Gordon Brown 

There’s a hard-right tidal wave about to hit Europe – and it will only make the economic crisis worse

Near-zero growth has crushed living standards across the EU, sending voters towards populist demagogues. But they have no solutions to offer, says former UK PM Gordon Brown
  
  

Italian PM Giorgia Meloni during the Brothers of Italy party conference in Pescara on 28 April.
Italian PM Giorgia Meloni during the Brothers of Italy party conference in Pescara on 28 April. Photograph: Roberto Monaldo/LaPresse/Rex/Shutterstock

By the time of the European parliament elections in June, this year’s rightward drift in European politics will have turned into a tidal wave. Ultra-nationalist demagogues and populist-nationalists are now leading the polls in Italy, the Netherlands, France, Austria, Hungary and Slovakia, and running second in Germany and Sweden. There are two hard-right groupings in the European parliament – Identity and Democracy and European Conservatives and Reformists. Between them, they could secure as much as 25% of the June vote. But even more ominously, in almost every part of Europe including Britain, these factions are forcing the hand of the traditional centre-right parties – which, one by one, are capitulating to ever more extreme anti-immigration, anti-trade and anti-environment positions.

The rightward shift is, of course, a western and not just European phenomenon, with Trump 2.0 advocating a far more aggressive protectionist and nationalist agenda than Trump 1.0. But Europe stands out from the US in one important respect. While the US economy roars forward – even if the average American voter does not feel the full benefits – Europe, and especially its industrial engine-room, Germany, continues to suffer from near-zero growth and stagnation in terms of living standards. And having lived through a decade of consistently low growth, the continent is now divided between an optimistic but declining minority, who still hold to the expectation that a rising tide lifts all boats, and the growing and more pessimistic majority who now see life as a zero-sum game.

The latter is a mindset that, recognising the economic pie is not growing, leads people to an erroneous conclusion: “I will only do well if someone else does badly.” Once embraced, this adversarial view is hard to shake.

The supporting evidence is clear: in the largest western European countries, many people are pessimistic about their prospects, believing that their generation will do worse than their parents. Only 26% of French people and just 33% of Italians think they will do better in future, according to a seven-nation poll by Focaldata. In the Netherlands and Germany, as many are pessimistic as optimistic. While Ireland and Sweden top the league for optimism, only 46% and 40% respectively feel they will fare better, with 39% and 35% taking the opposite view. In no country are a majority of people optimistic about their future.

The pollsters also tested the classic zero-sum proposition that you can only get rich at the expense of others. In every major European country, the results are dramatic: 59% of British respondents believe they can only enhance their personal wealth if others do badly, and just 17% disregarded this notion. Similarly, in Germany and the Netherlands, 60% and 58% respectively hold this view, compared with only 16% and 15% who rejected it. In almost all countries, more than 50% displayed a zero-sum mentality.

There are good reasons why these trends are becoming entrenched. A low-growth economy creates a doom loop as pessimism begets a blame culture – and the more we blame others, the more pessimistic we become. Once people convince themselves that the state of their economy is so weak that they can only improve their lot at someone else’s expense, they vote for parties that specialise in targeting those they think are holding them back – immigrants, foreigners and minorities. These parties offer nothing in terms of economic policies to generate long-term growth. The result is that zero-sum politics exacerbates the downward economic trends, and this, in turn, intensifies and widens the appeal of zero-sum thinking.

The problem Europe now faces is that the very measures it must adopt to escape this doom loop – new investment in technology, clean energy and medical advances – are being rendered impossible by its policy of fiscal retrenchment. The European growth and stability pact rules out member states having deficits above 3%, and perhaps as importantly, makes no distinction between public spending on consumption and spending on investment. Added to that, Germany has a debt brake enshrined in its constitution which limits the government’s structural deficit to 0.35% of GDP. This casts a shadow over the whole of Europe, with the German people facing severe cuts in public spending – cuts that will torpedo any chance of repairing the country’s beleaguered infrastructure and frustrating its transition from heavy engineering to IT and AI-based industries.

While China can subsidise to the point of undercutting Europe on electric cars, batteries and other new technologies, and Bidenomics is running huge deficits that are stimulating the economy, Europe is stuck in a fiscal bind. The European recovery and resilience facility ends for good in 2026, with no replacement. The stability and growth pact, which has restrictive conditions that were suspended during the Covid crisis, resumes its tough regime next year. France and 11 other European countries are already in trouble, unable to invest more because they are already running allegedly unsustainable deficits.

So, at the very time that investment needs to increase, it is likely to fall. And the European election results are unlikely to make things any better. Essential green investment will fall down the agenda as anti-environmentalist parties gain an upper hand. Protectionism will become the order of the day with trade wars, which hit Europe harder than anywhere else. Unless something gives, a low-growth Europe will remain stuck in its rut – and the populist xenophobes will triumph.

The nationalist timebomb is ticking. Across the continent, Europeans need a plan for better jobs through economic and environmental transformation. When the Polish trade union Solidarity was first formed, its anti-Soviet slogan was “No solidarity without freedom”. But soon many realised that free-for-all neoliberal economics would mean rising inequality and low living standards for the mass of people, and so a new slogan soon rang out: “There is no solidarity in freedom.” If progressives want to prevent an election campaign dominated by anti-immigrant propaganda, they will have to stand up to protectionism and xenophobia by showing the benefits of cooperation.

  • Gordon Brown was UK prime minister from 2007 to 2010

 

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