Former Finance Minister Rishi Sunak, 42 years old, has been declared the new leader of the UK’s ruling Conservative Party and will become the next Prime Minister, succeeding Liz Truss, who resigned on October 20 after only a month and a half in office.
Sunak will be the UK’s third Prime Minister in less than two months, after Boris Johnson and Liz Truss. This reflects a dramatic upheaval in the UK, a former EU member, and Europe’s second largest economy after Germany. A large part of the problem is record inflation, driven by high fuel and food prices, due to the Russia-Ukraine conflict.
The rest of Europe is facing similar difficulties.
Challenges to EU countries
Experts say Sunak will face multiple challenges beginning with reviving an economy that is on the verge of recession.
Before Liz Truss announced her resignation, inflation in the UK reached 10%, a 40-year high. The Labor Party blamed the Conservative Party for the crisis and called for an early election.
Italy is also facing serious challenges. Newly-elected Prime Minister Giorgia Meloni and her cabinet must shoulder the heavy tasks of preventing an imminent recession and controlling energy prices and inflation which are at their highest level in decades.
French President Emmanuel Macron has to cope with protests against high of fuel and food prices and high unemployment. Several protests last week turned into riots, raising fears of a wave of violent protests similar to late 2018.
Germany is also facing its highest inflation rate in decades and the risk of an economic recession. According to the German Economic Institute (IFO) Germany's GDP could shrink 0.3% in 2023 due to high inflation and a gas shortage. Germany could fall into recession as soon as this winter with an inflation rate forecast to be 8.1% this year and 9.3% in 2023.
Solutions and outlook
Independent analysts agree that all these difficulties stem from one main reason – the Russia-Ukraine conflict. Therefore, the first priority should be to resolve that conflict.
Hungarian Foreign Minister Peter Szijjarto has warned that the energy crisis in Europe could continue into 2023 and 2024, and possibly beyond. He said that the crisis is being fueled by structural geopolitical factors tied to security, which will require long-term solutions.
He repeated Hungarian President Viktor Orban’s view that the EU leadership sparked the energy crisis by introducing “counterproductive” sanctions on Russian energy because of Moscow’s special military operation in Ukraine. He called on the EU to find another way to end the conflict, rather than imposing more sanctions.
Turkish Prime Minister Tayyip Erdogan has argued for a peaceful resolution of the Russia-Ukraine conflict. He said the door to peace must always be open, because once the conflict is resolved, the problems in Europe will be addressed in all socio-economic, security-defense, and political-diplomatic aspects.