The Limits of the Welfare State

Friday, October 9, 2009

June’s European elections seemingly presented a sharp contrast with America’s recent presidential race: even as Democrats prevailed in the United States, Europe moved further to the right and dealt a historic blow to its homegrown socialist and social-democratic parties. Yet in many ways these movements represented not a split but a transatlantic convergence— a shared attempt to find the right balance between market strategies and the welfare state.

European Parliament elections have little in common with presidential or legislative elections, whether American or European. Although the Parliament is the only popularly elected European institution and the poster child for Europe’s efforts to become more democratic, its elections lack the high visibility and drama as well as the clear stakes of national elections. They also raise more questions than they answer about the role, legitimacy, and arcane ways of European institutions and policy making. Nonetheless, they hold great political significance.

Every five years, these elections offer a unique opportunity to gauge public opinion and political forces in each of the European Union’s twenty- seven member-states, as well as in Europe as a whole. The current economic crisis, more severe than any other that European countries have had to confront as EU members, made these elections all the more interesting. National parties and candidates compete in each country over national issues in what often resembles a referendum on their incumbent leaders while also providing a rough, albeit skewed, measure of popular support for European integration, governance, and policies.

The 736-member Parliament has gained power over the years, at the expense of not only national legislatures but other European institutions such as the European Commission, the bloc’s technocratic executive. For example, Parliament can block the nomination of a new commission or overthrow an incumbent one. But if, as expected, the Irish ratify the so-called Lisbon treaty (formerly referred to as the “European Constitution”) in a referendum this fall, Parliament will become a full-fledged co-legislator alongside the powerful Council of Ministers in virtually all policy areas within the European Union’s jurisdiction. This is important, because about 70 percent of national legislation originates in the European Union.


How did the 388 million eligible voters cast their ballots? The results clearly confirmed two trends that have emerged over the past few election cycles. First is the gradual erosion of popular support for Europe—the idea, the institutions, and the policies—illustrated by ever lower turnouts and the rise of nationalist and Euroskeptic parties. Second is the decline of socialist and social-democratic parties since the end of the Cold War that has helped center-right parties secure their dominant position. The main beneficiaries of the left’s retreat have been both far-left and far-right parties, which appeal to the disillusioned working class with calls for less immigration and more protectionism.

But there were surprises in the June voting. Heightened nationalism and Euroskepticism were expected amid a dire economy, but the degree of the shift to the right and away from the left was startling. Center-right parties were expected to keep their Parliament majority, but few observers predicted they would do so well. As for the left, the magnitude of its thumping represented a political earthquake. The economic crisis, after all, was triggered by the excesses of capitalism and originated in the temple of capitalism: the United States. Shouldn’t the center-right parties— containing many incumbents—that had supported if not spearheaded policies such as the liberalization of the financial sector be an ideal target? Shouldn’t the left, whose goal has always been to reform capitalism and increase social protection, have done better?

The election results confirmed a continuing loss of support for Europe— the idea, the institutions, the policies—and for socialist and socialdemocratic parties.

Let’s look closer. In most countries, the center-right won and the center-left lost, regardless of who was in power. In spite of an antiincumbent bias familiar to observers of U.S. midterm congressional elections, the parties of Nicolas Sarkozy, Angela Merkel, and Silvio Berlusconi collected 28, 38, and 35 percent of the vote, respectively, in France, Germany, and Italy. Governing center-right parties also won in the Benelux countries, Austria, Poland, the Czech Republic, Hungary, Finland, and Romania, to mention a few. In opposition, the right defeated the ruling parties of the left in Britain, Spain, Portugal, Slovenia, and Bulgaria. The left was victorious via the incumbent parties in Denmark and Slovakia; in opposition, it won in Sweden, Greece, and Malta.

