PIIE Blog | RealTime Economic Issues Watch
The Peterson Institute for International Economics is a private, nonprofit, nonpartisan
research institution devoted to the study of international economic policy. More › ›
Subscribe to RealTime Economic Issues Watch Search
RealTime Economic Issues Watch

Europe’s Populist Resurgence: Not as Ugly as It Looks

by | May 29th, 2014 | 11:39 am
|

The running theme of most commentary by political and media figures is that the voting in 28 countries for seats in the European Parliament has brought the entire continent to the brink of a nasty populist takeover. It will probably surprise few readers of RealTime that this author finds that concern overblown and sees several good pieces of news in the election results.

As predicted earlier, various anti-European Union, anti-government, and nationalist parties expanded their representation in the Parliament. But also as predicted, the Parliament is nonetheless certain to be governed by a grand coalition of the main centrist parties. Hence the biggest potential impact can be found in Greece, Italy, and other member states. Yet Greek and Italian voters handed the incumbent governments a better than expected verdict.

Yes, in Greece, the radical left party Syriza became the biggest winner, with 26.6 percent, while the neo-Nazi Golden Dawn got 9.4 percent. But for the stability of the current governing coalition in Athens, the newly branded social democrats (PASOK), now called the Olive Tree–Democratic Alignment (Ελιά ΔΠ), went reasonably well with 8 percent of the vote. PASOK’s best hope for political revival remains in sticking with the coalition and hoping for a stronger recovery in Greece before the next elections in 2016. The European elections have thus given the Greek coalition an unlikely boost, which should enable it to last until at least next year, when a super-majority in the Greek parliament has to be found to elect a new president to avoid early elections.

Meanwhile, in Italy the new prime minister, Matteo Renzi, achieved a remarkable election victory with over 40 percent of the vote and hence a strong mandate to continue his reform of Italy’s electoral system and broader economy. Because of the political weakness of French socialist President François Hollande, Renzi will now have a higher profile as a reform-minded leader of the European center-left.

Populist parties came in on top of the elections in three other EU countries: the Danish People’s Party in Denmark, the UK Independence Party (UKIP) in Britain, and the Front Nationale (FN) in France, all of which got 25 to 27 percent. But none managed to break out of the traditional upper bound for populist representation in European (and national) elections of about 30 percent.

The outcome was thus not a revolutionary vote, but rather one that validates the limits of support for populist platforms. As discussed previously on RealTime, when all the other parties on the political spectrum share a consensus about EU policy, even large populist minority parties are of limited relevance, despite the existence of charismatic communicators, such as Alexis Tsipras for Syriza, Kristian Thulesen Dahl/Morten Messerschmidt for the Danish People’s Party, Nigel Farage for UKIP, and Marine Le Pen for the FN. And there is less than meets the eye on their showing. Syriza’s 26.6 percent was less than the 26.9 percent it achieved in the Greek parliamentary elections in June 2012, after almost two years of severe economic hardship in Greece.

Local factors also make it difficult to read larger trends. For example, the strong showing of the Danish People’s Party in Denmark was helped by a corruption scandal engulfing the mediocre leader of the mainstream center-right party in Denmark, Venstre, shortly before the vote. Danish voters also sent mixed signals. A referendum on Denmark’s accession to the new EU Patent Court won with 60 percent of the vote.

Meanwhile in the UK, Nigel Farage managed to increase the UKIP vote by just over 10 percentage points, from 16 percent in the last European elections in 2009 to almost 27 percent this time. This showing coincided, however, with the collapse of the vote for the rightwing extremist British National Party (BNP), from over 6 percent in 2009 to 1 percent this time. Farage thus managed to attract the votes of other mini-protest parties on the UK ballot in 2009, while the combined tally for the Conservative Party, Labour, and the Liberal Democrats in these European elections was flat at 54.7 percent vs. 55.7 percent in 2009. Labour gained votes in this election, while the Liberal Democrats lost heavily. But that is normal for the small partner in a coalition government, as junior partners tend to lose their identity in government and are consequently punished by voters. Farage should be congratulated for helping annihilate the BNP and for consolidating the protest vote in the UK, but he is not yet an unstoppable electoral juggernaut.

Lastly in France, Le Pen’s FN has perhaps the strongest claim for a transformational showing and thereby becoming a permanent and sizable political presence in France. As discussed previously, however, this success has derived from her skillful salesmanship of a welfare chauvinist platform calling for benefits and protection to be granted only to native French. In addition, the FN’s success may largely result from Hollande’s imploding presidency and the chaos in the main opposition Union for a Popular Movement (UMP). It is not yet clear that Le Pen can triumph when her opponents do not defeat themselves.

Two other outcomes warrant attention. In Spain, the combined support for the center-right Peoples Party (PP) and center-left Socialist Workers Party (PSOE) dipped to just 49 percent, indicating that Spain’s post-Franco two-party political system may be breaking down. But the plethora of smaller parties rising in their stead may not mean much. Some, like the United Left (IU), are against austerity but not anti-EU or anti-immigration. Others are clearly nationalist. But as they advocate Catalan and Basque statehood inside the EU, they are ironically more anti-Spain than anti-Europe. Apart from an unsurprising dissatisfaction with the economic situation in a country with 25+ percent unemployment and the gradual demise of the post-Franco political order, it is not clear what the election result means. To date, anti-establishment votes in Spain have not automatically become anti-EU/euro votes.

By contrast with the achievement of traditional grand-coalition parties, the election results in Hungary stand out.1 The ruling—and evidently populist—Fidesz party of Prime Minister Viktor Orban and the genuinely neo-Nazi Jobbik party repeated their strong showing from the 2009 elections with nearly two thirds of the vote. Unlike in the rest of Europe, Hungary faces genuine doubts about the stability of democratic institutions and political pluralism.

Finally, what will all this mean for the European Parliament’s policies? The grand coalition will ensure that not much will change. The Parliament is now less center-right and more center-left. But how the enlarged populist, nationalist, and fringe contingents will vote or cooperate with each other is difficult to say. As with the US Tea Party, it is not clear where this group comes down on individual issues. Most of the 24 new members from UKIP would likely support the Transatlantic Trade and Investment Partnership (TTIP), for example, whereas none of the FN’s 24 new members would do so.

Note

1. I am indebted to my colleague Anders Åslund for pointing this out to me.