13 Major Events in 2022 That Could Change Europe’s Economy in the World

Another year, another try. Once again, we try to forecast the events most likely to induce crucial changes for the world (economy) in 2022. However, our approach is a bit different this year: first, we focus more on Europe. We won’t look at European events only, but we will pay special attention to those events that will greatly influence Europe’s position in world affairs.

Second, we raised the stakes (again): We started with 11 events in 2020, had 12 in 2021, and are now at 13. There will be a lot going on in 2022 (okay, 2021 has not been particularly calm, either) – check out our predictions and feel free to (dis-)agree!

January: As the RCEP, a mega-regional trade deal in the Asia-Pacific, enters into force, we renew our wake-up call

After eight years of lengthy negotiations, the Regional Comprehensive Economic Partnership (RCEP) was concluded on November 15, 2020, and entered into force on January 1^, 2022. This megaregional trade agreement brings together all 10 members of the Association of Southeast Asian Nations (ASEAN) plus China, Japan, South Korea, Australia, and New Zealand under one roof.

Unfortunately, India left the initiative in 2019 and never came back. We’ve already called the RCEP a “Wake-up call for the West,” and we renew this call now, especially to the European Union! The RCEP is rooted in the prospect growth region of the world. So the EU should hurry to test the waters for a possible EU-RCEP alignment. Form and conditions to be negotiated.

February: Olympic Winter Games – Zero-Covid policy is not Beijing’s sole problem

It all could have been just as beautiful as with the Olympic Summer Games in 2008. The world was awed by the new benevolent superpower, and even the sky in Beijing was unbelievably blue. Nothing will be the same when the Winter Games take place from February 4-20, 2022.

Not only are the skies never blue in Beijing in winter, China’s relations with important partners like the U.S. and EU have also reached one low point after the other in recent years. The challenges kept coming from fears of subsidized Chinese high-tech acquisitions to trade disputes and a nearly full-fledged trade war to mutual sanctions and economic coercion to achieve policy goals.

On top of that came the Coronavirus pandemic. While the West, by and large, decided to live with the virus, China stuck and continues to adhere to its zero-Covid policy – bad conditions for a major sports event that brings together thousands of people from different countries, even without spectators. Containing the virus appears nearly impossible. Just ask Japan.

However, this is not Beijing‘s only problem: the United States, Canada, Australia, and the United Kingdom have already decided to diplomatically boycott the Games due to China’s poor human rights record. Other countries have started to at least discuss this option. Instead of restoring at least partially China’s strained international relationships, the Winter Games could turn out to be yet another low point – and at a time when China wants “face” so much!

March: The French EU presidency and the European spring Council meeting – strong impetus or lame-duck?

France has taken over the presidency of the Council of the EU on January 1 (the presidency rotates among the EU member states every six months). During this period, France will chair most Council meetings and represent the Council with other EU institutions and at the international level. Traditionally, the presidency drives forward the ongoing work on European legislation but also sets some of their own agenda topics.

So we could have put this “event” to the beginning of the year as well. However, we went for March, as the summit of the EU heads of states and governments takes place on March 24-25 and marks the halfway point for the French presidency. Will France push for broad European reforms at the summit, for instance, in the area of economic and fiscal policy, EU decision-making, or EU climate policy? Or will the French government be preoccupied with the upcoming domestic elections in April (see next) and let the chance for common European action slip away? This summit will be a crucial reference point for taking stock of how ambitious the French EU presidency will be.

April: French presidential election – will Macron stay in office?

France will hold presidential elections on April 10. If no candidate receives an absolute majority of votes in the first round, a second round is scheduled for April 24. The current president Emmanuel Macron came into office in 2017 on a decidedly pro-European ticket and defied traditional French party lines.

His challengers include a number of candidates from both the left and the right, including far-right candidate Marine Le Pen. Will Macron stay in office? And will he (or his successor) continue France’s pro-European stance that has been marked by an emphasis on more European sovereignty and support for Europe’s Green New Deal?

May (or spring): Digital Markets Act and Digital Services Act on the home stretch

The first half of 2022 is likely to see decisive progress on two major legislative proposals of the Commission’s digital agenda, particularly as the French presidency is ambitious to pull them through during its term.

The Digital Markets Act (DMA) aims to rein in the market power of the largest digital tech giants in an attempt to establish a more competitive environment for smaller-scale innovators and businesses to thrive and to ensure that consumers can benefit from enhanced freedom of choice. Specific obligations will be put in place for particularly dominant digital platforms. These designated “gatekeepers” will be required to mitigate them applying unfair market practices and so-called “dark patterns” – such as deceptive user interfaces and misleading terms and conditions.

