Essay on the Political Impact of Austerity in the EU

“The financial crisis has boosted the far right and the far left and weakened the centre” – to what extent is this an accurate summary of the political impact of the crisis? The following thesis will illuminate the diversifying of European politics. The extent that the above statement is an accurate reflection of the political impact will be examined through the considerations of the diversity that characterises the European continent and in particular the Eurozone. Unity in Europe has been based more coherently on economic grounds than on political ones, infused in people’s identities is the conventional allegiance to the nation-state which collides and overcomes sentiments of pan-Europeanism. Castiglione, Dario. "Political Identity in a Community of Stangers." In European Identity, by Jeffrey Checkel and Peter Katzenstein, 29-51. Cambridge: Cambridge University Press, 2009. In spite of the integration and the thorough criteria for European Union membership, the financial crisis affected the numerous states disproportionately. Following on, the pre-existing state of the EU and its continued enlargement reveals a clearly defined core and periphery, with states at the core typically although not exclusively experiencing less severe economic impairments. Germany’s economic dominance within Europe is exacerbated by the consistent strengths of its balance of payments, and in particular the current account component which persistently remains at a high surplus. European Commission. "Macroeconomic Imbalances: Germany 2014." http://ec.europa.eu/. March 2014. Several member states in severe contrast are heavily indebted and dependant on fiscal stimulus. Proponents of Keynesian economics argue that deficit countries and surplus countries have to contribute to reduce imbalances and alleviate the burden efficiently. Robert Skidelsky, Vijay Joshi. "Keynes, Global Imbalances, and International Monetary Reform Today." http://www.skidelskyr.com/. June 23, 2010. However there continues to be potent economic imbalances amongst the diverse economies of Europe as this theory is applied but with austere conditions. The following paragraph will firstly present a background to some of the facets of the financial crisis. The Eurozone’s economy has been forecast to recover significantly throughout 2014 and 2015; these welcome figures come following the downturn which at its peak reduced output by approximately 5% in the first three months of 2009 and subsequently increased unemployment rates to 12% by 2013. European Commission. "Key Indicators for the Euro Area." http://ec.europa.eu/. March 06, 2014. The Eurozone in particular has been detrimentally exposed to the global downturn owing to its internal integration mechanisms, with the single currency and the absence of barriers towards the movement of various forms of capital. Furthermore the Eurozone is also a centre for worldwide commerce within a global network of trading partners, corresponding to the neoliberal macroeconomic policies which have predominated since the 1980’s and the end of the Cold War. The gross disruption to the Eurozone’s economic environment has resulted in a recent period of strong austerity measures and bailouts, the impetus for which is to re-stabilise both the weak banking and financial sectors in the private economy and government finances through restructured, adjusted and sustainable fiscal programmes. Boyer, Robert. "The Present Crisis. A Trump for a Renewed Political Economy." Review of Political Economy, 2012: 23-24. The enfranchised populous across the Eurozone has typically been disregarded by their governments and the supranational bodies providing the bailouts, the ‘Troika’ consisting of the European Commission, the European Central Bank and the IMF. Co-operating together, these organisations employ the maxim ‘there is no alternative’ Germanos, Andrea. "There Is No Alternative to Austerity, Troika Reiterates. https://www.commondreams.org. May 3, 2013., as such the strict conditionality that states have to implement is considered the necessity and should not be open to debates or deliberations. Protests and anguish have been widespread and directed towards the perceived governing of Europe by the troika and the governments at the centre of the political spectrum who acquiesce to their demands, sometimes with little resistance. Russia Today. "Troika ‘governor’ of European ‘colonies’: Lawmakers fed up with debt crisis tactics." http://rt.com. February 27, 2014 The persistently high unemployment rates in particular have fuelled and sustained an environment of discontent amongst beleaguered citizens, this combined with their lack of participation in the governing of their country or the European Union has cultivated political elements with more radical agendas across the continent whose ascent, recognition and participation in government has established a changing European political environment. According to the historian and biographer Ian Kershaw ‘without the Great Depression, without the crash of 1929, without the disintegration of the bourgeoisie, the liberals and the conservatives, Hitler would have remained a nut case on the political side lines.’ National Geographic Channel. "Apocalypse: The Rise of Hitler (Becoming Hitler)." France Télévision Distribution, 2011. Alongside this viewpoint, there is a general consensus that the Great Depression and the general economic fragility of the inter-war period contributed to the outbreak of the Second World War. In this most extreme economic environment, the politics of a nation were subjected to equally extreme measures. The most recent global downturn, while potent and austere is not comparable with the depression of the 1930’s; accordingly the responses undertaken by decision makers were conditioned largely by a vastly different global economic structure, which produced a dissimilar set of outcomes. Drezner, Daniel W. "Yes, The System Worked." In The System Worked: How the World Stopped Another Great Depression, 29-31. Oxford: Oxford University Press, 2014. The actions by policy makers have not prevented changes in the political environment however. These range from growing disillusionment with the established political powerbase and the ascendancy of less established, more radical opposition groups to the electorate transferring their votes and confidence directly to the main opposition parties of either the centre-left or the centre-right. The populist and radical political voices across Europe exist in various different forms but all advance a stern opposition to the incumbent governments and put forth a resistance towards elements they believe contributed towards the crisis. Euro-sceptic, anti-establishment themes proliferate, assigning blame towards the economic integration and internationalism which exposed states to the adverse consequences that otherwise may not have infiltrated as potently. Far right mandates typically evoke Euro-scepticism in conjunction with hostility towards minority groups with distinctions re-emerging between ‘us and them’ Norris, Pippa. "'Us and them': Immigration, Multiculturalism and Xenophobia." In Radical Right: Voters and Parties in the Electoral Market, 166-191. Cambridge: Cambridge University Press, 2005., feelings that would otherwise have minuscule support during periods of stability and prosperity. The most adverse effects were felt in Greece, and the political climate reflects a substantial emergent support base for the far-left coalition Syriza and the far-right Golden Dawn. Both parties succeeded in raising their profile during elections in 2012, with Syriza strongly challenging the centre-right government of Antonis Samaras’ New Democracy party. Their basis for this support comes from the disenfranchised, unemployed youth who regard austerity as the core principle obstructing job creation. Phillips, Barnaby. "Why Greeks voted the way they did." aljazeera.com. June 17, 2012. This support base subsists despite the country’s aging population, with the majority of citizens being between the ages of 40-44. Central Intelligance Agency. "The World Factbook." https://www.cia.gov/. April 11, 2014. Conversely, Golden Dawn cites immigration as the root cause of Greece’s woes, campaigning on the slogan ‘so we can rid this land of filth’. Rabinowitz, Gavin. "Website of Greek neo-Nazi party is suspended." http://www.jta.org/. May 2012 Reports reveal their violent rhetoric towards minorities as well as their fierce opposition towards the internationalist’s austerity programmes. Recent arrests of key personnel, the removal of their website and threats towards the party’s legality has however limited a largely localised support base. BBC News. "Profile: Greece's far-right Golden Dawn Party." http://www.bbc.co.uk/. October 1, 2013. Furthermore the rigidity of their mandate hinders open dialogue and consequently parallels with the major criticism regarding the democratic deficit of the incumbent political establishment, and the party’s extreme views give rise to labels such as neo-Nazi and fascist which disrupts their clout and as a result they’re restricted to a predominantly firm support base under the firm leadership of Nikolaos Michaloliakos. Smith, Helena. "Greece's Golden Dawn to form new party if banned from polls." http://www.theguardian.com/. February 2, 2014. Syriza’s support strongly supersedes that of Golden Dawns’ and the majority of other Greek parties; its basis as a coalition of the united left evokes a strong democratic and internal co-operative principle, however their unwillingness to concede to the provisions of the Troika’s austerity programme has potential strains on Greece’s relationship with its trading partners and disturbs the establishment in their own country and abroad. Nevertheless, Alexis Tsipras’ EU election campaign does not waiver from commitments towards the end of austerity, but crucially a loyalty towards a united Europe. SYRIZA Press Office. "Visit of the President of SYRIZA Alexis Tsipras in Dublin From the SYRIZA Press office." http://www.alexistsipras.eu/. March 2014. In association with Greece, Spain, Portugal and Ireland have experienced economic turmoil resulting in austerity programmes and bailouts. In a fashion dissimilar however, moderate and established centre parties in all states have endured and remain at the forefront of Spanish, Portuguese and Irish politics. The premature resignation of the former Portuguese Prime Minister Jose Socrates followed widespread protests and a failure to obtain parliamentary support for the fiscal bailout to alleviate the debt of almost 120% of GDP. This maneuverer corresponded similarly to the Irish case a few months earlier, whereby the mounting Irish deficit had put pressure on and destabilised the government leading to fresh elections and a transfer of power to the main opposition party. Norman Schofield, Maria Gallego. "Social Choice." In Leadership or Chaos: The Heart and Soul of Politics, 74. New York: Springer Heidelberg Dordrecht, 2011. Portugal’s victorious opposition lead by Pedro Passos Coelho insisted the centre-left socialist party had poorly managed government finances and entrusted the private sector to renew economic growth following the imposition of the austerity measures. Inter-Parliamentary Union. "Portugal: Assembleia da Republica (Assembly of the Republic)." http://www.ipu.org/. 