiscal policies. The European Central Bank has become really powerful without being very democratic," she added. "The economic policies of the EU have been really distant from people in the Eurozone and they've created divisions that needn't be there."
Iceland began the process of joining the EU in 2009, but dropped its application in 2015. And it isn't the only nation that has growing reservations. Other smaller European nations, even those who've joined the EU, are discovering that EU membership does not necessarily secure a better future.
Croatia partied in the streets when it gained EU membership in 2013, but the celebration did not last long. The country remained mired in recession until 2015 and today is struggling with reforms that EU says it must make. According to the World Bank, Croatia could face "prolonged economic stagnation and a further worsening of social conditions".
Opposition political leader Ivan Vilibor Sincic, head of Croatia's Zivi Zid party, says the country should pull out. "We have never seen Europe as a community that will help us when we need help and whom we will help when they need help, but we have seen it as a group of alienated bureaucrats where corporations and banks wield strong influence and where there is very little democracy," he says.
Poland and Hungary are two more EU members in the east that have voiced disappointment - and the feeling is certainly mutual. This year the European Council of Foreign Relations queried member nations about which country in the bloc disappointed them most. The response was clear: other than soon-to-be-gone Britain, Hungary and Poland failed to meet expectations more than any others in the EU. For their part, Hungary and Poland were also disappointed - with Germany and to a greater degree with France.
Albania, Serbia, Macedonia, Montenegro and Kosovo are in the process of potentially gaining full EU membership by 2025, but their ascension is contingent upon reforms across a range of issues.
Even one of the most pro-EU figures in the Balkans, Nikola Dimitrov, Macedonian foreign minister, is showing signs of frustration. "We have been locked in the waiting room for some time, but we are now (at least) running after a train, even if we are not quite sure in what direction," said Dimitrov.
Potential new members are still on the sidelines, but they are keenly aware of trouble brewing between the union's biggest players. Italy, a EU founding member and its third-largest economy, is currently in a battle with Brussels over its budget, which the EU says violates debt rules. Neither side is backing down in a faceoff that has markets and politicians on edge as they wonder who will blink first.
Even staid and stable Germany now poses a question. Respected Chancellor Angela Merkel has announced she will not seek re-election as the country takes a turn to the right. France is regarded as tone deaf to the displeasure among many citizens across Europe, with French President Emmanuel Macron looking increasingly imperious and isolated in his pronouncements for an ever-grander EU.
Financier George Soros, who has built his $8 billion fortune in currency markets, writes that the Eurozone has an original sin that condemns it to failure. In his book ominously titled The Tragedy of the European Union, Soros says the single currency created a financial system dominated by Germany, which benefits in the short term and refuses to change, blocking significant banking reform.
According to Andrew Moravcsik, a commentator at Foreign Affairs magazine, the fundamental system "guarantees a long period of stagnation for southern European countries, which now find themselves in a position similar to that of developing countries that borrow in a foreign currency".
"Soros sees this as a 'nightmare' from which Europe might never wake," he says. For now, potential new EU members appear willing to bide their time in the "waiting room" as they hope for a better future. Mostly former communist states, they are keen to rise on the development scale and benefit from greater prosperity.
And for little Iceland?
"When we look at our economy, our social structure and our policymaking, I think we've done pretty well without being members of the EU," said Iceland's Prime Minister Jakobsdottir.
Jon Van Housen and Mariella Radaelli are editors at www.luminosityitalia.com news agency in Milan