Η Goldman Sachs μελετα ολες τις εκλογικες αναμετρησεις στην Ευρωπη το 2015! Τι περίεργο.

Europe’s new politics: A populist challenge to the mainstream.
2015 is a busy election year in the European Union (Exhibit 1). Eight parliamentary elections are scheduled: in Denmark, Estonia, Finland, Greece, Poland, Portugal, Spain and the UK. France, Spain and Italy face regional elections, and the Italian parliament will have to elect a new president should the incumbent resign (as expected, possibly in the coming weeks).
Admittedly, in a union of 28 member states, every year will have its fair share of elections. But 2015 promises a number of crucial contests. Fuelled by the employment cost of austerity and economic adjustment, the rise of populist parties at the expense of the mainstream political establishment (Exhibits 2 and 3) may challenge the policy assumptions currently underpinning the integrity of the Euro and the wider EU.
The Greek election on January 25 is a case in point. Opinion polls suggest there is a strong possibility of victory for the radical left-leaning Syriza party, which is committed to renegotiating the terms of the adjustment programme, upon which the financial support Greece has received from the rest of Europe (and the IMF) depends. At a minimum, any such attempt at renegotiation threatens to disrupt the Greek financial markets and economy. And should relations between a new Greek government and the ‘troika’ sour, experience has demonstrated that the wider market implications could be profound, if concerns about ‘Grexit’ re-emerge and contagion to other countries threatens.
Understanding electoral dynamics will therefore be central to understanding economic and market developments. In today’s Weekly, we discuss the evolution of Europe’s new politics. A number of conclusions emerge:
>>Traditional left / right political distinctions that have governed European politics for most of the past century have declined in importance of late.
>>Other dimensions have assumed a greater role in defining political parties and allegiances. In particular, concerns about the impact of globalisation – notably via immigration, wage developments and inequality – have fuelled the rise of populist parties on both the left and right.
>>In Europe, given the role played by the EU in opening markets and facilitating intra-European freedom of movement, such populism has assumed a Eurosceptic tone. And, because of concerns about the economic costs of austerity and adjustment (in the stressed economies) and fears of fiscal redistribution (in the core), within the Euro area populist parties have raised questions about the viability and desirability of monetary union, at least as it operates at present.
Competing for the ‘median voter’
In characterising their ideology or orientation, political parties have traditionally been placed on a left / right spectrum. Parties to the right favour lower taxes, less public spending, the privatisation of public assets and less regulation. Parties to the left tend to favour greater public spending funded by higher taxation, more public ownership and a greater role for the state in regulating the economy.
Within this framework, the centre of the ideological spectrum constitutes the key political prize. In order to achieve a majority, parties on the left and right converge towards centrist positions in order to attract the ‘median voter’ (who will put them over the 50% plus one threshold required to govern). Periodically, activists seeking to serve the interests of the party base will pull policies away from the centre ground. But such a strategy can ultimately prove electorally unviable, forcing a return to moderation over time.
Of course, this abstract framework is a gross simplification of reality. First, the nature of the electoral system matters. Competition for the median voter is most relevant in a UK-style first-past-the-post electoral system. In the proportional systems that are more typical in continental Europe, the pressure to compete for the median voter is dissipated. Second (and more relevant for the subsequent discussion), politics is never as one-dimensional as this framework assumes. Societies are riven by other political fissures: regional (e.g., the separatist movements in Spain, Italy or the UK); denominational (e.g., in the Netherlands); or linguistic (in Belgium). Political competition occurs beyond the traditional left / right divide.
Nevertheless, for long periods in many countries, this framework has constituted a useful lens through which to view political developments. Even as changes in technology, preferences, working arrangements and demographics have shifted where the median voter lies, the convergence of policies towards that voter’s views has persisted.
Crucially, the set of populist parties encompasses both those that would be viewed as right-of-centre on the traditional left / right political spectrum (i.e., those espousing more nationalist and/or conservative views) and those that would normally be seen as left-of-centre (i.e., representing the less well-off, manufacturing and public-sector workers, etc.). It is precisely because different views on globalisation do not align closely with the traditional left / right divide that the dimensionality of the political landscape has increased.