2013. Spain’s electorate also applied an anti-incumbent strategy in 2011 with the transfer to the centre-right, capitalising on the plummeting support for the Socialist Workers' Party, who exercise a centre-left, social democratic mandate in spite of the name’s connotations. Mariano Rajoy’s government presides over a country embroiled in ongoing protests and civil unrest under their maxim los Indignados (the outraged), primarily over the austerity’s negative impact on employment and welfare. A protest targeted at the prime minister in 2013 gathered momentum rapidly following the allegations of corruption and embezzlement. BBC News. "Spanish Protests After PM Rajoy Denies Slush Fund Claim." http://www.bbc.co.uk/. February 3, 2013. In conjunction with the economic background, the lack of affiliation with political powerbase engulfs Spain and adds an anti-establishment rhetoric to their popular grievances. Distrust in the mainstream government has not however caused the strengthening of the radical political groups, despite Spain consisting of numerous minor parties with diverse agendas, including the Basque and Catalan separatist groups. The extreme radical elements, especially the far right’s operations are loosely organised and lack formidable political affiliation. The majority of the Spanish public are reluctant to engage with extreme elements and the general consensus remains in support of the EU and sustainable integration. Spongenberg, Helena. "Populist Spanish parties test water in EU elections." http://euobserver.com/. February 21, 2014. The past restrictions under Franco’s dictatorship and the fresh democratic framework have nonetheless enabled the existence of a breadth of diverse movements. Moffett, Matt; Roman, David. "Franco's Legacy Rattles Spain." The Wall Street Journal, 2013: 14. Previously citied in this work was the theme of the EU’s core and the periphery. The creditor nations with relatively healthier economies, although undeterred by pressurised austerity measures and bailouts have not been exempt from a weakening of the political centre, the following section will look at both France and the Netherlands. Their position at the core of the global economy and within the European Union correlates with World Systems Theory. Their recent historical influences and proven economic capacities distinguish them as key components in the neoliberal, capitalist economic structure. Wallerstein, Immanuel. "Inequalities or Core and Periphery." In The Capitalist World-Economy, Cambridge: Cambridge University Press, 1997. Individualism and national pride are typically infused in France and the Netherlands and these sentiments transfigure into widespread euro-scepticism in both countries. The previous decade saw French and Dutch ‘no’ votes in a referendum on the proposed EU constitution, symbolic of their lack of affiliation with a European identity. Daily Mail. "At least we all know now who REALLY runs Europe." http://www.dailymail.co.uk/. May 31, 2005. Medrano, Juan Diez. "The Public Sphere and the European Political Identity." In European Identity, by Peter Katzenstein Jefferey Checkel, 83-89. Cambridge: Cambridge University Press, 2009. The far-right has recently reinvigorated in France and the Netherlands with both radical parties obtaining sufficient support in their opposition towards their mainstream centrist establishment. The French national front finished third in the first round of the 2012 election, with a subsequent extension of their popularity in the most recent local elections despite a shallow representations in only 600 of France’s 36,000 municipalities. Willsher, Kim. "French far-right Front National party makes big gains in local elections." http://www.theguardian.com/. March 23, 2014. Irrespective of the party’s ambition and the conviction of their followers, the runoff voting electoral system indirectly favours a two party structure which compromises the representation of the majority of peripheral groups, including those of radical parties. Unexpectedly, the election a decade before (2002) produced the national front’s strongest challenge to the opposition. Jean-Marie Le Pen benefited from a fragmented centre-left coalition and entered the second round, generating the maxim ‘vote for a crook, not for a fascist’ across the left and centre of the political spectrum who gave Jacques Chirac their unbounded support. The Economist. "Jacques Chirac Wins by default." http://www.economist.com. May 9, 2002. The French far right reflects a populous increasingly disillusioned with the integration mechanisms their ancestors had constructed over two generations. The termination of the Euro and an EU believed to be overpopulated, undemocratic and bureaucratic forms the basis for the national front’s foreign policy motives. Likewise, the reversal of depreciating French living standards and national sovereignty rests on restored border controls. Le Front National. "Europe: Une Europe au service des peuples libres." http://www.frontnational.com/. 