The Digital Services Act (DSA) strives to tackle the spread of disinformation and illegal content, which have been getting increasingly out of hand under given legislative circumstances. The problem of disinformation has revealed itself as a systemic threat to societies’ wellbeing and has proven to be an arduous task for authorities to track and combat the spread of harmful and illegal digital content. The DSA will seek to overcome existing legislative gaps to provide a safer digital environment and put a dent in dangerous disinformation practices. Although it might take until the beginning of 2023 until both initiatives enter into force, Spring of 2022 could mark the decisive breakthrough in the negotiations up to finalization. Both acts a crucial cornerstones of the EU’s ambition to become a strong digital power and a global rulesetter.

June: G7 summit as the starting point of a global climate club? Yes, please!!

Germany will hold the presidency of the “Group of 7” (G7) in 2022 and can thus decide on the topics to be discussed at the summit in June 2022 – as in 2015 – at Schloss Elmau.

The German government’s coalition agreement promises that the German presidency will be used to advance international cooperation in climate policy. The aim is to establish an international climate club open to all countries and a global emissions trading system that will lead to a uniform global CO2 price in the medium term. Unfortunately, the coalition agreement does not tell us what period the expression “medium-term” covers.

Should Germany actually succeed in initiating the first steps towards a global climate club, this would be a milestone on the road to worldwide climate neutrality – and as Germany is one of the most important EU member states when it comes to the battle against climate change this would also be of major importance for Europe. However, it is questionable whether this will succeed – unfortunately, too many national egoisms block the rocky road to climate neutrality.

July-September: Another summer of climate change?!

Another scorching summer is expected for 2022 across the Mediterranean in the southern neighborhood of the EU: Summer 2021 already saw almost 50°C heat in Tunisia and Syria, wildfires even in Morocco and Lebanon, torrents of rain in Algeria and Jordan, low water in the Tigris in Iraq and Nile in Egypt – North Africa and the Middle East are a climate change hotspot. Experts predict a more than two °C warming by 2050 for North Africa and even a more than 3 °C warming in the Gulf region.

The effects of climate change are hitting  EU neighbors in North Africa and the Middle East particularly hard. Algeria, Libya, Iran, and Saudi Arabia derive more than 90% of their income from exporting oil and natural gas. To reduce CO2 emissions, they will be forced to reduce their use of fossil fuels and diversify their economies – a challenging threat for Middle East economies.

Furthermore, heating effects reinforce social and economic structural problems in low- and middle-income countries like Morocco and Egypt. Geopolitical rivalries like that between Algeria and Morocco and the one between Iran and Saudi-Arabia complicate the search for solutions to political conflict.

The EU is not sufficiently prepared for these new patterns of conflict. At the same time, European expertise is needed to support the neighbors in the green and digital transition and diversify their business portfolios.

October I: 20th National Party Congress of the Chinese Communist Party – Will Xi become the unrestricted ruler of China?

When we wrote on the last Party Congress in 2017 under the title Welcome to Xi’s new era, we could not imagine just how new (or old?!) this new era would be. In the last four years, Mr. Xi has amassed an alarming amount of power and built a cult around his person not seen since the days of Mao Zedong.

The road towards a potential lifetime presidency appears to be clear. But there are some challenges ahead: First, even though China’s party-state seems to be a huge, centralistic monolith from the outside, it is not. Not every cadre in the CCP likes the idea of a Mao 2.0. And even though it has become even more difficult than before to grasp China’s internal policy debates, we can be sure they are there.

Second, COVID-19 is far from over. China has hailed its zero-COVID policy as superior to that of western democracies. It is therefore damned to deliver. But will it (remember the Olympic Games of February…)?

Third and closely linked is increasing the welfare and wellbeing of the Chinese population, which has legitimized the CCP in the absence of others. 2022 will be crucial to the recovery of the Chinese economy from the virus crisis. Any major outbreak or policy disruption could jeopardize this. To sum up, Xi’s remaining in power seems a matter-of-course right now, but it is not set in stone.

October II: G20 Summit in Indonesia – Bolder at Bali?

In October, the 17th G20 Heads of State and Government Summit takes place in Bali, Indonesia, under the theme “Recover Together, Recover Stronger.” The Indonesian G20 Presidency has announced that it will focus on three main pillars: Global health architecture, sustainable energy transition, and digital transformation.

