The year of the vampire: 2017 is when political risk bites back

“I have never met a vampire personally, but I don’t know what might happen tomorrow.”

–Bela Lugosi

Perhaps the greatest single indicator that the West no longer rules the world is its constituent nations’ signal inability to solve any of their many festering crises. Gormless, wildly overrated Chancellor Angela Merkel epitomises this trend more than anyone else. She has made ineffectual policy failure into a sort of performance art, astoundingly convincing many that ‘managing crises’ is an acceptable substitute for solving them.

But of course it is not; it is merely a novel marketing tool for putting off the inconvenient truth that the West’s crises are structural, endemic, and are in the process of going septic. For the hard rule of history is that either you master crises, or they master you. 2017 will be the year of the vampire, when the myriad unsolved policy challenges confronting the West bite back, in their undead fashion.

The refugee crisis will rise to threaten Europe’s political order. While the hell of Aleppo is ending, the refugee crisis caused by the Syrian civil war is not. The EU’s patchwork immigration deal with Erdogan’s Turkey is coming apart at the seams.

The erratic Turkish President is furious the EU has failed to honour its promise of visas for Turkish citizens to travel in Europe in exchange for Turkey serving as the continent’s night watchmen, keeping the refugees from its shores. Erdogan’s post-failed coup crackdown has made honouring this pledge practically impossible. By the spring, if Erdogan fails to receive German satisfaction over the deal, look for him to open the gates, and the refugee crisis to reappear, seemingly from nowhere. The fundamental east-west divisions within the EU over this issue will bring it to the brink of collapse.

Europe itself is living on borrowed time. While the establishment will (just) survive elections in France, Italy, and Germany this coming year, this amounts to the last roll of the dice for the continent’s elite to find a source of significant growth to save themselves.

Centre-right candidate Francois Fillon will win the French presidency over the populist rightist Marine Le Pen and her Front National (FN) Party. But vampire-like—lurking just beneath the surface—the 2017 presidential election amounts to a triumph for her. Le Pen will roughly double the vote her father received in the second round of the 2002 presidential election, with the FN candidate receiving upwards of an alarming 30% of the total. If Fillon fails to fundamentally reform reactionary France, it is entirely likely that Le Pen wins the presidency the next time around.

Likewise, Chancellor Merkel will win the joyless autumn German parliamentary elections, proving once again that the tallest pygmy in the village is still considered a giant.

But the chickens are coming home to roost even here, in the form of further terror attacks that will be laid at the door of Merkel’s open immigration policy, sluggish domestic growth of under two percent (probably about the baseline target needed to be reached to hold European populism politically at bay), and the fact that the crises all around it will call for decisive German action which Merkel seems constitutionally incapable of providing. A few more years of this drifting and it will be risk on in Germany as well.

In Italy it is probable that Beppe Grillo’s insurgent populist Five Star Movement will actually win the most seats in Italy’s upcoming parliamentary elections, though it could well fall short of an overall majority. New voting rules will likely weaken the power of any sitting administration, meaning Five Star will either govern in a chaotic, weak manner, or be excluded by the other parties from forming a government in the first place. If it is the former look for its challenge to the European order to fade. However, if it is the latter, Five Star is just one ineffective Italian government away from a referendum on the euro.

The Iran nuclear crisis will rear its ugly head as well. In a very changed Washington, the strong anti-Iranian orientation of the new Trump administration—the President himself, National Security Adviser Michael Flynn and even stable Secretary of Defence James Mattis—will cause the seemingly settled Iran nuclear crisis to come back from the dead. Either the deal will be unilaterally abrogated outright, or the administration will harry Iran over every point of its implementation, hoping Tehran walks away in a fury. In either case, the flare-up will precipitate a transatlantic crisis as a hard-pressed Europe will see no reason to follow the despised Trump over the abyss.

Finally, the gormless Trump administration will unwittingly trigger a trade war with China, which could well precipitate the world’s next economic crisis. The year of the vampire is here with a vengeance.

Published in City AM London, Janaury 3, 2017.