2014 The Dutch far right rose to prominence in the 2010 general election, which also restructured and destabilised the centre of Dutch politics, causing dramatic losses for the Christian democrats at the benefit of the opposing centre-right People's Party for Freedom. Geert Wilder’s Party for Freedom (PVV) contributed and gained most in terms of representation in the lower house from this fractured centre, obtaining a total of twenty four seats. Meulen, Anna Marij van der. "Far Right Surges in Dutch Election." Wall Street Journal, June 10, 2010. The party’s popularity’s initially hinged primarily on their anti-Islamic rhetoric. Reducing the Islamic influences in the Netherlands, a religion deemed by Wilders as unethical and against Dutch values is continuously campaigned for, however their party has recently increased their euro-sceptic, nationalistic character associating claims that the financial crisis has been the product of EU integration, association with weaker peripheral economies and the macroeconomic policy restrictions that hinder Dutch economic activity. The solutions lay in the Netherlands severing their monetary and economic union with Europe, pursing a separate path towards commerce as had been the foundation of Dutch prestige in bygone centuries. A recent PVV report, assembled under the direction of an independent macroeconomic forum titled ‘NExit: Assessing the economic impact of the Netherlands leaving the European Union’ was compiled to verify the potentially vast benefits to the Dutch economy of an EU exit in the long run. Capital Economics. NExit: Assessing the economic impact of the Netherlands leaving the European Union. Macroeconomic Data Analysis, London: Capital Economics Limited, 2014. Wilders has also assumed a close correspondence with the national front in France, to some extent on ideological grounds as well as in formal alliance. Both far right representatives manifesting their hostility towards their county’s establishment and explicitly towards the ‘monster in Brussels’ that the establishment submit toward. Fontanella-Khan, James. "Wilders and Le Pen join forces against Brussels." http://www.ft.com/. A coalition of the far right in this context is however more of a strategic nature than one of compelling solidarity; the radical left’s ideology alternatively enables groups to operate in a more prevalent collusion than those of the far right. This work has looked at some of the most prominent case studies in the development towards more radical agendas in European politics. The effects of the economic downturn have illuminated the Eurozone’s and the European Union’s weaknesses, subsequently captivating a multitude of alternative viewpoints on the political periphery and disillusioning the electorate of many constituent states. The analysis reveals only minor correlation between the extent of adversity caused by the downturn and the rise of radical parties. Developments in Greek politics bore themselves clearly out of the austere hardships, whereas in Portugal, Spain and Ireland exhibited a minor radicalisation of the political environment on the surface, however in Spain particularly the widespread ongoing protests suggest the lack of support for mainstream politics and potential for the proliferation of underground radicalised insubordinates. Moffett, Matt; Roman, David. "Franco's Legacy Rattles Spain." The Wall Street Journal, 2013: 14. The prompt changes in the political climate of the core constituent states of France and the Netherlands were limited in their direct affiliation with the financial crisis, and a comparable weak correlation is present as was identified in the previous relationship between the depth of adversity and radical political proliferation. Both countries had exhibited populist and Euro-sceptic sentiments in the previous decade as well as viable third party candidates with radical components, with the French far right having proliferated under Jean Marie Le Pen, and the Dutch radical left Socialist Party showing its strengths in 2006, with 16.6% of the votes. In conclusion, the financial crisis has aggravated demands for transformations in European politics to a greater extent than the crisis itself being the root cause. The rise of radical groups and emerging populist movements reflect the lack of affiliation between the electorate and the centrist parties. Changing voting patterns however also depend on various other factors, especially the mandate of the parties in contention for representation and their presence during the crisis period. The Italian Five Star Movement, the Hungarian party Jobbik and the Dutch PVV only emerged in recent years and quickly challenged the centrist parties at the height of the calamities. Schumacher, Gijs. "Sympathy for the ‘devil’? Voting for populists in the 2006 and 2010 Dutch general elections." Electoral Studies, 2013: 124-133 There are also difficulties in compiling evidence for political discontent if no party represents a clear reflection of people’s opinion or people are apprehensive towards admitting the support for these groups in elections. People’s unwillingness to admit to affiliation with radicals or formalise into political entities affects states such as Germany where the law prohibits extremist parties. Nora Langenbacher, Britta Schellenberg. Is Europe on the 'Right Path', Right-wing extremism and right-wing populism in Europe. Academic Foundation Forum, Berlin: Friedrich-Ebert-Stiftung, 2011. Historical factors also contribute to the contemporary political dynamics in Germany and Spain. Similarly, the French voting system is what greatly inhibits the growth of the National Front. 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