Europe and nationalism: A country-by-country guide
Across Europe, nationalist and far-right parties have made significant electoral gains.
Some have taken office, others have become the main opposition voice, and even those yet to gain a political foothold have forced centrist leaders to adapt. In part, this can be seen as a backlash against the political establishment in the wake of the financial and migrant crises, but the wave of discontent also taps into long-standing fears about globalisation and a dilution of national identity.
Although the parties involved span a broad political spectrum, there are some common themes, such as hostility to immigration, anti-Islamic rhetoric and Euroscepticism. So where does this leave Europe's political landscape?
Inconclusive elections and months of uncertainty have culminated in two populist parties - the anti-establishment Five Star Movement and right-wing League - forming a coalition government. Their rise from the political fringes comes in a country badly hit by the 2008 financial crisis and which then became the main destination for North African migrants. Formerly known as the Northern League,
The League has switched focus from its initial goal of creating a separate northern state to leading a country it once wanted to leave.Their joint programme for government includes plans for mass deportations for undocumented migrants, in line with The League's strong anti-immigration stance. Visiting Sicily, Italy's new interior minister and League leader Matteo Salvini said the island must stop being "the refugee camp of Europe".
Both parties are unhappy with the euro, and with few ruling out more elections the next vote could provide a major headache for the European Union.
Italy's populist coalition: What you should know
The anti-establishment Five Star Movement and right-wing League have gone into coalition, preparing to set the eurozone's third biggest economy on a path of tax cuts, a guaranteed basic income for the poor and deportations of 500,000 migrants They reject years of EU austerity and want to renegotiate Italy's debt. So what will this government, led by law professor Giuseppe Conte, mean for Italy and the rest of Europe?.
Italy's future in the euro Neither Five Star nor The League are fans of the single currency. League leader Matteo Salvini said not long ago that the euro was "a mistake" for Italy's economy, while Five Star had wanted a referendum on Italy's future membership.
But they have dropped their initial ambition of exit from the euro and now talk of trying to reform it from within. Not everyone is convinced by their change of heart. France's Economy Minister Bruno Le Maire earned a rebuke from the leader of The League by warning the populist parties to respect Italy's budget commitments.
What do populist parties plan for Italy?
Italy was ravaged by the 2008 financial crisis that left the economy some 6% smaller and three million more people in poverty. The answer for The League and Five Star is to move Italians out of poverty. But their policies will cost tens of billions of euros, for a country with the second biggest public debt in the EU after Greece. It stands at 132% of national output.
Guaranteed income for the poor Poor families will get a €780 (£682; $919) basic monthly income, provided recipients actively seek work, the parties say. It is a popular idea but one that will cost an estimated €17bn to implement.
Two income tax rates Its most expensive policy is the idea of two "flat tax" rates set at 15% and 20%. Families would receive a €3,000 annual tax deduction based on household income. Sales and excise tax increases next year, worth €12.5bn, will be scrapped.
Pension reform The minimum monthly pension is to be set at €780.The plan abolishes the current pension reform that raises the retirement age in phases.Instead, a new points system would combine people's total years of social security contributions with their age. The total must be at least 100, meaning that someone who has paid into the system for 41 years, for example, could retire at 59.
Cutting Italy's debt The populist parties say they want revisions to the EU's Stability and Growth Pact, which sets a tough budget deficit limit of 3% of GDP. The plan aims to reduce debt through "the revival of internal demand", not by continuing austerity.
Italy's populists are not just aiming to reset the economy and revisit the EU's rules on debt. The League is strongly anti-immigration and their joint plan reflects that.It demands more EU help for Italy - the main destination for migrants arriving from North Africa -
and it insists that the estimated 500,000 undocumented migrants in Italy must be deported "as a priority". That would require the creation of "temporary stay facilities" throughout Italy for migrants earmarked for expulsion, the parties say.
Formed just five years ago, in 2017 the far-right Alternative for Germany (AfD) entered the federal parliament for the first time. From its beginnings as an anti-euro party, it has pushed for strict anti-immigrant policies and tapped into anxieties over the influence of Islam. Leaders have been accused of downplaying Nazi atrocities.
Their success has been interpreted as a sign of discontent with Chancellor Angela Merkel's open-door policy for refugees. At the height of the migrant crisis, Mrs Merkel lifted border controls and almost a million people arrived in 2015,
many of them Muslims from Syria, Iraq and Afghanistan.Despite her CDU/CSU bloc seeing its worst result in almost 70 years, last year's elections were enough for Mrs Merkel to secure a fourth term as chancellor and form another coalition with the SPD party.
For AfD, their status as the largest opposition party gives them their biggest platform yet. But the AfD's rise has also seen a change in tone from Mrs Merkel - in her first major speech of her new term she said that the "humanitarian exception" of 2015 would not been repeated, as well as promising to beef up border security and boost deportations.
German election: How right-wing is nationalist AfD?
The nationalist Alternative for Germany (AfD) has entered parliament in Germany for the first time, winning 12.6% of the vote and more than 90 seats. Founded in 2013 as an anti-euro party, it has dramatically shifted its focus to immigration and Islam and is increasingly seen as far-right in tone. Yes.
Leading AfD figures made extremist statements before and during the 2017 election campaign.Since the vote, Alexander Gauland has talked of fighting an "invasion of foreigners" and their campaign openly focused on Islam and migration. AfD sees Islam as alien to German society. Some of their rhetoric has been tinged with Nazi overtones.
