An AFD campaign poster in Germany
Laure Mandeville

-Analysis-

PARIS — A wave of popular revolt against the establishment, globalization and immigration is washing over the West. And as the recent election results in Germany, Austria and the Czech Republic suggest, it won't be ending anytime soon.

After the staggering victories of Brexit and Donald Trump in 2016, Western elites, always eager for good news, were quick to see Emmanuel Macron's victory against Marine Le Pen in the French presidential election as a sign that the populist wave was waning. In doing so, they chose to forget that the cumulated scores of two anti-establishment candidates, Le Pen on the far right and Jean-Luc Mélenchon on the far left, surpassed 43%, a stubborn reality that showed that Macron, himself a symbol of the elite but determined to revolutionize the entire political system, had only diverted the revolt.

The fact that the Dutch anti-immigration movement, led by Geert Wilders, did more poorly than expected in March, finishing second in the Netherlands' general election, was also perceived as a sign of that decline, as was Norbert Hoffer's very narrow defeat in Austria's presidential election. As a result, newspapers were quick to announce that the "brakes' had been put on European "populism," a vague and catch-all term that is now used to describe any kind of popular discontent.

Brexit was interpreted as a new treachery by the Perfidious Albion, which never wanted to be a part of Europe, rather than the product of a deep and emerging identity revolt. The same prism colored the analyses of the 2016 U.S. election. Democrats continue to see "Hurricane Trump" as the illegitimate coup-de-force of a single man, without realizing that it is a case of not seeing the forest (a Trumpian revolt, alive and kicking) for the tree that is Trump.

"The reality is that the wave sweeping over the West, far from being a mild fever, is the sign of a changing world," says Joshua Mitchell, professor of political theory in the Department of Government at Georgetown University.

Obvious signs of dissent

Mitchell worries that in Europe, this revolt could morph into a "form of ethnic nationalism." Preventing that requires an answer. But what answer? That is the question undermining the continent.

The question is all the more imperative in light of recent electoral results. In Germany, the far-right Alternative für Deutschland (AfD) party became the third largest party in the German Bundestag with 13%. The country was long seen as being "protected" from rightist rebellion because of its Nazi past. But now even Germany is susceptible to identity rebellion, which gained ground with the influx of migrants in 2015 and Angela Merkel's imprudent choice to keep the borders wide open.

The big winner in Austria's recent elections, held early last month, was the young leader of the Conservative party, Sebastian Kurz, who successfully attracted voters from the far-right FPÖ party by capitalizing on their anti-immigration slogans. The FPÖ itself got 26% of the votes and could join the Conservatives in a coalition government. And in the Czech Republic, billionaire Andrej Babis won the parliamentary election in a landslide by portraying himself as an anti-establishment entrepreneur who'd be able to fight against corruption and "orders' from Brussels regarding the issue of refugees.

Anti-immigration movements are even doing well in traditionally welcoming countries such as Sweden and Denmark. "The populist wave is far from over," says Ruth Wodak, professor at the University of Vienna. "The far-right agenda is actually being picked up by traditional parties."

Western observers highlight the similarities between the populist fit of anger in the Czech Republic and the Hungarian and Polish cases. From Viktor Orban's Hungary to Poland's Law and Justice party (PiS), a "rebellion" among the Visegrad Four is rising against Brussels, stimulated by the fear of multiculturalism and a form of disaffection regarding democracy.

Viktor Orban last month in Brussels — Photo: EPP

Wodak isn't surprised. "In these countries, as well as in the former East Germany, which voted massively for the AfD, there's been no effort to look back at Nazi totalitarianism, so the people there are more inclined to nationalism," she explains. Still, the professor says it would be misleading to conclude that the new schism will be East vs. West.

Threading the needle

In reality, the wave of anger transcends geographical divides. In both Eastern and Western Europe, there is a growing vertical divide with liberal elites on one side, and the popular- and middle-classes on the other. The theme of "two countries," one of globalized urban centers, the other of "peripheral" or "forgotten" areas — a line of thinking that dominated the American election — is omnipresent.

Everywhere, the popular classes feel a "cultural insecurity," as the French geographer Christophe Guilluy puts it. They react by demanding reinforced borders. And everywhere, they lament the "powerlessness' of their respective governments.

Until now, the reaction of the European elites consisted mostly of demonizing the "populists' and portraying anyone who questions the open-border principle a part of a dangerous "nativist drift." But that ended up playing into the hands of the far-right by giving it a virtual monopoly on all things related to national identity. With that in mind, the elites are finally showing signs of taking these shifting sentiments a bit more seriously.

"The European Union is turning into something of a political science laboratory these days, with each country offering varying experiments and test cases in how to handle a resurgence of populism," Benjamin Haddad recently wrote in The American Interest.

France's Emmanuel Macron, for example, decided to formulate a liberal and pro-European policy while at the same time toughening his stance on immigration and security. But there are risks in such an approach, Haddad explained. "By bringing the center-left and center-right together, it leaves the extremes as the only true opposition."

Another approach, embodied by Austria's Sebastian Kurz, consists in trying to address the far-right's concerns more directly while rejecting racism and open Euro-skepticism. "So far, Kurz has been able to thread the needle, emerging as a strong voice against the EU's refugee policy while offering proposals that are a far cry from hardline demands to revert back to national borders and abandon the Schengen Area," Haddad writes.

