The year just passed ended with the most major crisis in the history of the Union and with the deliberate retreat into isolation of one of its members, the United Kingdom, which opposed changes to EU treaties needed for the reinforcement of discipline budgetary discipline.

For the first time in November 2011, political leaders and experts openly alluded to the possibility that a country might exit the Eurozone: Greece, whose bailout has swallowed up billions of euros, and virtually all of the EU’s energy. And that is not to mention the quarrels with Italy, which were fortunately resolved by a happy ending, with the departure of Silvio Berlusconi, who has been replaced as prime minister by the technician Mario Monti.

In the region occupied by our southern neighbours, Arab revolutions overturned dictatorial regimes without, at least for the present, delivering much in terms of more democracy in Libya, Egypt, and Tunisie. Although the predicted wave of refugees, which it was feared would swamp the EU, largely failed to materialise, immigration has remained an ongoing problem in a Europe that has very little to offer these emerging democracies.

Similarly, it is back to the drawing board for the association agreement between the EU and Ukraine, which was supposed to signed at December’s EU-Ukraine summit in Kiev, but has now been suspended following the imprisonment of former prime minister Yulia Tymoshenko. As for Belarus, the Union exerts hardly any influence on President Alexander Lukashenko, who regularly jails his political opponents.

Regarding these two countries, the Union and Poland, which is particularly attached to the goal of rapprochement with its Eastern neighbours, have clearly failed. Europe lacks the necessary vision to break the deadlock, while Russia, which is busy rebuilding its empire, is unwilling to waste time on such issues.

A large Schengen and a small Union

In the spring, the likelihood is that we will see a further extension of the Schengen Area. Just before Christmas, the Netherlands withdrew its veto on the enlargement of the visa-free zone to include Bulgaria and Romania. Both countries will be joining, but on condition that two forthcoming European Commission reports on their judicial systems and their reforms in the field of internal policy draw positive conclusions. Sofia and Bucharest, which have been members of the EU since 2007, will therefore have to make greater efforts.

As for the Eurozone, the currency bloc has now reached a point where it is oriented towards a tighter fiscal union, but although political leaders have consistently ruled out the possibility that Europe might break up, anything could happen.

Doubtless, the first months of the new year will be devoted to the quest to obtain money to feed the European Financial Stability Facility (EFSF) and negotiations on a new intergovernmental agreement. The working group responsible for drafting the terms of the fiscal pact includes representatives of both Poland (which remains outside the euro, but wants to participate) and the United Kingdom (which boycotted the accord). The vision of all of these people sitting down at the same table is one to inspire optimism.

There is also good news from Croatia, which, on 22 January, is organising a referendum on its accession to the Union. In spite of ongoing concerns about the economic situation, a majority of Croats will vote yes to Europe and, in July 2013, Croatia will become the 28th country to join the EU. So we can count on the Union gaining a new member from the Balkans (the center of a political blackhole that continues to haunt Europe).

How much do we stand to pocket?

The fight to benefit from the Cohesion Fund will be played out inthe course of budgetary negotiations, which, in the wake of a warm-up period under the Polish EU Presidency, are now about to begin. It may happen that as early as the beginning of the year, net contributors to the community budget, namely the United Kingdom, Germany, France, Sweden, Finland, the Netherlands and perhaps other member states, will demand substantial reductions in the amount they have to pay.

Given this context, we should be thankful that budgetary negotiations will be in the hands of the Danes, who took over the EU Presidency in January. The first half of 2012 will be the seventh Danish Presidency, and it follows on from a previous mandate in 2002, during which the Danes finalised accession negotiations between the EU and ten Central and Eastern European countries. The country has no lack of good will or experience, and as an added bonus, it benefits from a well-recognised Scandinavian pragmatism in its approach to politics.

Unfortunately, Danish pragmatism may come a cropper on France’s approach to budgetary negotiation: especially in the context of French presidential elections in April and May, in which Nicolas Sarkozy will be eager to convince his increasingly eurosceptic compatriots that he is doing his utmost to defend French interests in the EU.

What can we expect to happen?

We are likely to encounter a lot of events that cannot be foreseen today; just as at the end of 2010, no one in the wildest dreams would have predicted that, in August 2011, hordes of British citizens would spend several days looting shops in London.

As it stands, increasing social tension and the frustration of the young generation now poses the greatest threat to the internal stability of Europe. And this combined with the growth of political populism that is now evident in countries as diverse as France, the Netherlands, Finland and Hungary creates an explosive political mixture of social frustration and political cynicism, which is also nourished by the weakness of Europe.