New Study: Economic Crisis Shifts Voters To Political Right

A study recently released in Germany demonstrates that right-wing parties win on average 30% more votes after a financial crisis. The success of France's Marine Le Pen is just the latest example.

At a Golden Dawn rally in Athens last September.
At a Golden Dawn rally in Athens last September.
Bastian Brinkmann

MUNICH â€" In September 2013, right in the middle of Greece"s financial crisis, rapper Killah P was murdered, stabbed to death. He was watching a soccer game with friends at a coffeehouse when Greek neo-Nazis gathered to confront him. Later a member of the populist far-right Golden Dawn party was arrested for the crime.

Ever since the economic free-fall in Greece, people have been turning to neo-Nazi groups. Before the crisis hit the country, Golden Dawn received no more more than 0.3% of the vote, but since the crisis the number has gone up to about 7%.

Though the situation is terrifying, it is hardly new, with evidence going back in many countries for more than 140 years: After financial crises, right-wing parties get approximately 30% more votes in elections than they did previously. This has been demonstrated by an economic study of 800 elections in 20 countries, the results of which were released by Munich's Ifo Institute for Economic Research.

If a country's banks suffer, the consequences on society are dramatic. Institutes close agencies, declare bankruptcy or require the state to save them. After that, fewer credits are given to manufacturers and clients, less merchandise is produced and sold, people lose their jobs, unemployment rises. The new study shows that financial crises also put pressure on the democratic system and create political chaos.

For example: street violence. Anti-government demonstrations and violent confrontations increase after a financial crisis â€" and the government feels this during elections. Since World War II, governing parties have lost up to 4% during elections that follow such crises. It is common for the opposition to win and for legislative bodies to become fragmented.

Those evolutions may make a country a lot more difficult to govern, in part because the government has a harder time easing the consequences of the crisis for citizens and enacting reforms that are meant to help avoid the next one.

In this past Sunday's first round of regional elections in France, the success of the right-wing National Front party â€" led by Marine Le Pen â€" comes as the country remains mired in a record period of high unemployment.

Lingering effects

Between the two world wars, this was mainly seen in Germany and Italy. It's alarming that after 1945, right-wing parties in many countries have enjoyed considerable success â€" not just right-wing populists but neo-Nazi parties too.

Left-wing radical groups, on the other hand, haven't recorded increases in political support. Greek's left wing Syriza party, which evolved from a small opposition group into a ruling party, remains the exception to the rule.

The study's authors have concluded that governments and central banks carry a lot of responsibility for political stability when watching over financials markets. In other words, avoiding financial crises reduces the likelihood of a political disaster.

The good news is that political turbulence does eventually fade. But it takes some time. According to the study, five years after a crisis breaks out, right-wing parties are generally at the height of power, but after that the extremists lose favor. Eight years later, their influence is no longer measurable.

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Iran-Saudi Arabia Rivalry May Be Set To Ease, Or Get Much Worse

The Saudis may be awaiting the outcome of Iran's nuclear talks with the West, to see whether Tehran will moderate its regional policies, or lash out like never before.

Military parade in Tehran, Iran, on Oct. 3


LONDON — The Iranian Foreign Ministry spokesman Saeed Khatibzadeh said earlier this month that Iranian and Saudi negotiators had so far had four rounds of "continuous" talks, though both sides had agreed to keep them private. The talks are to ease fraught relations between Iran's radical Shia regime and the Saudi kingdom, a key Western ally in the Middle East.

Iran's Foreign Minister Hossein Amirabdollahian has said that the talks were going in the right direction, while an Iranian trade official was recently hopeful these might even allow trade opportunities for Iranian businessmen in Saudi Arabia. As the broadcaster France 24 observed separately, it will take more than positive signals to heal a five-year-rift and decades of mutual suspicions.

Agence France-Presse news agency, meanwhile, has cited an unnamed French diplomat as saying that Saudi Arabia wants to end its costly discord with Tehran. The sides may already have agreed to reopen consular offices. For Saudi Arabia, the costs include its war on Iran-backed Houthis rebels fighting an UN-recognized government in next-door Yemen.

The role of the nuclear pact

Bilateral relations were severed in January 2016, after regime militiamen stormed the Saudi embassy in Tehran. Amirabdollahian was then the deputy foreign minister for Arab affairs. In 2019, he told the website Iranian Diplomacy that Saudi Arabia had taken measures vis-a-vis Iran's nuclear pact with the world powers.

It's unlikely Ali Khamenei will tolerate the Saudi kingdom's rising power in the region.

He said "the Saudis' insane conduct toward [the pact] led them to conclude that they must prevent [its implementation] in a peaceful environment ... I think the Saudis are quite deluded, and their delusion consists in thinking that Trump is an opportunity for them to place themselves on the path of conflict with the Islamic Republic while relying on Trump." He meant the administration led by the U.S. President Donald J.Trump, which was hostile to Iran's regime. This, he said, "is not how we view Saudi Arabia. I think Yemen should have been a big lesson for the Saudis."

The minister was effectively admitting the Houthis were the Islamic Republic's tool for getting back at Saudi Arabia.

Yet in the past two years, both sides have taken steps to improve relations, without firm results as yet. Nor is the situation likely to change this time.

Photo of Iranian Supreme Leader Ali Khamenei in 2020

Iranian Supreme Leader Ali Khamenei in 2020

Riyadh's warming relations with Israel

Iran's former ambassador in Lebanon, Ahmad Dastmalchian, told the ILNA news agency in Tehran that Saudi Arabia is doing Israel's bidding in the region, and has "entrusted its national security, and life and death to Tel Aviv." Riyadh, he said, had been financing a good many "security and political projects in the region," or acting as a "logistical supplier."

The United States, said Dastmalchian, has "in turn tried to provide intelligence and security backing, while Israel has simply followed its own interests in all this."

Furthermore, it seems unlikely Iran's Supreme Leader Ali Khamenei will tolerate, even in this weak period of his leadership, the kingdom's rising power in the region and beyond, and especially its financial clout. He is usually disparaging when he speaks of Riyadh's princely rulers. In 2017, he compared them to "dairy cows," saying, "the idiots think that by giving money and aid, they can attract the goodwill of Islam's enemies."

Iranian regime officials are hopeful of moving toward better diplomatic ties and a reopening of embassies. Yet the balance of power between the sides began to change in Riyadh's favor years ago. For the kingdom's power has shifted from relying mostly on arms, to economic and political clout. The countries might have had peaceful relations before in considerably quieter, and more equitable, conditions than today's acute clash of interests.

For if nuclear talks break down, Iran's regime may become more aggressive.

Beyond this, the Abraham Accord or reconciliation of Arab states and Israel has been possible thanks to the green light that the Saudis gave their regional partners, and it is a considerable political and ideological defeat for the Islamic Republic.

Assuming all Houthis follow Tehran's instructions — and they may not — improved ties may curb attacks on Saudi interests and aid its economy. Tehran will also benefit from no longer having to support them. Unlike Iran's regime, the Saudis are not pressed for cash or resources and could even offer the Houthis a better deal. Presently, they may consider it more convenient to keep the softer approach toward Tehran.

For if nuclear talks with the West break down, Iran's regime may become more aggressive, and as experience has shown, tensions often prompt a renewal of missile or drone attacks on the Saudis, on tankers and on foreign shipping. Riyadh must have a way of keeping the Tehran regime quiet, in a distinctly unquiet time.

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