For a time, it appeared as though someone was benefitting from the 2008 financial crisis. A perception that the political left cannot be trusted in times of recession meant that voters across Europe unseated left of centre governments in favour of the centre right. Put simply, it appeared as though the advocates of small government and austerity had won themselves at least a decade of uncontested control.
A mere two years later, it has become clear that this picture was never going to be as simple as it once appeared. Most opinion polls in Britain place the opposition Labour Party ahead of the ruling coalition. In Spain, strikes are as common as siestas, due to a widely unpopular €27 Billion austerity package. In the Netherlands, a major cheerleader of Merkel’s austerity drive, the government has lost majority support in parliament due to disagreement about budget cuts.
In further contrast, it is almost certain that the centre right will be the ones who are defeated in the second round of the French Presidential election a week today, in favour of a self professed socialist. If Mr Hollande does what many are expecting him to do and unseats Sarzoky, he will be bringing with him a radically different set of policies from ones we have come to expect in times of economic stagnation. He has promised a 75% top rate of income tax, a reversal of Sarkozy’s rise in the retirement age and a separation of retail and investment banking to curb France’s dependency on the financial sector.
To make matters a little more complicated, the perception of economic credibility does not appear to be translating into overall public support. The unpopular British Conservative party continues to lead Labour on questions about economic competency. They score 44% in opinion polls as opposed to Labour’s 31%. A similar picture is found in France where the otherwise trailing incumbent leads Hollande by 14% in terms of ability to make difficult economic decisions.
The French election gives some insight into why such a confused picture has blanketed Western Europe. Several economic commentators, including the Economist, have been arguing for some time that the Presidential contenders were all doing a brilliant job of avoiding the existential problem that France is facing. France’s public spending accounts for 65% of GDP as opposed to an OECD average of 43%. Public debt is slowly reaching 90% and could conceivably reach 100% by next year. Once one takes into account France’s lack of competitiveness, in terms of exports, social charges and youth unemployment, it becomes utterly baffling that perceived economic competency is not translating into votes for France’s centre right President. Instead, they prefer to see a reversal of Sarkozy’s modest economic reforms and yet more public spending, paid for by taxing 75% of the earnings of the wealthiest few.
Put bluntly, Europe’s politicians are failing to convince their electorate of the long term necessities for economic reform. Their chosen economic philosophy, which they presumably believe in wholeheartedly, is failing to persuade citizens. As a result, far too many European elections are becoming either referendums on personality or unnecessary, unhealthy and divisive squabbles over class or race.
France’s political extreme wings have successfully turned this election into a debate about Sarkozy the man, rather than Sarkozy the economist. If the latter were up for debate, there would be a very high possibility of the President retaining office. The French left argue that Sarkozy leads an extravagant life style and cares little about the ‘ordinary’ people of France. Hollande’s election team sight his lavish and arrogant demeanour, celebrating his 2007 election victory in a fancy hotel in the Champs Elysee. They promise to bring credibility and dignity back to the Presidential office. Hollande, and the now defeated Communist Melenchon have successfully made ‘rich’ a dirty word in France.
At the opposite extreme sits Front National candidate Marine Le Pen. Unsurprisingly, she has managed to shape the economic debate into a discussion about immigration and the EU. In what appears to have been a successful attempt to detoxify her party, which once entered the second round of the French election under her father, she now stands for a significant curb on immigration and France’s organized exit from the EU. Neither policy has gone unnoticed in the Sarkozy camp. The President has promised to re evaluate France’s position in the Union, threatening to pull out of the Schengen passport-free zone unless other European leaders do more to control immigration. Sarkzoy, the son of a Hungarian immigrant himself, has gone as far as to claim that ‘there are too many foreigners in France’.
While unsurprising, it is no less unfortunate that the main story dominating the media agenda after the first round of voting last Sunday was not Hollande’s victory but Marine Le Pen’s more than expected share of the vote. She managed to gain 17.90% support, less than 10% behind Sarkozy. Her campaign has rejuvenated the French youth, who are either poorly paid or unemployed. The number of actual anti-immigration supporters in France is no longer the issue; Le Pen has found a way to gain a level of support her more hard-line Father could never quite reach.
Yet, the most unfortunate result of the first round surely has to be the performance of Francois Bayrou. Back in late March, the economist argued that Bayrou was the only Presidential nominee brave enough to talk about the need for genuine economic reform. His party, Democratic Movement, called for €50 billion in spending cuts, alongside €50 billion in tax increases and dismissed Hollande’s 75% top rate of tax as ‘crazy’. The one party, making a genuine effort to transcend the political spectrum and talk solely about the economy, finished in fifth place with just 9.13% of the vote.
While politicians cannot be expected to court unpopularity in the run up to elections, there is surely more that could be done to reinforce their positions during their time in power. Sarkozy talks a good game on foreign affairs alongside his German ally, but is paying the price for dodging too many important questions about deficit reduction and growth at home. One cannot blame the French people for wanting to protect the state benefits and protections that are so ingrained into French culture, especially when their politicians are too fearful of offering a credible alternative. It is a rule as old as politics itself; popular short term promises are more effective at getting politicians elected than long term realizations. This does not mean that Europe’s leaders have to accept this as absolute. After all, rules are made to be broken. No one economic philosophy has dominated the post 2008 financial crash and it is unlikely if one ever will. Voters are simply demanding change, wherever that may lead.