Much regional variation in performance of European populist right parties

Opinion: Consolidation without further integration could mean a period of stagnation, some economists argue

Former IMF head of mission to Ireland Ashoka Mody: believes Ireland could have pressed harder

Former IMF head of mission to Ireland Ashoka Mody: believes Ireland could have pressed harder

Sun, Dec 15, 2013, 00:01

As Ireland exits the EU-International Monetary Fund bailout, the Government continues to argue strongly in favour of its multilateral approach to the economic crisis, against those who advocate unilateral moves to punish bondholders or withdraw from the euro and/or the EU. Here, as elsewhere in the EU, centrist governing or opposition parties are holding their own, despite a stronger performance by Eurosceptic, Eurocritical and radical right parties in national elections and their expected surge in next June’s voting for the European Parliament.

The Government’s position means it must keep saying Ireland deserves retrospective debt relief and supports a prospective mutualising of debt within the euro zone, both difficult to achieve with unanimity rules because of opposition from creditor states. These states will only agree to such measures if the alternative is to lose the euro.

There is little sign of this so far, as the European Central Bank continues to guarantee the single currency’s liquidity and Germany insists on a banking union controlled and funded at national level without pooling fiscal or economic means – and equally lacking the will to create the closer common politics required to make that work.

Economists such as Barry Eichengreen, Jean-Paul Fitoussi or Joseph Stiglitz argue this is quite insufficient. Consolidation alone without greater integration will tip the European economy into prolonged stagnation. As former head of the IMF team in Ireland Ashoka Mody told this newspaper yesterday, rather than “muddling through” the crisis, European authorities have got stuck in a muddle about how to tackle it. He believes Ireland should have made more demands for relief.

Holistic politics
This systemic integration problem concerning the euro zone is matched by one concerning political and social integration. There is plenty of evidence to show the crisis has affected national electoral politics and some to show it links up national and European political levels. But voters do not have a clear choice at either level about alternative policies to handle the crisis. This failure diminishes overall levels of accountability and hence of trust and legitimacy.

Researchers at a recent conference organised by the European Union Democracy Observatory in the European University Institute in Florence heard how economic voting has punished incumbent governments held responsible for the crisis and rewarded opposition parties.

But the picture is uneven and varied. The euro crisis hardly figured in recent German and Austrian election campaigns, whereas governments in the southern debtor states and Ireland were victims of electoral revolts and greater volatility. In central and eastern Europe, the problem is a lack of well-institutionalised parties and a centrist populism directed more against corruption than economic crisis.

And the strong showing of Eurosceptical radical right-wing populism in northern creditor states such as the Netherlands and Finland has more to do with a fear further economic integration will make them suffer from unemployment than with an actual experience of crisis.

In contrast, the radical right has done badly in states affected by crisis. Spain and Portugal lack challenger parties from the radical right, while in Italy the Lega Nord lost ground and the maverick anti-establishment Five Star Movement captured 25.55 per cent of the vote. Ireland’s populism is more on the left, in Sinn Féin and Independents.

Greece is an exception, as the Golden Dawn neo-fascist party demonstrates. France too is exceptional, as the National Front picks up support from left and right-wing supporters.

Populists pitch the homogeneous, virtuous and sovereign people against a corrupt elite. Their ideology benefits from the failures of government competence. They are hostile to greater political integration in the EU.

But it is wrong to lump all populisms and Euroscepticisms together. They vary from right to left. While they may do well in the European Parliament elections, it is unlikely they will be able to translate that into a coherent programme afterwards. They are here to stay, and so need to be engaged by established parties, stimulating greater debate and voter choice. Unless that is done political disillusionment – and their appeal – will deepen.

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