Political Cowardice Wrecking Europe’s New Right

In 2010, a new right rose in Europe. Parties that were or had become economically conservative and socially liberal came to power despite the left blaming their free-market ideology for the financial crisis. Now, the tides are turning.

Denmark’s Christian Democrats and liberals were ousted in September of last year after a decade in government and replaced by a left-wing administration.

Theirs had been a minority government, supported in parliament by the far-right and nationalist Danish People’s Party which parted with other two right-wing parties on entitlement and labor market reforms. By positioning itself as the champion of pensioners and the working class, the People’s Party appealed to a constituency which increasingly mistrusted the typically pro-European and pro-globalization conservatives and liberals.

In the Netherlands, a similar administration took office in September 2010. The liberal party had won the elections on a platform of economic repair and formed a minority cabinet with the Christian Democrats who had lost half of their seats, many of them to Geert Wilders’ Freedom Party, ideologically equivalent to the Danish People’s Party.

Wilders supported the conservative-liberal coalition in parliament until this weekend when he rejected additional austerity measures.

The government had initially planned only the barest possible of spending cuts but was forced to consider steeper reductions to bring the deficit under 3 percent of gross domestic product in 2013 per European treaty rules. Now, it may have lost the legitimacy and the majority to do so.

Prime Minister Petr Nečas’s center-right government of the Czech Republic is also aiming to balance the budget by reining in health-care and pension spending and raising taxes but it too could lose the support of one of its coalition partners, raising the possibility of parliamentary elections as early as June.

Like their Dutch counterparts, the Czech right-wing parties never made the philosophical argument for smaller government. The left-wing opposition, rallying with trade unions in the streets against “devastating” cuts and “asocial reforms,” is winning the public debate.

The godfather of Europe’s new right-wing movement, David Cameron, remains fairly popular in the polls despite enacting policies that are similar to his beleaguered counterparts on the continent. His “detoxification” of the Conservative Party brand of one that cares only for the rich hasn’t stopped the Labour opposition from credibly arguing that his government doesn’t care for the little guy though. It is only because of Labour’s ineffectual leader Ed Miliband that the party hasn’t managed to mount a more convincing stand against British austerity.

Cameron’s position is far from enviable however. His lackluster austerity agenda has failed to wield significant results. The British economy remains in recession but the political and public resistance to further budget restraint is so high that it’s probably too late now for the coalition to change its tone and argue that it’s shrinking government for anything but pragmatic reasons.

Margaret Thatcher didn’t win three elections telling voters that she didn’t have a choice but to enact unpopular austerity measures. She convinced them that it was the right thing to do.

When times are tough, people will be inclined to vote for the party that seems to them capable of managing the nation’s finances. As soon as a crisis is averted, which many left-wing parties seem to believe is the case, the political managers lose their appeal. People don’t just care for policy. They crave for a politics of vision.

Austerity is not an ideology. It is a means to an end but when the end is left unsaid, who but a masochist would vote for it? The left, at least, has its appeal to “fairness.” Europe’s right hasn’t dared articulate an alternative vision for fear of appearing asocial and losing elections — and now it’s losing anyway.

Green Cosmopolitanism Fashionable in North Europe

Green and socially liberal parties are the rise across Northern Europe. From Britain to Berlin, their electorate is composed of students and young urban professionals who lean left on social issues but do not care for the welfarism and trade union socialism of traditional labor parties.

State elections in Berlin, Germany were closely watched this weekend for a Green election victory. Bündnis 90/Die Grünen won 17.6 percent of the vote, behind the major party Social Democrats and conservatives but ahead of the liberals and far left which both lost support.

Some of the new Green party voters come from the Social Democrats who retained their majority despite losing votes; some of them come from the pro-business Free Democrats who didn’t make the election threshold.

The Free Democratic Party, Chancellor Angela Merkel’s coalition partner on the federal level, has performed poorly in recent state elections after it claimed an unprecedented 14.6 percent share of the vote nationwide in 2009. The liberals’ popularity has diminished since with college educated urban voters in particular defecting to the left.

Local elections in Saarland in 2009 may have been a harbinger of a new political constellation in Germany where the Greens refused to cooperate with the Social Democrats and the far left in favor of an alliance with liberals and conservatives. In 2008, they had previously entered a coalition with the Christian Democrats in Hamburg.

