Will faltering EU growth play a role in the European elections?

Economic growth is still weak and unevenly spread across the 28-nation European Union, while job creation is only just beginning to improve. Will Europe's lackluster economy have an impact on the upcoming elections?

Ahead of elections for the European Parliament this week, Europeans have much to worry about. There's a persistent threat by US President Donald Trump to impose punitive tariffs on EU countries, the ongoing trade dispute between Washington and Beijing, and a series of uncertainties accompanying Britain's exit from the 28-nation bloc.

Moreover, the EU's sovereign debt crisis of 2012 is still casting a long shadow, notably over the 19 states that share the euro. The cocktail of economic woes has held the EU economy down for the past six months, with the bloc's strongest economy, Germany, just avoiding slipping into recession.

With just a few days to go until the elections, the European statistics office, Eurostat, is seeing at least a haze of a silver lining in all the clouds, reporting an acceleration of economic activity. Growth in the first three months of the year came in at 0.5% for the EU, and 0.4% for Germany.

Infografik EU Wirtschaft Arbeitslosigkeit EN

Slowdown still expected for 2019

German Economy Minister Peter Altmaier has warned, however, that the improvement over the previous quarter is "no reason not to be alarmed" about the economy. The European Commission shares his view. The EU's executive wing released data earlier this month projecting weakening growth over the course of the year.

Similarly, the International Monetary Fund (IMF) and other global economic organizations have forecast a slowdown in Europe amid an expected cooling of the global economy. They argue that the European economy cannot shine when clouds are gathering all around the world. The Commission said, for example, that in the EU, and notably in the eurozone, the slowdown was even more pronounced because the region was "highly dependent on external demand."

Furthermore, sentiment is also being hit by a number of sector- and country-specific factors, the report said. "These include disruptions in the car manufacturing sector, social tensions, policy uncertainty, as well as uncertainty related to Brexit."

Small wonder that growth projections have been cut for almost all big economies across Europe. Germany's export-dependent economy with its large automobile industry is expected to grow only by 0.5% in 2019. Italy is also seen lower at a mere 0.1% due to its government's perceived erratic policies.

France — Europe's second-largest economy — is thought to be faring comparatively better, with projected growth of 1.3%, despite its "yellow vests" protests.

Infografik EU Wirtschaft BNP EN

Poland and Hungary of all

Surprisingly, Poland is seen outpacing all other EU economies with 4.2% growth projected. And this, ironically, against the backdrop of EU disciplinary measures imposed against Warsaw over alleged violations of the bloc's basic democratic principles.

Hungary — whose Prime Minister Victor Orban is also under EU pressure for similar reasons — is also expected to outgrow most EU countries with 3.7%, giving a strong economic tailwind to the populists' European election campaign.  

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Read more: Thousands take part in pro-Europe demonstrations ahead of elections

The Commission hopes robust domestic consumption on the back of rising wages and employment will aid the EU's economic prospects. Poland, Hungary and other eastern European states will also continue to benefit from subsidies from Brussels. 

However, while Germany, the Netherlands, Poland and Hungary, will all profit from their strong labor markets, job creation in the EU's southern periphery, notably in Greece, Italy and Spain, will remain precarious. Nevertheless, unemployment will continue to fall, to 7.7% in the euro area and 6.5% in the EU as a whole, including Britain.

Brussels hopes this downward trend will last into 2020, driving eurozone unemployment down to 7.3%, meaning it could fall "below its precrisis level."

Risks remaining after elections

The EU's executive wing, however, isn't turning complacent despite some minor improvements lately. In its recent report, it made abundantly clear that trade disputes, higher tariffs, slower global growth, and even a return of banking sector problems and debt woes are risks that won't go away.

Those downside risks could be made worse by more political uncertainty resulting from the European Parliament elections, the Commission said. "Unsustainable policies… could result in a pullback in private investment," it warned.

Europe is for Everyone: Proud Europeans rally head of EU vote

One Europe for Everyone

Under the nationwide motto "One Europe for Everyone," people in Berlin marched against nationalism on Sunday. Berlin, which will be the biggest city in the EU after Brexit, is home to large populations of foreign-born individuals. Many come from other EU members, primarily Poland, Italy, France, and Croatia.

Europe is for Everyone: Proud Europeans rally head of EU vote

Thousands in the streets

Some 3,000 participants had signed up for the Berlin march before it began Sunday morning. Germany elects 96 parliamentarians to send to the European Parliament, the most of any single country in the 751-seat body.

Europe is for Everyone: Proud Europeans rally head of EU vote

Frankfurt for Europe

Thousands also came out to support the European Union at the seat of the European Central Bank, Frankfurt. Different groups such as environmentalists, political parties, church organizations and women's rights activists took part in the march.

Europe is for Everyone: Proud Europeans rally head of EU vote

45,000 strong in Cologne

Organizers said some 45,000 participants had joined the One Europe for Everyone march in Cologne. Participants included prominent Social Democrat (SPD) politicians like party leader Andrea Nahles and German Justice Minister Katarina Barley.

Europe is for Everyone: Proud Europeans rally head of EU vote

Rescue Europe

"Rescue the European peace project," read several signs at the Cologne rally. Many Europeans are worried that nationalist parties like the far-right Alternative for Germany will use electoral success to promote an anti-Europe agenda like the one Brexit supporters spread in the UK.

Europe is for Everyone: Proud Europeans rally head of EU vote

'Strache, you neo-Nazi'

Thousands of demonstrators in Vienna marched for Europe the day after former-Vice Chancellor Heinz-Christian Strache, of the far-right Freedom Party of Austria (FPÖ) resigned in a corruption scandal. The FPÖ, founded by ex-Nazis in 1956, had been in Austria's ruling coalition since October 2017.

Europe is for Everyone: Proud Europeans rally head of EU vote

Austrians against racism

One of the main criticism against the coalition government of the FPÖ and the center-right Austrian People's Party (ÖVP) was a number of measures aimed at curbing non-European immigration. The government also cozied up to numerous far-right parties across Europe, including Fidesz in Hungary and the League in Italy.

Europe is for Everyone: Proud Europeans rally head of EU vote

Poland in Europe

Rallies also took place in other EU member states such as Italy, Spain, the Netherlands, and here in Warsaw. In Poland, where a right-wing nationalist party is in power, and is currently in a legal battle with the European Union over controversial judicial reforms.

Europe is for Everyone: Proud Europeans rally head of EU vote

From EU president to Polish president?

Current EU Council President Donald Tusk joined the march in his native Poland. A former Polish prime minister, Tusk will end his term as council president in December and is expected to run for the Polish presidency in 2020. Current polls have him and current President Andrzej Duda in a dead heat.