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Fragmented Europe risks paralysis

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Those of us who waste time watching YouTube videos are familiar with a classic from the American racetrack, in which two horses called respectively “My wife knows everything” and “The wife doesn’t know” battle it out.

The early interpretations of the European elections reminded me of that video — except in this case the two horses are called “This changes everything” and “This changes nothing”.

Those who argue that “this changes nothing” have some powerful points. Collectively, pro-EU parties will continue to dominate the European Parliament. Anti-EU parties now account for about a quarter of the seats in the parliament, up from about 20 per cent. But some of the stars of the nationalist right had disappointing nights — including the Alternative for Germany, the Danish People’s party and the Forum for Democracy in the Netherlands.

However, those who think that “this changes everything” also have evidence to point to. Eurosceptic (or Eurohostile) parties emerged as the largest in four of the six most populous EU countries: France, Italy, Britain and Poland.

One reason for this clash of interpretations is an over-focus on just one question: what does this mean for the battle between the pro-EU forces and anti-EU insurgents? But if you ask a different question — what is happening to the parties that have dominated European politics? — then a clearer trend emerges. The traditional centre-left and centre-right are in decline. They are losing ground not just to populist nationalists, but also to parties that appeal to an urbanised middle-class, such as the greens and liberals.

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In France, the centre-right and centre-left (the Republicans and the Socialists) scored less than 15 per cent of the vote, while the far-right, the liberals and the greens scooped up almost 60 per cent. In Italy, the centre-left and centre-right won about 31 per cent of the vote; populist parties scored 58 per cent. In Britain, the Conservatives and Labour won just 23.2 per cent of the vote between them. This trend against the traditional mainstream parties extended even into stable, sensible Germany, where the centre-right Christian Democrats and centre-left Social Democrats fell well below 50 per cent of the vote combined. The greens came in second with just over 20 per cent, with the far-right claiming another 11 per cent.

It seems that political parties built around the class and economic structures of the 19th and 20th centuries are losing their relevance. European voters are increasingly motivated by new issues — such as climate change, identity and migration.

The consequence is likely to be a period of political uncertainty and flux that will make it harder for the EU to act. The fact that the centre-right, socialists, liberals and greens are all broadly pro-EU cannot disguise their very different views on key areas such as climate change and eurozone reform. One big issue to look out for is the political future of Angela Merkel, the German chancellor. Another dismal result for the SPD may persuade them to pull out of the governing coalition, so collapsing the government. Ms Merkel will also be under pressure from within her own CDU. The party’s weak electoral performance may empower Annegret Kramp-Karrenbauer, the chancellor’s heir apparent, to push for Ms Merkel to go sooner rather than later. Meanwhile, some in the CDU will argue for a move sharply to the right on issues such as the euro and energy policy.

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If Ms Merkel is forced out early, the EU will have lost its dominant political figure. But even if she stays in office for another two years, the fragmentation of European politics, reflected in the European Council and the parliament, may hinder the EU reaching decisions on crucial matters, including the euro, migration, Brexit and policy on China.

An early test will come with the discussion over the new leaders for the European Commission, the European Central Bank and the European Council. In theory, this should be wrapped up quite quickly, with the first serious discussion taking place this week. But the confused picture emerging from the elections may lead to a protracted process that glues up the institutions.

Some issues cannot be deferred forever. By October, Britain and the EU will once again have to consider whether to extend the Brexit process, or to accept a “no deal” Brexit. The odds of “no deal” have surely risen after the polls.

French president Emmanuel Macron’s ambitious plans for eurozone reform look even less likely to make progress, given his own relatively weak performance and the current political confusion in Germany. However, events in the markets — in particular, renewed pressure on the euro — could force the EU’s hand.

The big question underlying all this is whether the EU is gradually disintegrating, or gradually progressing towards a closer union that can defend Europe’s interests. That matters increasingly in a world that would otherwise be dominated by two potentially hostile superpowers — the US and China, with Russia also playing a malevolent role.

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The beginnings of a global trade war ensure that this is not an abstract question for the EU. On the contrary, European unity will be tested repeatedly by world events in the coming months and years. Political paralysis and fragmentation is a luxury the EU may not be able to afford.

gideon.rachman@ft.com

Via Financial Times

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