This year, the Greens tripled their share of the vote in Rheinland-Pfalz and won the prime ministership in Baden-Württemberg, once a conservative stronghold. Their candidate, a 62 year-old former chemist, belonged to the centrist wing of the Green party and profited from an anti-nuclear sentiment that swept Germany in the wake of the Fukushima nuclear power plant disaster in Japan in March.

In Denmark and the Netherlands, left of center parties similar to Germany’s Grünen also appeal to cosmopolitan young working people who reject the old left’s reinvigorated market criticism but are appalled by the right’s willingness to embrace populist anti-immigrant and security policies at the same time. They are united around themes of environmentalism, individualism and minority rights.

In Denmark, the Radikale Venstre represents social liberals who oppose the main liberal Venstre‘s alliance with the far-right Danish People’s Party. In the Netherlands, the intellectual D66 and progressive GroenLinks together accounted for 13.5 percent of the vote in last year’s parliamentary elections. Both oppose the hardline immigration policy of the liberal-conservative government but favor market driven entitlement and labor law reforms.

The Liberal Democrats in Britain aren’t willing to admit yet that they represent a similar kind of cosmopolitanism. The reason is that part of their leftist electorate doesn’t want to commit to such a direction. As The Economist put it, when they voted Liberal Democrat last year, “they assumed it was a social democratic party with civil libertarianism and Europhilia thrown in; a Labour Party for university towns and upmarket suburbs rather than the industrial heartlands.”

The Liberal Democrats’ alliance with the Conservatives proved their voters wrong. Party leader Nick Clegg, now deputy prime minister, led them toward centrist, classic liberalism, much to the dismay of rank and file liberals who “don’t really believe their party is either liberal in the classical sense or even ideologically neutral between right and left.”

This could be a problem for other Northwest European Green parties as well. Their members tend to be more leftist than their voters who are generally skeptical of “big government” welfare schemes. Moreover, part of their base has pacifist roots which could complicate their ability to govern responsibly.

The German Greens realized this in 1998 when they entered a coalition with the Social Democrats just before NATO intervened in Kosovo. Green party parliamentarians weren’t happy with the war and outright hostile to sending German troops to Afghanistan in 2001. GroenLinks in the Netherlands found itself in a similar predicament this year when it failed to enthuse party members for an Afghan police mission it endorsed.

Socialists May Return to Power in Denmark

Denmark’s ruling coalition of conservatives and liberals is likely to be unseated in elections this week as the opposition Social Democrats hope to secure a parliamentary majority of center-left parties. After a decade of right-wing government, the Scandinavian country is expecting a change although major reforms could be complicated by coalition politics.

According to recent opinion polls, Prime Minister Lars Løkke Rasmussen’s liberal Venstre, a pro-business party that champions smaller government, would lose maybe no more than a single point in support down from 26 percent of the vote in 2007. His conservative coalition partners could be decimated however.

Denmark’s conservatives and liberals were able to govern with the parliamentary consent of the far-right Danish People’s Party, an anti-immigration platform that has consistently polled at around 11 to 14 percent of the vote. Unlike the other two major parties on the right, the populists are wary of entitlement reform and liberalization and draw considerable support from pensioners.

Although unemployment is below the European average at 4 percent, Denmark’s economy contracted by almost 5 percent in the wake of the financial crisis, forcing the governing parties to consider welfare reforms as they simultaneously cut taxes.

The government’s borrowing conforms to European treaty norms with 2.7 percent deficit spending but to achieve balance in the long term, Copenhagen has to reduce expenditures.

Raising more revenue was not an option for Venstre. Instead, it enacted a reduction in the top income tax rate from 59 to 51.5 percent in January of last year. Overall tax revenue amounts to 49 percent of gross domestic product nevertheless — an extremely high figure even among Northern European countries.

Negative growth and its implications for fiscal policy exposed the rift that had always existed between two governing parties and their allies in the People’s Party. They may be far to the right on immigration and security issues; their national conservatism borders on a protectionist economic stance which conservatives nor liberals can embrace. The People’s Party’s staunch support for existing welfare programs moreover made it nigh impossible for the ruling parties to implement meaningful reforms.

