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Andrew Hammond is an associate at LSE IDEAS at the London School of Economics

It has been two years since the landmark Brexit referendum sent political and economic shock waves around the world. With the exit process having consumed a massive amount of time for both London and Brussels, the European Union remains on the back foot for reasons of Brexit and beyond.

It is in this context that European presidents and prime ministers will meet this week for the final EU summit before the fall. The very limited progress between London and Brussels in Brexit talks will be a key feature of the session and, with little to no progress expected, October’s meeting could determine whether a deal is agreed, or not.

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In the two years since the Brexit referendum, the mood music across the EU’s 27 states has been mixed. In the second half of 2017 and early 2018, EU politicians had a new spring in their step as the continent’s political and economic climate improved. What drove this turnaround in sentiment was the failure of far-right populists to win key electoral contests in France and the Netherlands, and many leaders’ sense that the current Euroskeptic wave may have reached its peak.

This political fillip has been reinforced by stronger economic data, with the euro zone economies performing better after several years of slow growth. However, the mood is darkening again, as shown by the faltering Brexit talks; plus the election of Italy’s Euroskeptic Five Star Movement-The League coalition government; the possibility that Angela Merkel’s German government could collapse in coming days; and the growing populist surge in eastern Europe, including Hungary and Poland.

In the context of the Brexit vote, European Council President Donald Tusk last year appeared despondent when he remarked the threats facing the EU were perhaps “more dangerous than ever” with three key challenges. According to Mr. Tusk, the first two dangers related to the rise of anti-EU, nationalist sentiment across the continent, plus the “state of mind of pro-European elites” which Mr. Tusk fears are too subservient to “populist arguments as well as doubting in the fundamental values of liberal democracy.”

While Brexit exemplifies these challenges, the problem is by no means limited to Britain. Indeed, French President Emmanuel Macron conceded this year that even France, one of the two traditional motors of EU integration alongside Germany, would probably vote to leave the EU if presented with a similar choice to Britain’s referendum.

At the forthcoming summit, a string of divisive issues on the agenda speak to Mr. Tusk’s concern. This includes asylum and immigration, which risk the future of Ms. Merkel’s administration in Berlin because of her rift with her coalition partners on this issue.

Specifically, Ms. Merkel is under pressure from her interior minister, Horst Seehofer, who from July 1 is threatening to turn away any asylum seekers at the German border already registered in other EU countries unless Ms. Merkel can find a multilateral solution with Germany’s EU partners. This exposes divisions across the continent between Germany and France, which are pushing for a deal, and other countries run by populist leaders who are much more skeptical.

This harder-line stand was exemplified in Hungary when the parliament passed laws on June 20 to criminalize any individual or group offering to help asylum claimants. This follows Viktor Orban’s landslide re-election in April after a campaign in which immigration featured heavily.

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If these issues were not big enough, there’s the third threat cited by Mr. Tusk: an increasingly assertive Russia, and instability in the Middle East and Africa, which has driven the migration problems affecting Europe. And intensifying this is uncertainty from Washington with President Donald Trump calling for more Brexits across the continent.

In this context, Brussels is pushing forward with a European Defence Action Plan that advocates greater military co-operation between EU member states. This is being driven, in part, by Mr. Trump’s uncertain commitment to European allies.

Taken overall, decisions in coming months will help define the EU’s political and economic character in the face of multiple challenges. While a number of European leaders sensed last year that the Euroskeptic wave may have passed, storm clouds are gathering again.

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