In sixteen countries—among them the United Kingdom, France, Germany, the Netherlands, Ireland, Austria, and Poland—the left suffered collapses of historical proportions. Prime Minister Gordon Brown’s Labour Party collected a mere 15 percent of the British vote, its lowest mark since 1918, half the Conservatives’ tally and two points behind the surging U.K. Independence Party, the leading advocate of Britain’s exit from the European Union. Spanish Prime Minister José-Luis Zapatero’s Socialist Party proved more resilient, finishing only three points behind the conservative Popular Party in a country where unemployment has doubled to 20 percent as a result of one of Europe’s most severe real estate debacles. In Germany, the social democrats of the SPD scored 20 percent, their lowest since their postwar renaissance and 18 points behind Chancellor Merkel’s CDU-CSU.

More surprising was how badly the left lost in opposition. The French socialists scored a meager 16 percent, their lowest in decades in a “national” ballot, on a par with a revived Green Party led by Franco-German Daniel Cohn-Bendit, the charismatic former leader of the Paris student revolts in 1968. The Socialist Party lost a whopping 12 points compared with the 2004 European elections and this year trailed Sarkozy’s party by the same amount. Green parties like Cohn-Bendit’s were among the main beneficiaries of the traditional center-left’s retrenchment, not just in France but also in the United Kingdom, Germany, and Denmark. Their core constituencies and cross-border nature make climate change the perfect—and probably only—pan-European cause. The urban “bourgeois bohemians” (or bobos) are more in tune with the Greens’ message and political culture than with the traditionally hierarchical, union-dominated leftist parties.

Anti-incumbent bias failed to make much difference to European voters, despite the economic crisis.

The far right registered the most spectacular breakthroughs. The British National Party (BNP), which advocates “British jobs for British workers,” attracted 9 percent of the vote. In the Netherlands, the Freedom Party led by Geert Wilders, the creator of a film critical of Islam, gathered 16.2 percent, 2 points behind the governing Christian Democrats. Austria’s farright parties scored 13 percent and 4.7 percent, respectively; Hungary’s Jobbik, 18 percent; and Romania’s Great Romania Party, 9 percent. The regionalist Northern League, part of Silvio Berlusconi’s governing coalition, rose to 9 percent. The Czech National Party, the Danish People’s Party, and their counterparts in Bulgaria and Finland also gained ground. Only in France and Belgium did the more established far right retreat, as a result of internal problems and shifting national political dynamics.

Despite some differences, all the far-right parties are nationalistic, xenophobic, Euroskeptical, anti-immigration, and opposed to the prospect of Turkey joining the European Union. They recruit disproportionally among the working class and lower middle class, which are most affected by economic change and the current recession. (The anti-nationalist far left, for its part, also denounces Europe, which it decries as a free-market domain where workers’ interests are sacrificed to greedy corporations. Farleft parties hover above 10 percent in France and Italy, their historical strongholds.)


If the far right is invariably Euroskeptic, not all Euroskeptics embrace extremist ideologies. There are many varieties of Euroskepticism: some denounce encroachment on national sovereignty or the goals and processes of European integration, others decry a Europe that is either too freemarket- oriented or too socialist. They all are opposed to the Lisbon treaty.

Green parties—whose emphasis on climate change may be the only pan-European cause—were the main beneficiaries of the center-left’s retrenchment.

Britain’s populist and nationalistic U.K. Independence Party, which scored a stunning 18 percent despite competition from the BNP and the Conservative Party, focuses on opposing the European Union and Britain’s membership in it. In Austria, the party of former journalist and social democrat—and now member of Parliament—Hans-Peter Martin won 18 percent in his first European elections by exploiting the theme of corruption in European institutions. The most colorful single-issue party is no doubt Sweden’s Pirate Party, which won a seat for its leader on a platform of free file sharing, less surveillance and regulation, and the loosening of copyright laws on the Internet. Thanks to the Pirate Party, in fact, the Internet may have come of age politically, as young people and libertarians realize they can help shape its future at the polls.

Small, nationalist, and Europe-focused parties (either for or against) thrive in these low-key, low-turnout elections where voters pay more attention to strong messages than to the candidates’ slates. As a sort of political incarnation of globalization, Europe is at once the foil and the scapegoat used by nationalists and skeptics to assert their national identity and explain away national shortcomings.

