Vidya Ram

Winds of political uncertainty in Europe

Vidya Ram vidya rameuroscope | Updated on June 08, 2018

Differing pulls Domestic and international factors are at play in Europe REUTERS   -  Reuters

The rise of Euro-sceptics to prominence in Spain and Slovenia poses a challenge to centrist leaders such as France’s Macron

Arahy, a fine dining restaurant in central Madrid is no stranger to upmarket customers. But last week it gained another level of interest, as media from across the world gathered outside it; Mariano Rajoy, who had been Spain’s Prime Minister from 2011 spent around eight hours inside it, awaiting the results of a no-confidence debate and vote that took place in the Parliament nearby.

The motion was passed by a slim majority (of 180 to 169 with one abstention) and Pedro Sanchez, the leader of the opposition Socialist Party, who had led a coalition of parties that supported the no-confidence motion, took over as Prime Minister. The developments marked a remarkable shift in the fortunes of both politicians — till even a month before Rajoy had appeared secure in his position, and had easily survived a no-confidence vote against him brought by the anti-austerity Podemos party last June.

Corruption taint

Sanchez, on the other hand, had been forced to stand down as party leader in 2016 (over disagreements with his fellow party members over whether or not to support the Rajoy administration at the time), before resuming his leadership role last year.

While the government’s handling over the secessionist movement in Catalonia was the issue that kept Spain in the international headlines, it was a corruption scandal that pre-dated the Rajoy administration that felled the administration.

In late May, the High Court convicted 29 people, including former senior officials of Rajoy’s People’s Party of corruption, including bribery, misappropriating public funds and money laundering.

One businessman was sentenced to 51 years in prison, while the former treasurer of the PP was sentenced to 33 years and €44 million in fines.

Efforts by Rajoy and his colleagues to distance themselves from the scandal — and deny any awareness of what had transpired — proved little avail in preventing the party more widely from being tarnished, particularly in the shadow of its handling of the Catalan crisis.

“This judgment leaves Rajoy in a position that is incompatible with the political and moral authority that is required to carry out his duties,” concluded El Pais, the nation’s leading daily newspaper.

The developments in Spain ended a tumultuous week for European politics: Also on June 1, nearly three months of negotiations (and uncertainty) over the future of the Italian government came to an end as Giuseppe Conte, a law professor, took over as Prime Minister, heading a coalition of the anti-establishment Five Star Movement and the far right Northern League.

Euro scepticism

Even days before the prospects for Italy had looked uncertain, as Italian President Sergio Mattarella rejected the Conte-led administration because of the choice of Paolo Savona, a strongly Euro-sceptic politician, as its choice for Finance Minister (the person to eventually land the role is Giovanni Tria, an economics professor who is critical of the Euro zone but does not push to exit it).

The developments highlight the complexity of what is under way in Europe at the moment.

In Spain, the success of the Socialist Party in ousting Rajoy would have not been possible without the support of a combination of separatist, left wing and anti-establishment forces.

In Italy, the Five Star Movement and Northern League working together sought to exploit domestic concerns around immigration as well as growing anti-EU sentiment, to yield an election result that left markets spooked for months.

Earlier this week, over in Slovenia, the far right anti-immigrant SDS Party emerged as the largest political party in the general election (though negotiations will follow on the structure of any future government), following in the footsteps of other elections particularly in eastern Europe, not least in Hungary, where the SDS Party’s ally Viktor Orban is Prime Minister.

The results add to the complexity of Europe’s road forward. While more liberal voices dominate in some parts of Europe such as in France (President Emmanuel Macron has pitched himself as the EU’s main proponent of liberalism and democratic values), others are coming under pressure from a mix of closed-border or Euro-sceptic voices (though these in many cases don’t overlap, with many nations particularly in the East, eager to remain in the EU while reforming its direction).

The changing mix of voices will create a different dynamic when it comes to tacking common challenges (unlike, for example, during the handling of the Greek economic crisis of 2009 onwards, where the tough approach advocated by the German government dominated). Highlighting the different approach — in tone at least — in his letter congratulating the new Italian prime minister, President of the European Commission Jean Claude Juncker expressed the commission’s willingness to engage with the new government’s expectation and proposals for the future of the union.

Fresh equations

How the new voices direct EU policy is yet to become clear. In his first major speech earlier this week, Conte pushed for a different approach from Europe, including a re-engagement with Russia (and revision of the current tough sanctions regime), a reversal of the austerity that had been pursued by the previous government — and a tougher line on immigration (in line with one of the main objectives of the Northern League).

At the same time, the accommodation works both ways: while pushing for these policies, Conte also sought to reassure investors and the EU of his commitment to the EU. The EU was Italy’s “home,” he insisted in the speech, that pushed for “stable” and “sustainable” growth.

The change of guard in Spain is also potentially good news for the EU as is the push by the ilk of Macron for further rather than less integration: the Sanchez administration has given strong signs that it is eager to pursue a strongly-pro-EU line, including through the choice of the EU’s director general for budget as its new economy minister.

How these differing pulls play out for Europe and its engagement with the wider world remains to be seen. What is clear however, as ever, is that a complex of domestic and international factors play into Europe, and neither nationalist nor liberal forces can be complacent or be said to have the upper hand in its progression.

Published on June 08, 2018

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