The Euroskeptic Wave Has Not Broken

Analysis – Stratfor

Summary

EU leaders who feared that elections in the Netherlands would strengthen the wave of Euroskepticism building across the Continent were soothed by the worse-than-anticipated performance of the populist Party for Freedom. But although most Dutch voters did not embrace the party, the conditions that have fostered the rise of nationalism across Europe are still in place.

With the Dutch elections over, those concerned with the future of the eurozone will turn their focus to France, which will hold presidential and legislative elections between April and June. But a potentially bigger threat to continental unity lies in Italy, where a number of political parties want the country to leave the eurozone, and the electoral system may allow them to access political power.

Analysis

To a large extent, international interest in the Dutch election was driven by the effect it could have had on this year’s other European elections. France and Germany will hold general elections this year, and Italy could join them, depending on the fate of its fragile government. Europe’s populist and Euroskeptic parties would almost certainly have touted a strong showing by the Party for Freedom to legitimize their own positions. But the power of the elections in the Netherlands to effect events elsewhere in the European Union should not be exaggerated.

One of the key elements to consider when assessing the likelihood of Euroskeptic parties seizing ground is each country’s institutional structure. EU members’ political and electoral systems vary. The Netherlands, for example, has a parliamentary system with a proportional electoral law. This means that there is a close correlation between the number of votes a party gets and the strength of its representation in parliament. It also means that parties must form coalitions to enter government. Party for Freedom leader Geert Wilders had little chance of becoming prime minister because other parties expressed unwillingness to join in a coalition with him. Wilders’ main goal was to win enough seats to force other parties to cooperate. From that perspective, the results of the March 15 election represented a significant defeat.

France, on the other hand, has a semi-presidential system, where both the president and the members of the National Assembly are elected after two rounds of voting. If no candidate wins more than 50 percent of the vote in the first round, a runoff is held. Presidential runoffs pit the two most popular candidates against each other; in legislative runoffs, candidates that win more than 12.5 percent of the votes face off. This system is designed to prevent extremist parties from accessing power. In fact, the National Front has been constantly underrepresented in French politics because it has traditionally struggled to win legislative and presidential runoffs.

But although France’s electoral system tends to shut out fringe parties, it also creates presidents who are invested with more strength and stability (at least from a constitutional point of view) than are most European prime ministers. Moreover, France’s legislative elections are held only a few weeks after the presidential election. This means that a victorious president’s power could be bolstered by a majority legislature. Should the National Front reach the second round of the presidential election in May and win, it could create enough momentum to carry its party’s candidates to victory in National Assembly elections in June.

The role of the legislative election should not be understated. French presidents have a long list of exclusive powers, but many of the reforms the National Front wants to introduce would require a strong majority in Parliament. Some, such as leaving the European Union, would even require constitutional reform. Opinion polls suggest that none of this will happen and that National Front leader Marine Le Pen would be defeated in the presidential runoff no matter her opponent. But the most important point is that a President Le Pen would be considerably stronger than a Prime Minister Wilders.

Like the Netherlands, Germany and Italy also have parliamentary systems with proportional electoral laws, and coalitions often must be built to form governments. The German election will provide an important measure of the appeal of Euroskepticism in the eurozone’s largest economy, but the populist Alternative for Germany (AfD) party, which wants to leave the eurozone (or at least break the currency area into northern and southern blocs) and demands that the European Union return powers to member countries, is very far from accessing power. To begin with, it currently polls at around 10 percent, while the center-right Christian Democratic Union and the center-left Social Democratic Party are polling at around 30 percent each. More important, the mainstream parties do not accept it as a possible coalition partner.

As a result, the most important factor to watch when it comes to AfD is the level of influence it will have on political debate in the country. The more threatened mainstream parties feel by AfD, the more they will try to adopt elements from its Euroskeptic agenda. A similar pattern emerged in the Netherlands, where Wilders’ rhetoric influenced the debate and forced some of his rivals to adjust their stances on issues such as immigration.

Should moderate forces win the presidential election in France, Italy will be the next country to watch. Elections are not until early 2018, but the ruling Democratic Party is going through a leadership battle that could lead to early elections. Unlike the Dutch election, where the Party for Freedom was the only force openly campaigning to leave the currency area, three of the four most popular parties in Italy oppose the euro. The anti-establishment Five Star Movement and the right-wing Northern League both have promised to hold a referendum on Italy’s membership in the eurozone, while the center-right Forza Italia recently made ambiguous comments about reintroducing the lira as a parallel currency. These parties have very different political agendas and have so far refused to cooperate. Moreover, the Five Star Movement, which heavily criticizes professional politicians, has vowed to never enter a coalition with other forces.

Ironically, Italy’s fractious politics may prevent the country from leaving the eurozone, even if a significant number of parties campaign for it. But Italy’s electoral law makes a Euroskeptic government more probable there than in any of the other eurozone countries holding elections this year. Italy has the third-largest economy in the eurozone, and the currency area likely would not survive its withdrawal.

Multiple factors fuel European populism and Euroskepticism: weak economic growth, high unemployment, fears of the impact that immigrants have on a country’s identity and security, demographic change, discontent with traditional political elites and a feeling among certain sectors of the population that the alleged benefits of globalization are failing to reach them. Regardless of the results of the elections this year, many of those trends will not change and will remain a threat to the continuity of the eurozone. Political and electoral systems alone will not determine their success but will play a role in their evolution.   MARCH 17, 2017

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