The Social Democrats of Helle Thorning-Schmidt, who represented her party in the European Parliament before assuming its leadership in 2005, have progressively increased their support in opinion polls since the start of this year, climbing from 25.5 percent of the vote in January — which equaled their performance in 2007’s election — to 28 percent this summer. In coalition with smaller socialist and Green parties on the left, the party that has spearheaded the opposition for precisely a decade could well return to government and deliver Denmark’s first female prime minister this year.

An obstacle could be the social liberals in the Radikale Venstre who are considered left of center on social and immigration policy but otherwise in favor of the market driven economic policies of the main Venstre party. If they will not enter a coalition that is dominated by socialists, they may be persuaded to support the new government without joining it — fulfilling the very role that the People’s Party they so despise has for ten years.

Europe’s Open Borders Compromised

European officials voiced concern on Thursday over Denmark’s plan to reintroduce customs controls on its borders, abolished under the Schengen Agreement. France and Italy have bickered over the entry of several tens of thousands of North African refugees while Greece is struggling to prevent illegal aliens from entering Europe from Turkey. The free flow of goods, people and services, heralded as one of the great achievements of European union, is in jeopardy. Read more “Europe’s Open Borders Compromised”

Economic Freedom in Denmark and Sweden

Every year The Wall Street Journal and the conservative Heritage Foundation publish the Index of Economic Freedom which ranks countries according to ten indicators that affect market freedoms throughout the world.

For several years now, Australia, Hong Kong, New Zealand, Singapore and Switzerland have made up the top five of economically freest countries in the world. Government spending as a share of national income is relatively low in these states; property rights are well protected while investment and trade can take place with few restrictions. Much of the developing world ranks poor by comparison. North Korea is at the very bottom of the list.

What is notable is that otherwise extensive welfare regimes as Denmark and Sweden rank relatively well — eighth and twenty-second in the world respectively.

A closer look at these countries’ rankings reveals that while government spending is extremely high, more than 50 percent of GDP in both Denmark and Sweden, in most other areas, they perform exceptionally well. Taxes are high, especially in Sweden which has a “burdensome income tax rate” according to the Index, but otherwise both Scandinavian nations are very free economically.

With its economy open to global trade and investment, Denmark is among the world leaders in business freedom, investment freedom, financial freedom, property rights and freedom from corruption. The overall regulatory and legal environment, transparent and efficient, encourages entrepreneurial activity.

The same is true for Sweden, albeit to a slightly lesser degree. Whereas Denmark has flexible labor laws, regulations in Sweden remain rigid. “The non-salary cost of employing a worker is high and dismissing an employee is costly and burdensome.”

Both countries maintain open borders to trade and investment from abroad at the same time. Corruption is perceived as almost nonexistent while property protection is solid. Neither government interferes much in small- and medium-sized businesses. Starting a company is simple and straightforward. The business framework in both Denmark and Sweden is highly conducive to innovation and productivity growth.

It’s just too bad they tax their people so heavily.

Fear of Change Propels Populists to Power

Throughout Europe, fringe movements have been able to maneuver themselves into the political spectrum, rallying anti-immigration forces and a renewed sense of nationalism with considerable electoral success. While the world is globalizing and Europe becoming one, millions of people, from Finland to Italy, want to have no part of multiculturalism and change. Read more “Fear of Change Propels Populists to Power”

Anti-Islamism as Impediment to Growth

For almost ten years, Denmark has enacted policies that limit immigration and promote the integration of ethnic minorities in Danish society. Some now fear that the country’s economic woes can be attributed, at least in part, to its Islam backlash.

Since the start of this decade, Denmark has been ruled by a minority government of liberals and conservatives, sustained in parliament by the Dansk Folkeparti (Danish People’s Party) which is known for its nationalistic, socially conservative platform and tough positions on law and order. Since it first participated in the country’s parliamentary elections in 1998, the party’s popularity has risen sharply to stabilize at a little over 13 percent of the vote in recent years.

Under the People’s Party’s influence, Denmark’s ruling coalition has approved of different measures meant to curb immigration to the country, including the enforcement of laws that were designed to prevent marriages from being arranged and forcing migrants to learn the Danish language. Read more “Anti-Islamism as Impediment to Growth”