STRATEGIC ENVIRONMENT  the UK's Brexit vote, the EU is now in the middle of the difficult process of redefining its relations with the UK. This process is as complex as was feared, will take more time than both sides would like, and will prolong the uncertainties at the heart of the European order well into the next decade. The Brexit debate will pose fundamental questions for the EU for years to come: if not questions about the continued existence of the institution itself, then about its ability to function as an effective force for order on the European continent and to exert influence at the global level. In any case, there is as yet no sign of the ‘salutary shock’ anticipated by some, which would provide the political basis to lend fresh impetus to the renewal of the EU. Initial decisions on new joint efforts in the field of European defence still have to pass the test of implementation or will once again prove to be an unfulfilled ambition. The prospect of a multi-speed EU may seem politically desirable as a new vision in some places, but would accentuate the fault lines between a dominant core and a periphery in economic and social difficulties. The movement toward integration between the old member states in the west and the new ones in the east is threatening to come to a halt or even to go into reverse, a development that will be an impediment both to the EU and to the Organisation for Security and Cooperation in Europe as organizations relevant for security in Europe. Fault lines in our immediate environment – between north and south, between east and west, between core and periphery – will be thrown into sharper relief. 14 SI TUATIO N R E P O RT 2018 | F I S The eurozone, and with it the common currency, are also in crisis, even if the public is less aware of this. The level of government debt, which has increased sharply since the international financial crisis of 2007/2008, and a fragile banking system, are still leading to concerns about financial stability and even about the survival of the euro. The eurozone as an institution has survived the years of severe crisis surrounding painful economic reforms in countries on the periphery. However, even under the favourable conditions of an expansionary mone­tary policy, large European economies such as those of France and Italy have not yet been sufficiently reformed and consolidated. These are still of crucial importance to the economic and political future of the continent. The inability to formulate a convincing common way forward in order to overcome the debt crisis across the entire eurozone is one of the reasons for the political crisis. It is undermining not only the European institutions, but also those of the nation states that make up the EU: There is a diminishing political will in the national decision-making bodies to find pan-European solutions, and even national problem-solving mechanisms are coming under pressure from autonomist, separatist and populist movements. Western European states generally have constitutional systems based on stable institutional foundations that can withstand this pressure better and for longer than others. In Central European countries, by contrast, these may fail. Even NATO, the security cornerstone of the European order, is showing distinct symptoms of crisis. The alliance is having to deal simulta-