The European Union (EU) has been under tremendous political and financial pressure since the Greek debt crisis. So far it's been able to hold together, demonstrating the resilience of the economic and political partnership. That said, even as financial pressures arguably have lessened in the past year, political pressures are ratcheting up. Could 2016 possibly be the year that the EU collapses?

The Economic Perspective

A key reason why the EU has been so attractive from an economic perspective is that it widens trade by eliminating many barriers and, for eurozone members, designating one shared currency for all member transactions. Many EU nations also have benefited, in terms of trade and of borrowing power: being part of the eurozone lowers their risk and, consequently, their rates. But it's worth emphasizing that there's currently no mechanism for exiting the eurozone once a nation is fully integrated, down to the currency (19 out of 28 EU member countries are in the eurozone: the remainder have retained their own currencies). That means any nation that pulls out of the eurozone will pay a serious economic price. (See also: What Could Happen If the Eurozone Breaks Up?)

That said, there's also an economic price to be paid for continuing as a member of the eurozone, as some struggling European economies can attest. With limited fiscal tools available to central banks, it's difficult to inflate and stimulate like a single country that has complete control of its currency. There's also an international trade penalty, in that stronger eurozone nations bolster the euro's value via the power of their economies, thus making the goods of weaker nations more expensive and so less competitive internationally than they otherwise would be.

Yet on pure economics alone, it still makes more sense for a nation to try nearly any alternative before considering an exit. A majority of trade in the eurozone is between members, so an exiting country would have to re-negotiate everything in order to regain access to their biggest trading partners. Not to mention the currency switchover and the subsequent market hammering, as debts unroll and many investors likely flee the exiting country. On top of this, 2015 wasn't actually a bad year economically for the EU, with the Greek situation quiet (if not resolved) and modest GDP growth posted overall.

The Political Perspective

The pressure on the EU at the moment is more of the political variety, and it comes from a few different issues. One is the ongoing disagreement over who decides fiscal policy and what say weaker economies have in those decisions. This is highlighted by the fact that Greece is going through political coalition after coalition while still trying to stay in the eurozone. The larger issue, which affects all EU members, is the ongoing influx of refugees from Syria and other nations into the EU. The divide on this issue is becoming quite deep. Even Germany, which has been a proponent of taking in refugees, is split within itself after assaults that occurred on New Year's Eve in Cologne.

The economic impact of the refugee crisis obviously will play out over the next few years, but some analysts forecast a net positive gain for nations that accept large numbers of people, as these countries are essentially importing a new workforce in its prime. However, current political turmoil is driven more by social issues than economic ones, as integration between European and Middle Eastern and other cultures appears to be rocky at times. Although no nation has threatened to leave the EU because of the refugee crisis, differing national responses to the crisis indicate there are serious cracks in the political partnership.

The Bottom Line

The refugee crisis is a potential fault line in the European Union, as member nations differ on their policies for accepting migrants. Given the strong economic incentives to stay in the EU, it would take a serious falling out among members over political issues like the refugee crisis to seriously threaten the EU's stability. Even then, it's still hard to imagine that a country would willingly pull the plug on membership because the price, in terms of trade and market penalties, is so high. So while the EU faces its biggest test since the Grexit, it's unlikely that 2016 will see these strains lead to any type of breakup.

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