The approach doesn't reassure Ruth Wodak, who sees in Kurz a "dangerous' alignment with the far-right's rhetoric. Haddad admits that the young Austrian chancellor "walks a fine line" and that there's a real risk in "trying to seize some of the populist agenda," as Britain's David Cameron experienced himself when, in an attempt to marginalize the anti-EU, anti-immigration party UKIP, he ended up provoking the Brexit.

Still, in this time of extreme divides, offering voters some kind of middle ground is becoming a political imperative. Either that, or people are left choosing between open borders, on the one hand, and the far-right on the other. And that, quite frankly, is a recipe for disaster.

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Economy

European Debt? The First Question For Merkel's Successor

Across southern Europe, all eyes are on the German elections, as they hope a change of government might bring about reforms to the EU Stability Pact.

Angela Merkel at a campaign event of CDU party, Stralsund, Sep 2021

Tobias Kaiser, Virginia Kirst, Martina Meister


-Analysis-

BERLIN — Finance Minister Olaf Scholz (SPD) is the front-runner, according to recent polls, to become Germany's next chancellor. Little wonder then that he's attracting attention not just within the country, but from neighbors across Europe who are watching and listening to his every word.

That was certainly the case this past weekend in Brdo, Slovenia, where the minister met with his European counterparts. And of particular interest for those in attendance is where Scholz stands on the issue of debt-rule reform for the eurozone, a subject that is expected to be hotly debated among EU members in the coming months.

France, which holds its own elections early next year, has already made its position clear. "When it comes to the Stability and Growth Pact, we need new rules," said Bruno Le Maire, France's minister of the economy and finance, at the meeting in Slovenia. "We need simpler rules that take the economic reality into account. That is what France will be arguing for in the coming weeks."

The economic reality for eurozone countries is an average national debt of 100% of GDP. Only Luxemburg is currently meeting the two central requirements of the Maastricht Treaty: That national debt must be less than 60% of GDP and the deficit should be no more than 3%. For the moment, these rules have been set aside due to the coronavirus crisis, but next year national leaders must decide how to go forward and whether the rules should be reinstated in 2023.

Europe's north-south divide lives on

The debate looks set to be intense. Fiscally conservative countries, above all Austria and the Netherlands, are against relaxing the rules as they recently made very clear in a joint position paper on the subject. In contrast, southern European countries that are dealing with high levels of national debt believe that now is the moment to relax the rules.

Those governments are calling for countries to be given more freedom over their levels of national debt so that the economy, which is recovering remarkably quickly thanks to coronavirus spending and the European Central Bank's relaxation of its fiscal policy, can continue to grow.

Despite its clear stance on the issue, Paris hasn't yet gone on the offensive.

The rules must be "adapted to fit the new reality," said Spanish Finance Minister Nadia Calviño in Brdo. She says the eurozone needs "new rules that work." Her Belgian counterpart agreed. The national debts in both countries currently stand at over 100% of GDP. The same is true of France, Italy, Portugal, Greece and Cyprus.

Officials there will be keeping a close eye on the German elections — and the subsequent coalition negotiations. Along with France, Germany still sets the tone in the EU, and Berlin's stance on the brewing conflict will depend largely on what the coalition government looks like.

A key question is which party Germany's next finance minister comes from. In their election campaign, the Greens have called for the debt rules to be revised so that in the future they support rather than hinder public investment. The FDP, however, wants to reinstate the Maastricht Treaty rules exactly as they were and ensure they are more strictly enforced than before.

This demand is unlikely to gain traction at the EU level because too many countries would still be breaking the rules for years to come. There is already a consensus that they should be reformed; what is still at stake is how far these reforms should go.

Mario Draghi on stage in Bologna

Prime Minister Mario Draghi at an event in Bologna, Italy — Photo: Brancolini/ROPI/ZUMA

Time for Draghi to step up?

Despite its clear stance on the issue, Paris hasn't yet gone on the offensive. That having been said, starting in January, France will take over the presidency of the EU Council for a period that will coincide with its presidential election campaign. And it's likely that Macron's main rival, right-wing populist Marine Le Pen, will put the reforms front and center, especially since she has long argued against Germany and in favor of more freedom.

Rome is putting its faith in the negotiating skills of Prime Minister Mario Draghi, a former head of the European Central Bank. Draghi is a respected EU finance expert at the debating table and can be of great service to Italy precisely at a moment when Merkel's departure may see Germany represented by a politician with less experience at these kinds of drawn-out summits, where discussions go on long into the night.

The Stability and Growth pact may survive unscathed.

Regardless of how heated the debates turn out to be, the Stability and Growth Pact may well survive the conflict unscathed, as its symbolic value may make revising the agreement itself practically impossible. Instead, the aim will be to rewrite the rules that govern how the Pact should be interpreted: regulations, in other words, about how the deficit and national debt should be calculated.

One possible change would be to allow future borrowing for environmental investments to be discounted. France is not alone in calling for that. European Commissioner for Economy Paolo Gentiloni has also added his voice.

The European Commission is assuming that the debate may drag on for some time. The rules — set aside during the pandemic — are supposed to come into force again at the start of 2023.

The Commission is already preparing for the possibility that they could be reactivated without any reforms. They are investigating how the flexibility that has already been built into the debt laws could be used to ensure that a large swathe of eurozone countries don't automatically find themselves contravening them, representatives explained.

The Commission will present its recommendations for reforms, which will serve as a basis for the countries' negotiations, in December. By that point, the results of the German elections will be known, as well as possibly the coalition negotiations. And we might have a clearer idea of how intense the fight over Europe's debt rules could become — and whether the hopes of the southern countries could become reality.

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