The Political Aftershocks of Europe's Economic Crisis Continue
May 22, 2015
Europe’s political center—left and right—is in the process of collapsing, making way for far more radical and populist parties on the extremes of the political spectrum. This collapse has been most evident in southern Europe, where five years of economic hardship and high unemployment have taken a dramatic toll. In many countries, unemployment remains high, and popular frustration over chronic economic malaise contributed to the victory of the far-left Syriza party in snap Greek elections on January 25. Similar results are expected in Spain, which will hold a series of elections—including a general election—before the end of the year. But the erosion of the political center is not limited to those countries suffering from chronic economic malaise, as evidenced by the harrowing blow dealt to the British Labour and Liberal Democratic parties in UK parliamentary elections on May 7.
There are several forces contributing to this collapse. Above all, the policies that have been promoted by Europe’s political elite have been completely discredited. For more than two decades, the European Union has steadily expanded its institutions, enlarged its membership, and redistributed Europe’s wealth. But following the first Greek bailout package in 2010, EU institutional development and integration was abruptly arrested with the exception of crisis-related financial institution building. The decades-old “prosperity union” that spread wealth amongst its membership transformed almost overnight into an “austerity union” characterized by vastly different political dynamics. Europe’s elite on the right and left of the political spectrum are equally faulted for their country’s current economic predicaments, further driving disgruntled voters to search for something politically new. Regardless of a government’s political orientation or a country’s election calendar, distressed euro zone members were required to implement severe austerity measures in return for European bailout funds. This vicious cycle has driven the electorate to search for more extreme political alternatives. Public resentment of politicians has also been fed by a growing number of corruption scandals, which have discredited leaders and served to reinforce the belief that they are acting in their own interests at the expense of their austerity-stricken constituents.
There is also a generational element to Europe’s political collapse with the sudden rise of very new and more extreme parties. As youth unemployment rates in some countries are twice as high as the national rate (in Greece it is 50.6 percent and in Spain 50.9 percent), it is unsurprising that emerging political leaders are in their late 30s and early 40s. Young voters across Europe are migrating to these relatable leaders and their more extreme views in a dramatic break with their parents’ political generation. These parties are adept at utilizing social media, which has helped them to easily generate momentum at the grass-roots level. Yet they also lack the historical memory and exhaustion of the two World Wars and the Cold War, limiting their enthusiasm for European integration and the institutions designed to preserve peace.
But one common theme confronts all of Europe’s leaders today, from Berlin to Athens: how to maintain global competitiveness without altering the long-held social welfare and labor compact between state and citizens. The greatest struggle for European leaders will be to decide whether it is better to seek greater economic competitiveness through bold (and painful) structural reform or to attempt more radical experiments in economic and social policies, which will likely exacerbate xenophobic and nationalistic tensions.
All of these trends can be observed in Spain, where they have produced a major tectonic shift in the country’s political landscape. As Spain prepares for a series of votes in 2015 (including the Catalan regional election on September 27 and a nation-wide parliamentary vote before December 20), its two historically dominant parties have seen their support base splinter. The center-right Popular Party (PP) and the center-left Socialists (PSOE)—which traditionally claim between 75 and 80 percent of national support together—are currently polling at less than 50 percent jointly. Two newcomers have challenged their political dominance: the antiestablishment, left-wing Podemos Party (meaning, “We can”) and the centrist, Catalonia-based Citizen’s Party (Ciudadanos). Nationally, polls suggest that the country now evenly divides between these four parties: according to a recent poll, the Popular Party maintains a narrow lead with around 23 percent, but PSOE is just behind with 21.8 percent. Podemos and Ciudadanos are vying for third with 18.2 and 18.5 percent respectively.
Podemos, just formed in 2014, has ridden to prominence on a wave of widespread disillusionment over political corruption, marketing itself as a radical break with the past and advocating for the total reform of Spain’s political system. Comparisons have been drawn between Podemos leader Pablo Iglesias and Greek prime minister Alexis Tsipras as young and new voices for change, and the two leaders campaigned together in the run-up to the Greek election in January. However, as the Tsipras government has proven unsuccessful in significantly improving Greece’s relationship with its creditors, and in the process done significant damage to its economic prospects, public enthusiasm for Podemos has begun to wane as the party maintains a similar platform. But while Podemos has adopted a more radical stance and drawn political energy away from a diminished PSOE, Ciudadanos is pursuing a less-aggressive, socially liberal yet fiscally conservative agenda that blames Spain’s corrupt politicians for the country’s problems rather than the system itself, which is biting into the ruling PP’s electoral market share.
The real test of Spain’s political fragmentation will occur this Sunday (May 24) when 13 of Spain’s 17 autonomous provinces and over 8,000 municipalities will hold elections. Polls suggest that the Popular Party and PSOE will struggle to achieve outright victories in many provinces and that both will suffer significant losses to the newcomers. In the autonomous community of Madrid, for example, the Popular Party is polling at 34.7 percent, whereas in 2011 it claimed 51.7 percent of the vote. PSOE is polling at 20 percent of the vote, down from 26.3 percent during the last election cycle. Ciudadanos has seen support surge from a mere 0.2 percent in 2011 to 16.3 percent today. Podemos currently is polling at 17.3 percent.
Perhaps the most important political signal that will emerge from Sunday’s elections is how Ciudadanos and Podemos will compete with one another to become the alternative to the political establishment. Political momentum is clearly behind Ciudadanos as public support climbed from around 10 percent in January to 18.4 percent in March. This surge corresponded with a decline in support for Podemos over the same period, which had previously peaked at 28 percent support nationwide (a development likely corresponding to the poor performance of the Syriza government in Greece). Ciudadanos is also unique given its political origins in Catalonia, a region that will hold early elections on September 27 equating to a nonbinding independence referendum. Ciudadanos is firmly opposed to independence, and its support in Catalonia has nearly doubled to 18 percent according to a March 2015 poll. Should Ciudadanos continue its rise to national prominence, it could help mitigate not only the future prospect of Catalan independence but also potential economic disruption in one of Spain’s wealthiest regions.
Perhaps the most interesting message from this series of Spanish elections is the limited political impact of its economic recovery. The government recently announced that it expects national GDP growth to exceed expectations by 0.9 percent (bringing the annual rate to 2.9 percent) in 2015 and that this success will translate to the creation of 500,000 jobs this year, although Spain’s unemployment remains extremely high at 23 percent. But the economic successes boasted by Prime Minister Mariano Rajoy have been largely overshadowed by PP’s ongoing corruption allegations and a growing urge to support new political forces in the country.
The political aftershocks of Europe’s economic crisis continue to be felt, and their magnitude may become greater than the economic shock itself.
Heather A. Conley is senior vice president for Europe, Eurasia, and the Arctic and director of the Europe Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C.
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