EUROPE IN A TAIL SPIN – ANALYSIS
Rajeev Sharma
Eurasia Review
May 17 2012
The debt-ridden European continent is in a tail spin. Winds of change
are sweeping the world’s smallest but richest continent. Much of this
has to do with political changes through elections where economic
issues, rather than politics, terrorism, defence or foreign policy,
were the main deciding factors.
As governments from Ireland to Italy fell in the recent past in a
wave of anger over austerity, six European countries – France, Greece,
Germany, Serbia, Italy and Armenia – held elections on May 6, 2012.
The nature of elections ranged from presidential to parliamentary to
state-level to merely municipal. Here is a quick look at what happened
at these places.
Eurozone In France, Socialist challenger Francois Hollande defeated
incumbent Nicolas Sarkozy for the presidency by capitalizing on anger
over austerity measures. Sarkozy is expected to transfer power to
Hollande on May 14. In a nut shell, the ascendance of Hollande as the
new French president implies that the Socialist-ruled France will now
push for a more stimulus-minded approach to the financial crisis in
France and the rest of Europe.
In Greece, the electorate punished the two main parties in
parliamentary elections and Alexis Tsipras’s anti-austerity Syriza
group finished a shock second place. Tsipras said the mammoth rescue
plan should be renegotiated from scratch. The leader of the Left-wing
coalition pledged to form a government committed to tearing up the
terms of his country’s “barbaric” 130 billion euro bailout deal,
as political paralysis threatened to grip the country.
In Germany, Europe’s number one economic power, the Pirate Party,
which calls for copyright law to be radically reformed or abolished,
won a third victory in state elections when the party took 6 seats
with 8.2 per cent of the popular vote in the small Northern state of
Schleswig-Holstein. The result marks the third straight election win
for the Pirates, which have moved from fringe party to mainstream
movement in less than a year. The Pirates won four seats in state
elections in the Saarland in March and took 15 parliamentary seats
in Berlin’s state elections last year. The Pirates are expected to
do well in a fourth state parliament on May 13 when elections are
held in Germany’s most populous state, North-Rhein Westphalia.
In Serbia, opposition Progressive Party won a narrow victory in
elections as leaders battled over whether the Balkan country’s future
lies with the European Union or further east. The Progressive Party
of Tomislav Nikolic, who favors economic and political support from
Russia, took 24 percent of the vote and the Democrats of President
Boris Tadic, who won Serbia’s candidacy for European Union entry, had
22.09 percent. The decision on who will build a new Cabinet will be
made once Tadic and Nikolic face off in a May 20 presidential runoff.
The final poll result may affect Serbia’s relations with the European
Union (EU) as well as Kosovo.
In Italy, the grassroots Five Star movement of maverick Italian
comedian Beppe Grillo and Italy’s left made the biggest gains in local
polls when austerity-weary voters punished conservative ex-premier
Silvio Berlusconi’s party and its ally. The elections were held in
942 towns and cities and the biggest gainer was Grillo, who mocks
politicians and has called for Italy to leave the euro. This was
Italy’s first election since Premier Mario Monti was elected by the
Italians that he would save Italy from its debt crisis.
In Armenia, a political party loyal to President Serzh Sargsyan won
the most votes in a 131-seat parliamentary election, a result that
tracked closely with a pattern in other post-Soviet elections: the
parties in power tend to stay in power. The election was the first
since rioting broke out in Armenia four years ago to protest the
election of Sargsyan, Armenia’s third president since independence.
The Organization for Security and Cooperation in Europe criticized
that election as flawed.
Of all European states that went to polls on May 6, the French
presidential election is undoubtedly the most important and needs to
be discussed at length. The French have elected a Socialist for the
first time in 24 years. It also means that Sarkozy enters the history
books as only the second president, after Valery Giscard d’Estaing,
in 1981, to fail to win a re-election bid under the Fifth Republic.
The victory of Francois Hollande will have far-reaching and all-round
implications for the world in such diverse areas as Europe’s debt
crisis, the Afghanistan war, the Iran standoff and global diplomacy.
Probably what sealed Hollande’s victory and defeat of the present
incumbent Nicolas Sarkozy was his zany idea of levying a 75 percent
income tax for the “very rich” and his pledge to hike taxes on
companies that distribute profits to shareholders instead of investing
in their business.
In contrast, Sarkozy had pledged to reduce France’s overall tax burden,
already among the highest in the world, though he proposed higher
sales tax. Hollande’s unusual proposal triggered angry remarks by
netizens who said it would ensure that all the super-rich people of
France shift base to the United States along with their companies,
thus solving the US economic crisis in one go and pushing France
deeper into the economic morass. Hollande is expected to push for
a more stimulus-minded approach to the financial crisis in France
and the rest of Europe and reshape the debate in the 17-nation
Eurozone by resorting to more cost-cutting to bring down debts and
government-sponsored stimulus to revive growth.
Sarkozy’s defeat may have both immediate and long term political
implications for (i) France as it may trigger a succession battle
between the socialists and the far right; and (ii) the world as he
would undoubtedly be far less US-friendly than Sarkozy, the most
America-friendly French leader in a half-century. Sarkozy’s stout
support to Washington on Iran and Syria will be diluted by Hollande.
The new President may also reverse many other foreign policy decisions
taken by Sarkozy. He is likely to reduce France’s military presence
in Afghanistan (which was upped by Sarkozy) and bring back French
troops from Afghanistan. Hollande would also be inevitably pursuing
a hands-off approach by decreasing France’s military or diplomatic
muscle flexing abroad. Sarkozy routinely did this, the last example
being taking up a major role in NATO’s air campaign over Libya that
helped oust dictator Muammar Gaddafi.
The immediate task before Hollande would be to name a prime minister,
something that he consistently refused to do all through the election
campaign. He may name Jean-Marc Ayrault for the post not only because
he is an important leader of the Socialist parliamentary group but
also because he has good links to Germany. High on Hollande’s priority
would be to work closely with German Chancellor Angela Merkel who
supported his candidature.
So what do European election results denote? The results show that
extremist parties on both the far-Left and the far-Right are on
the rise, apparently exploiting the economic turmoil that has swept
across the entire Europe. The co-opting of extreme solutions to the
Muslim immigration issues also seems to be playing a part. The latest
political trend in Europe seems to be the far-Left and far-Right
empowerment which, as was the case in the wake of World War I,
seems less about extremist parties’ identification with their goals
and values and more to do with punishing mainstream candidates for
perceived mistakes.
(The writer is a New Delhi-based journalist-author and strategic
analyst.)
SAAG is the South Asia Analysis Group, a non-profit, non-commercial
think tank. The objective of SAAG is to advance strategic analysis and
contribute to the expansion of knowledge of Indian and International
security and promote public understanding.