The European Union is facing a political crisis unprecedented in its 59-year history. This club of democratic countries established primarily to promote peace and prosperity in postwar Europe is facing a nationalist and populist surge that threatens the democratic principles at the very heart of the EU. Capitalizing on the European sovereign debt crisis, the backlash against refugees streaming in from the Middle East, and public angst over the growing terror threat, previously fringe political parties are growing with alarming speed.
The blame falls in part on both center-right and center-left party leaders who have failed to respond effectively to the European debt crisis. The ruling parties’ obsession with fiscal austerity, and with supply-side policies of privatization, deregulation, and liberalization, effectively triggered a ‘lost decade’ of economic stagnation, rising unemployment, increasing poverty, and dwindling EU solidarity that paved the way for the poisonous ultra-nationalism now on the rise. All this has driven trust in the EU to an all-time low and fueled pathologies not seen since the 1930s, placing Europe’s integration project on truly precarious ground.
The good news is that this trend can be reversed—but only if European leaders, particularly on the left, articulate a coherent alternative to the failed economic policies of the last decade. An economic policy that promotes growth, better jobs and wages, and social inclusion can stem the nationalist tide.
In Europe, the nationalist threat comes principally from the East. Less than a decade after joining the European Union, most Eastern European countries are now ruled by nationalist populist parties that openly flout the rule of law and explicitly reject the values of liberal democracy. In such countries as Hungary, Poland, Slovakia, and the Czech Republic, political liberalism is being challenged as candidates and elected officials openly flirt with illiberal and authoritarian forms of government. Spearheading this trend is Hungarian Prime Minister Viktor Orbán, whom EU Commission President Jean-Claude Juncker half-jokingly called a “dictator.” Orbán has denounced the West as decadent and obsessed with money, and outlined a future Hungarian state—a “work based society”—of a resolutely non-liberal nature. The Orbán's government has transformed Hungary into a semi-authoritarian regime that limits freedom of speech and assembly, media pluralism, and the protection of minorities. Orbán has also curbed the independence of the courts, the civil services, and other institutions essential to the rule of law.
There are even reports of physical violence in Hungary against Roma gypsies, and of anti-Semitic outbursts. For example, some Hungarian radicals have pressed for the government to register all Jews living in Hungary, and to evaluate the potential danger they pose to the nation. In Poland, the new, right-wing Law and Justice government also has set out to exploit a mix of ethnic nationalism and anti-capitalism reminiscent of Europe's interwar period, when authoritarianism—masquerading as democracy—prevailed in Admiral Miklós Horthy's Hungary and Marshal Józef Piłsudski’s Poland. Robert Fico, a Slovakian populist and authoritarian “Social Democrat,” is among the most vocal proponents of anti-migrant policies. It would not be surprising if Fico’s new coalition government, formed with the right-wing Slovak National and Siet parties, joins Hungary and Poland in the region’s worrying turn toward “illiberal democracy.”
At the same time, support for nationalist populist parties in Western Europe has skyrocketed to unprecedented levels. In Austria, the candidate of the right-wing populist Freedom Party (FPÖ), Norbert Hofer, swept the initial round of the small country’s presidential elections with a comfortable 35 percent of the vote. After a humiliating defeat of the candidates put forth by the current government’s two leading coalition members—the centrist Social Democrats and the People’s Party—the Social Democratic Chancellor Werner Faymann resigned. Current polls consistently show that the Freedom Party, a descendant of the old Austrian Nazi party, is now the most popular party in Austria.
In France, Austria’s much bigger neighbour, polls show far-right National Front candidate Marine Le Pen beating deeply unpopular Socialist President François Hollande in the first round of next year’s national elections in April. Even in Germany, where far-right parties were vigorously suppressed after World War II, the populist and Euroskeptic Alternative für Deutschland (AfD) recently came away with 24.2 percent of the vote in the regional elections in Saxony-Anhalt. The result triggered something of a political earthquake in Germany. In Sweden, which until recently has had one of Western Europe’s most generous asylum policies, the far-right Swedish Democrats—a party with neo-Nazi origins—has become Sweden's largest party, supported by more than 25 percent of voters. In two other Nordic countries, the Finns and the Danish People’s Party—both right-wing, anti-European parties—have become the second-largest parties in their respective national parliaments. Both have promised more public spending on pensions, health care, and other welfare benefits—but only for native Finns and Danes.
To prevent history from repeating itself, Europe must act now. Since the beginning of the eurozone economic crisis in 2009, governments across Europe have single-mindedly embraced fiscal austerity. This has meant double-digit government spending cuts, and the elevation of the austerity paradigm spearheaded by German Chancellor Angela Merkel to an essentially “unbreakable law.” The new Fiscal Compact, a treaty signed by all EU members except the United Kingdom and the Czech Republic, effectively outlaws the countercyclical economic policies espoused by Keynesianism, and establishes austerity and balanced budgets as the new fundamental principles of the EU constitutional order. As one American observer noted sarcastically, such developments should make Tea Party loyalists in the United States green with envy.
The problem is that this myopic austerity focus rests on a misdiagnosis of the euro crisis, has backfired economically, and has triggered grave social and economic repercussions in indebted countries. Nevertheless, austerity remains the virtually unchallenged “official” EU economic doctrine. What Europe needs more than anything is a new anti-austerity coalition. Only a Europe willing to revert back to some basic Keynesian policies of economic stimulus, as the U.S. government did at the outset of Barack Obama’s presidency, combined with economic innovations that include much-needed investments in infrastructure, education, and social programs, can restore Europe to stability, and reverse its dangerous nationalist surge.
Unfortunately, the politically weakened European left—the traditional standard bearer of the social democratic movement— is now playing defense. Instead of offering novel progressive solutions, the left has meekly parroted the new politics of fiscal austerity and the balanced budget fundamentalism of the center-right parties. But instead of surrendering to the austerity dogma, the left must respond to the social anxieties that are helping fuel nationalist populism. Populist leaders are promising better pensions, health care, and more jobs, an agenda that is winning over the abandoned working class communities that were once a stronghold of the European social democratic and other progressive parties. Leaders on the left can reverse the nationalist trend by returning the EU to its initial role as the promoter of European solidarity and equality, specifically through job training, “green” growth, and other public investments. As the humiliating defeat of Greece’s leftist government by the German-led austerity coalition illustrates, this will take a concerted, Europe-wide initiative. If the left doesn’t start offering a more compelling agenda, Europe is on a dangerous political path.
This story has been updated.