This complicates the electoral process by leading to a greater fragmentation of the party system.
In Europe, given the role played by EU legislation in opening and liberalising markets, promoting labour market reforms that erode employment security, and facilitating intra-European free movement of capital and (crucially) labour, the populist response to concerns about globalisation has assumed a Eurosceptic tone – even where some of the main worries reflect the impact of extra-EU (rather than intra-EU) immigration.
In the Euro area, this has been further compounded by the consequences of the Euro crisis. In the stressed economies, the substantial economic cost of fiscal austerity, structural reform and macroeconomic adjustment is attributed to the Euro and the Brussels-inspired policies it implies. In the core countries (notably Germany), fears of the fiscal consequences of having to ‘bail out’ heavily-indebted stressed countries so as to maintain the integrity of the Euro area weigh. As a result, within the Euro area populist parties have raised questions about the viability and desirability of monetary union, at least as it operates at present.
Among other manifestations, the expression of populist Euroscepticism has taken concrete form in the rise of the Front National in France and the Alternative für Deutschland (AfD) in Germany (parties that would typically be seen as on the right of the traditional political spectrum); in the emergence of Podemos in Spain and Syriza in Greece (parties of the left); and the Five Star movement in Italy (a party that defies conventional left / right definitions, thereby validating the argument that a genuinely distinct political fissure has emerged). Outside the Euro area, the electoral success of UKIP, the Sweden Democrats and the Danish People’s Party – drawing on voters from both sides of the left / right spectrum – reflects the impact of the same underlying forces.
The emergence of this new dimension of political allegiance has had a powerful impact on electoral outcomes. When concerns about European issues dominate the agenda – as was the case during the Euro crisis – voters have focused on the distinction between mainstream parties, on the one hand, and populist Eurosceptic parties, on the other. Only if the relevance of European issues diminishes (e.g., if the Euro crisis recedes) and more traditional economic debates (about the role and size of the state) re-assert themselves, are we likely to see the conventional left / right divide again become the main driver of electoral dynamics.
Evolution of a new European politics
In previous work, we argued that – notwithstanding the very substantial economic and employment costs of implementing troika programmes and undertaking macroeconomic adjustment – a ‘silent majority’ existed in stressed peripheral economies that would ultimately elect a government that would accept the conditionality imposed to retain the Euro.
These countries have ageing populations. The ‘median voter’ along the mainstream / populist political dimension tends to be more concerned about the security of their retirement income (maintaining the value of what they have accumulated, through retaining the Euro) than the outlook for economic growth (which provides opportunities for the young).
When electoral decisions focus on European issues – as at the peak of the financial crisis, when membership of the Euro area was at stake in some countries – the distribution of political opinion again becomes essentially one-dimensional: left / right distinctions become second order; mainstream / populist distinction dominate. The logic of political competition discussed above leads to an electoral outcome reflecting the views of the median voter: in the end, mainstream parties gain a majority. The Euro is retained.
While this abstract story is obviously simplistic, it nevertheless provides a relevant insight. To take Greece as an example (on the basis that it is the country that came closest to exit from the Euro area in 2011-12), when push came to shove in the May 2012 general election, the longstanding and deep political enmity between the mainstream New Democracy (right) and Pasok (left) parties was overcome in order to form an (unprecedented) grand coalition sufficient to defeat the populist challenge posed by Syriza. The resulting government accepted the troika programme, membership of the Euro area was maintained and, over time, some stabilisation of the Greek economy has been achieved (even if substantial challenges clearly remain).
Using this experience as a template, populist challenges to the established order in other Euro area countries could be met with grand coalitions that serve to maintain orthodox, EU-endorsed policies and support market stability.
Δημήτρης Καμμένος
Υποψ. Βουλευτής Β’ Πειραιά
Αν. Ελλ. Πρωτοσελιδα – Ειδήσεις