The Bali Summit will be the pinnacle of the G20 process, focusing on promoting a resilient, stable, sustainable, and inclusive global economy. The question is how these ambitious goals can be translated into concrete and actionable policies.

The 2021 G-20 Summit in Rome was widely criticized for lacking ambition and vision in addressing key global challenges, particularly concerning climate change. Will government representatives be bolder at Bali? And what role is Europe going to play in the G20?

October III: 25^th World Energy Congress in St. Petersburg – Winners and losers of the energy transition?

Traditional energy superpower Russia would be delighted to find the next World Energy Congress it hosts on a list of “major events that could change Europe’s Economy in the World.” But with the international climate talks picking up again and critical transition efforts to sustainable energy, the 25th edition might turn into a milestone of an unexpected kind.

When world leaders stage the future of energy, this year marking the centenary of the World Energy Council, it will be the second meeting after the EU in 2018 has set itself the goal of becoming a climate-resilient society by 2050. Government ministers and CEOs of major energy companies will not only have insights to exchange – but above all, challenges to identify.

The host Russia is not among the natural winners of the energy transition. But that also depends on how quickly Moscow sets the course, how well it uses existing potential and cooperates. One good outcome of the Congress could be a constructive climate dialogue between Russia and Europe.

November: COP27 as a booster for global climate protection?

From November 7 to 18, the 27th session of the Conference of the Parties (COP 27) to the U.N. Climate Change Conference will take place in Sharm El-Sheikh, Egypt. The Glasgow 2021 climate summit was a summit with light and shadow. One positive aspect was the call for a coal phase-out. In addition, the U.S. and China had surprisingly declared that they wanted to set up a joint working group with the aim of accelerating the transformation to a climate-neutral global economy.

However, there are also less pleasing aspects: The resolutions were only voluntary commitments that are not legally binding. And: China and India weakened the demand for a global coal phase-out in the final document.

Therefore, the decisive factor is whether the commitments made in Glasgow are actually implemented. Our hope is that the pressure exerted by the people on their individual governments will be so strong that the declarations of 2021 will be followed by corresponding action. Then more far-reaching agreements could be reached in Sharm El-Sheikh – that will be absolutely necessary for limiting global heating.

November II: U.S. midterm elections: Can Biden defy history?

The midterm elections in November will be a pivotal moment for the Biden administration, for U.S. politics and for transatlantic relations. If Republicans win just one of the two chambers of Congress – the House of Representatives or the Senate – they will gain a veto power that allows them to block the government’s legislative procedures.

The chances of this happening are high. There is a distinct pattern in American politics according to which the ruling party loses voters in the first midterm elections after capturing the White House. Against this backdrop and given Biden’s (currently) low approval ratings, it seems likely that his administration will face a similar gridlock for the rest of its term as its predecessors did.

This would have significant implications not only for Biden’s legislative agenda but also for transatlantic relations and the global economy. Can Biden defy history and defend his narrow majority in Congress against all odds?

December: The FIFA World Cup – A tightrope act for Europe

The final round of the 22nd FIFA World Cup for men’s national soccer teams is to be held in the Gulf state of Qatar from November 21 to December 18. For the first time, 48 men’s national soccer teams will participate; and for the first time, FIFA World Cup matches will be held in winter instead of summer – due to the high temperatures that prevail in the Gulf region in summer.

The wealthy Gulf state has invested nearly €50 billion in stadiums and infrastructure to stage the soccer event – with many European companies profiting from the contracts. At the same time, international attention has been focused on the working conditions of foreign workers, which do not follow international standards. Criticism has been voiced due to speculation about corruption in the awarding of the World Cup to Qatar. Calls for a boycott have been voiced again and again.

By hosting international sporting events such as the Formula 1 races, the small Gulf states, along with Qatar, the United Arab Emirates, and Bahrain, are trying to become internationally known and respected. These rich countries are important customers for European products and services. At the same time, the Gulf states want more European security engagement facing the Iranian threat. In return, Europeans demand human rights and the rule of law. How does the EU walk this tightrope?

A critical year for Europe

Summing up, 2022 will be a year full of decisive moments for Europe to position itself on the global stage. How will the EU deal with China and other challenging actors? Will it be able to strengthen institutional multilateralism? Will it be successful in achieving progress in the fight against global climate change?

On an aggregate level: Will Europe present itself as a strong and united player acting based on unshakeable values? Or even more straightforward: Will Europe become more sovereign?

Frankly, we don’t know. But we are convinced of Europe’s great potential and find that 2022 offers many occasions to transform words into strong political action.