The Euroskeptic drift poses a challenge to both right and left. Parliament’s center-right grouping could have reinforced its majority had not the British, Polish, and Czech conservative parties joined a new Euroskeptic bloc; other conservative parties could yet see their Euroskeptic right split away. Such internal divisions have already weakened several socialist parties whose left wings have grown increasingly critical of the European Union’s market orientation.


What accounts for the central paradox of the Parliament elections—that amid the most severe economic recession in decades, the winners were mostly incumbents and the center-right, the losers the center-left? Ideology does not explain it all. In some key countries, the center-right benefited from the popularity of strong leaders: Sarkozy in France, Merkel in Germany, Berlusconi in Italy, and Donald Tusk in Poland. In Britain, Labour’s crushing defeat was due more to twelve long years in power, Gordon Brown’s unpopular leadership style, and David Cameron’s growing credibility than to any ideological shift. In most cases, the center-left also approached these elections less united than the center-right. Moreover, the diminishing turnout in national and European elections disproportionately affects the young and the working-class, two traditional leftleaning constituencies.

The European right grasps citizens’ attachment to the welfare state—but like those citizens and unlike the left, it understands the limits of that state.

During economic downturns, the left normally enjoys an ideological advantage when voters weigh the respective merits of free markets and the welfare state; the left is better equipped to exploit social distress. But this has been a different kind of recession. European voters, outraged by the financial scandals as they were, realized that the more market-oriented right was no more the culprit than the left; successive governments had pursued a liberalized financial sector with the same vigor, if not the same conviction. Moreover, the global dimension of the crisis made it difficult to assign blame to incumbents. The center-right enjoys a greater reputation for competence, pragmatism, and prudence in financial matters than the more ideological and adventurous left, and therefore the European middle class voted for parties that best reassured them about their property and savings.

Europeans, though outraged by the financial scandals, realized that the more market-oriented right was no more the culprit than the left.

But the right also prevailed because it was willing to talk, and act, like the social democrats. It denounced financial speculation and the multimillion- dollar remunerations of traders and CEOs, demanding the “moralization of capitalism,” as Sarkozy put it. This more-pragmatic right has no compunction about borrowing the left’s interventionist approaches: rescuing banks and auto companies, extending the social safety net, reregulating the financial sector, and letting loose public spending. Merkel and Sarkozy, in fact, had already resorted to such discourse to clinch their electoral victories and make their market reforms more palatable. All they had to do when the crisis struck was to turn up the volume.

The most successful center-right parties, such as the British Conservative and the Spanish Popular parties, had already veered to the center in opposition under David Cameron and Mariano Rajoy, in ways that neither Margaret Thatcher nor José-María Aznar would recognize. The European right has internalized citizens’ attachment to the welfare state, especially in times of recession; it also is more in tune with public opinion than the left because it understands the limits of the welfare state. Europeans realize that governments are broke and that only clever market strategies can bring about social and economic progress in the age of globalization.

Long-term demographic and psychological trends are also in play. Europe’s population is aging, and the older the person, the more politically conservative; the elderly have started to organize politically to defend their retirement and health care benefits. Voters also have a heightened perception of threats including crime rates, terrorism, and competition from China, India, and other emerging economies. Immigration and Islam challenge Europeans’ sense of identity and values. Europeans are wondering why they should vote for the traditional left if center-right parties will do a better job of protecting them from economic risk, grasping the stakes in the global economic competition, and preserving values and national identity.

The European left’s staple values of justice and solidarity remain widely shared; that is why the right embraces them, and why candidate Obama had such a ready audience in the United States. (Center-right leaders have been more adept at exploiting Obama’s popularity in Europe than has the left, which preferred to blame the United States for the financial crisis.) The left will advance again only if it can shed its dogmas and archaic ideology, offer concrete and innovative policies, and reconnect with its popular roots.

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