The populist hurricane

Matyas Koppany // 12.10.2018

Over the last two years, the forces of populism have swept through Europe like a hurricane, wreaking havoc on the post-WW2 consensus, and ideals of international co-operation. After stopping by the British Isles on a late Summer day in 2016, the populist hurricane made it to the United States a mere four months later, before heading back across the Pond to the ‘City of Lights’ the following spring. In Brussels and Geneva, the political and financial elites have certainly had cause to spill their ‘flat whites’ down copies of the FT and The Economist.

Other affected countries include the Netherlands, where damage was mitigated; Denmark, Italy and Austria, where the forces of populism were more or less reined in. In Hungary and Poland, meanwhile, the hurricane has been roaming free despite the European Parliament (EP) invoking the so-called ‘article seven procedure’ in both cases to prevent further damage. Even the most experienced meteorologist would struggle to explain the patterns of this strange weather condition.

Following the upheavals of populism, public debate has shifted on several issues, including migration, free trade and the European project, towards a more conservative tone favouring nation states and national governments over inter- and supranational entities. With the EP elections in May 2019 drawing near, these shifts will affect the composition of the newly elected EP.

According to the 2017 Authoritarian Populism Index, compiled by our Swedish member think tank Timbro, “Authoritarian-Populism has overtaken Liberalism and established itself as the third ideological force in European politics.“

After analysing voting patterns and electoral data between 1980 and 2017, Timbro’s researchers found that support for ‘anti-establishment’ parties across Europe (including right and left-wing groups) has peaked in the last two years, with around a fifth of the electorate, on average, casting their ballots along such lines.

If these trends continue, the balance between pro-EU and eurosceptic voices in the EP  is likely to shift in favour of the latter. As such voices echo louder within the chamber of MEPs representing the European citizenry at large their growing influence is set to steer the European project on a more nation-states favoured path, refusing to delegate more sovereignty to EU institutions and preferring inter-governmental co-operation instead.

Underlying populist ideology is a sense of antagonism between two perceived groups; the homogeneous, unified ‘people’ and a corrupt ruling ‘elite’. On the supranational level this ‘elite’ is usually the EU bureaucracy, viewed as a bloated mass of overpaid bureaucrats working in the EU bubble, cordoned off from the issues concerning ordinary people; or other international forums, like the United Nations and NATO. Behind this resentment is the disdain of supranational entities calling national governments to account over freedom of press, rule of law or migration policies and areas, where previously the government enjoyed full authority.

Populist parties on the right have correctly identified migration as a serious challenge facing the EU, but the solutions they propose are isolationist and sometimes outright xenophobic. They miss the huge opportunities migration from third countries often brings. The same logic applies to the idea of big businesses’ exploitation of the people, as a strictly regulated environment favouring local businesses not only discourages innovation but also deprives the economy of further foreign investment.

Populism is here to stay, it seems. Though there are no easy solutions to these growing trends, policy makers might start by addressing particularly concerning issues like rising youth unemployment. Since young voters are more susceptible to anti-establishment rhetoric and in general have lower levels of trust in institutions they already make up a significant share of supporters of populist parties and policies. This, coupled with low youth employment levels and restrictive regulations for new labour market entry and you have a recipe for ideological disaster.

Employment regulations intended to protect certain groups often have reverse consequences and result in disadvantaged groups, like young adults, losing out. There is a strong case for the devaluation of regulation and integral reforms to the large body of existing employment regulation, by easing access to jobs, would give younger voters a renewed sense of stability.

As populist parties offer oversimplified answers to complex issues they might be able to rally support for their policies and gain influence, but in the long-run their proposed solutions – the likes of expanding state control over the judiciary or proposing legislation barring organisations in the civil sphere – are set to have damaging effects on the rule of law and public trust in institutions while also deepening existing divisions within society without providing functioning alternatives.

The opinions expressed in this article belong to the author only, not EPICENTER or its members. 

EPICENTER publications and contributions from our member think tanks are designed to promote the discussion of economic issues and the role of markets in solving economic and social problems. As with all EPICENTER publications, the views expressed here are those of the author and not EPICENTER or its member think tanks (which have no corporate view).