Europe is facing a number of challenges and will encounter a number of key tests shortly. Populist parties, mainly of the Eurosceptic right, are taking support away from the mainstream political parties, and the electorate in Italy and Austria vote today in a referendum on constitutional reform and a presidential election respectively. Next year there are important elections in France, the Netherlands and Germany.
All these polls will have a significant impact on both the EU and the eurozone. It is no exaggeration to say that Europe and its values are under threat and that the single currency, at least in its present format, is particularly vulnerable. The EU, which is without doubt a huge success story and which has presided over peace, stability and economic progress ever since its formation, will nevertheless have to change, as well as become more self-confident, in order to survive.
Let’s put the various elections in perspective. Today’s presidential contest in Austria could see the election of Europe’s first head of State (not government) who comes from a far-right political party, namely Norbert Hofer, the candidate of the Freedom Party. He faces Alexander Van der Bellen, a Green politician who is running as an independent, and who narrowly defeated him in a previous poll in May, which however was later annulled due to some irregularities.
The election of Hofer would be awkward for the EU and somewhat embarrassing for Austria. However, it is also true that the Freedom Party – which forms part of government coalitions in two of Austria’s nine provinces – is regarded by many Austrian voters as part of mainstream Austrian politics. The fact remains, nevertheless, that Austria’s presidency is a mainly ceremonial post with limited powers. It is the Chancellor, backed by a parliamentary majority, who is the head of the government.
The worst case scenario would be a victory for Hofer, followed by the new President dissolving Parliament (this is one of the few powers he has) and the Freedom Party coming first in a new parliamentary election. Even if this had to happen, the Freedom Party would have to find a coalition partner, and would be unable to govern on its own. It is worth noting that the Freedom Party says it is in favour of staying in both the EU and the eurozone – although it says it wants to reform the EU, and it has toyed with the idea of a ‘hard euro’ and a ‘soft euro’. What we can definitely expect in the event of a Freedom Party-led coalition would be an Austrian government taking a much stronger stand on immigration, and this will no doubt have an influence on the EU.
Today’s referendum in Italy on reforming the Senate is expected to result in a ‘No’ vote. Unfortunately, Prime Minister Matteo Renzi made the huge mistake of linking the vote to his political survival by saying he would resign if voters did not approve the reform. This only acted as an incentive for his political opponents, all across the political spectrum, to urge voters to reject Renzi’s proposal.
The potential damage to the EU of a ‘No’ vote in Italy is far greater than the Austrian election. If Renzi resigns, the probable outcome will be the appointment of a new Prime Minister who might recommend early elections next year. This could result in the Opposition populist Five Star Movement getting an overall majority of seats, thanks to the country’s new electoral system, either by winning 40 per cent of votes in a first round or by beating Renzi’s Democratic Party in a second round of voting.
Even if Le Pen is elected President she would then have to win a majority in the country’s parliamentary elections
While the Five Star Movement is in favour of Italy’s membership of the EU, it is not in favour of the euro, and pledged a referendum on whether the country should remain in the single currency. The euro has never been popular in Italy among consumers and it is likely that should a referendum be held, voters would choose to ditch the currency. This would have huge implications for the survival of the eurozone and could lead to other countries opting out, perhaps resulting in a core group of dedicated eurozone members.
Before we conclude, however, that a Five Star victory is inevitable in the event of an early election it must be noted that the party is sharply divided between its left- and right-wing factions and has so far had mixed results in the cities it controls. Furthermore, it needs to be stressed that Italians remain largely pro-European (but not pro-single currency) and the support for Five Star is not a protest vote against the EU but against the mainstream parties’ failure to tackle corruption and create jobs. It is no different from when Silvio Berlusconi’s Forza Italia was set up in 1994 as the Christian Democrats crumbled.
Parliamentary elections will be held in The Netherlands in March and the far-right anti-immigration Party for Freedom, led by Geert Wilders, is leading in the polls. However, even if this party does get the largest number of votes and seats it will struggle to find a coalition partner and could well end up once again in Opposition. Wilders is anti-EU and has promised an EU referendum should he win the elections. His is running largely on an anti-Islam and anti-immigrant platform, which has struck a chord with a large section of the electorate, and this could well result in some of the centrist parties adopting a tougher stance on migration and thus stealing some of his clothes.
The French presidential election in April, and the run-off poll in May, will be the most watched election in Europe. This is because France, a hugely important member of the EU, as well as a founding member of the bloc which has contributed so much to Europe, could possibly elect Marine Le Pen, of the far-right National Front, as President.
However, there have been interesting developments this last week. Socialist President François Hollande, who is deeply unpopular, announced last Thursday that he will not seek re-election, paving the way for his Prime Minister, Manuel Valls, to be the party’s likely candidate. Prior to Mr Hollande’s withdrawal from the race the centre-right Republican Party – in a surprise move – chose former prime minister François Fillon as its presidential candidate. Fillon has managed to energise his party and stands a good chance of winning the election next year.
The French Socialists face an uphill struggle to get through to the run-off election. Mr Valls would have to defend Mr Hollande’s poor economic record, and to make matters worse, a former Socialist Economy Minister, Emmanuel Macron, set up a new centrist political party, En Marche! (Let’s Move!), and is contesting the election. Of course, if either Mr Valls or Mr Macron had to make it to the second poll, along with Mr Fillon, that would be excellent news, but I’m not too optimistic about that.
If Ms Le Pen makes it to the second round of voting and actually wins the election the potential implications are huge for both France and Europe. Besides her rigid migration and security policy (which I think will now be largely adopted by the mainstream candidates but with an emphasis on the rule of law and social justice ) her trade policy is very protectionist, she is not in favour of the euro and wants to hold a referendum on France’s membership of the EU.
Having said that, few analysts have highlighted the fact that even if Le Pen is elected, she would then have to win a majority in the country’s parliamentary elections that will follow the presidential poll, and that would be a different contest altogether. Without a majority in Parliament she would have to appoint a prime minister from another party and would, in effect, be a lame duck President. Yes, she would have some leeway in foreign policy (and to a certain extent EU policy), but the result would be a cohabitation between Le Pen and her Prime Minister.
I will write about Germany’s parliamentary elections, which are to be held in September, on another occasion, but I will just say this: Angela Merkel certainly has her faults but she has proven to be a very courageous woman who is unwavering in her support for solid European values. It is true that the populist Alternative for Germany party is taking votes away from all the mainstream parties, but I very much doubt it will be able to find a coalition partner if it had to do particularly well in the election. September is a long way off, and we’ll see how things develop.
In all these elections it is imperative that the pro-European parties do not shy away from stressing the many positive achievements of the EU while at the same time addressing the very valid concerns that many citizens have, such as a lack of jobs, security and migration. At a time when the EU has to deal with Brexit, a Trump presidency and an assertive Russia, the bloc needs to be bold, united and confident, and should not adopt a defeatist attitude.