They sit in the same political family as France's far-right National Front and Austria's far-right Freedom Party - as well as the populist, anti-Islam Dutch Freedom Party (PVV) of Geert Wilders. Nigel Farage, former leader of the UK's anti-EU party UKIP, took part in their election campaign.
AfD started out as an anti-euro party and still has a relatively moderate wing, so almost a million of its new voters have come from the centre-right CDU, and half a million from the centre-left SPD. Their anti-immigrant rhetoric now puts them in the far-right camp.
But their brand of nationalism is less extreme than that of Germany's NPD, seen by many as a neo-Nazi group. AfD has only existed for four years and its leadership has gone through regular, turbulent changes. Its best-known figures are currently Alice Weidel and Alexander Gauland.
Frauke Petry was its most recognisable face, but she has gone independent because of an internal party spat. Alice Weidel is a 38-year-old economist who lives in Switzerland with a woman adopted as a child from Sri Lanka and their two children. She is one of a small number of women in prominent positions in AfD and argues that her presence as one of its top candidates proves the party is not homophobic.
Gauland, a 76-year old lawyer, has made a number of remarks condemned as racist, including one on footballer Jérôme Boateng, who was born in Berlin to a Ghanaian father: "They like him as a football player. But they don't want to have a Boateng as their neighbour."
A far-right party in neighbouring Austria has enjoyed even greater success than the AfD. Last year saw the Freedom Party (FPÖ) become junior partner in a coalition with the government of Conservative Chancellor Sebastian Kurz.
The Conservatives along with the centre-left Social Democrats have long dominated Austrian politics. The FPÖ had already only narrowly lost a presidential election in which the two main centrist parties did not even make the second round. As in Germany, the migrant crisis is also seen as key to their success, and an issue they long campaigned on.
Mr Kurz has vowed a hard-line on immigration; during the campaign the FPÖ even accused him of stealing their policies.Since the election there have been proposals to ban headscarves for girls aged under 10 in schools and plans to seize migrants' phones.
The anti-immigration Sweden Democrats (SD) made significant gains in the 2018 general election. They won about 18% of the vote, up from 12.9% last time. The party has its roots in neo-Nazism, but it rebranded itself in recent years and first entered parliament in 2010.
Meanwhile, the centre-left Social Democrat party of Prime Minister Stefan Lofven has seen support ebb away. The Social Democrats are a party associated with generous social welfare and tolerance of minorities, while the SD opposes multiculturalism and wants strict immigration controls.
Like many of the countries featured here, though, the picture is complex. Sweden has welcomed more asylum seekers per capita than any other European country and has one of the most positive attitudes towards migrants.
Despite the efforts of leader Marine Le Pen to make the far-right National Front palatable to France's mainstream, she was comprehensively defeated by Emmanuel Macron for the presidency in May 2017. Marine Le Pen is anti-EU, opposed to the euro and blames Brussels for mass immigration. In 2010 she told FN supporters that the sight of Muslims praying in the street was similar to the Nazi occupation in World War Two.
Since their loss in the presidential election, the FN suffered an underwhelming result in parliamentary elections, winning a small handful of seats while Mr Macron's party dominated. More recently the party has renamed itself as the National Rally, with Ms Le Pen saying she would seek to gain power through forming coalitions with allies.
In April, Hungary's Prime Minister Viktor Orban secured a third term in office with a landslide victory in an election dominated by immigration.The victory, he said, gave Hungarians "the opportunity to defend themselves and to defend Hungary".
Mr Orban has long presented himself as the defender of Hungary and Europe against Muslim migrants, once warning of the threat of "a Europe with a mixed population and no sense of identity", comments that led to him being called a racist.
He is arguably the leading voice among the Visegrad countries in Central Europe - Hungary, Poland, the Czech Republic and Slovakia - that oppose EU plans to compel countries to accept migrants under a quota system.
Viktor Orban: The man who thinks Europe is being invaded
Viktor Orban presents himself as the defender of Hungary and Europe against Muslim migrants. He hopes to win a third consecutive term as a prime minister who puts national sovereignty before everything else. But critics attack him as a racist and an authoritarian.
What will it mean for Europe if he wins again?In January 2015, four days after the terror attack on the French satirical newspaper Charlie Hebdo, an estimated 1.5 million people marched through Paris. Viktor Orban was one of 40 world leaders at their head, standing in solidarity for freedom of expression and against terror. Different countries drew different conclusions from the Charlie Hebdo murders, and later terror attacks.
Orban was clear from the first moment who to blame. Immigrants. The troubled family background of the perpetrators, their upbringing in an orphanage, the radicalisation they succumbed to - all these were of no interest to Orban.
He told Hungarian TV: “We will never allow Hungary to become a target country for immigrants. We do not want to see significantly sized minorities with different cultural characteristics and backgrounds among us. We want to keep Hungary as Hungary.”
It was a narrative that Orban had used before but then started to exploit tirelessly to win votes at home. Orban asked his population in a referendum in October 2016 whether they wanted the EU to “impose migrants” on Hungary.
He got a resounding “no” from the 41% of the electorate who cast a valid vote, although that turnout was too low to make the final result count.Most of those coming were not refugees, fleeing war and persecution, he explained.
They were economic migrants wanting a better life in Western Europe. Hungary’s population has long been falling - 30,000 people a year, equivalent to the loss of a small town.The solution is not immigration, but rather to encourage Hungarian families to have more children,
Orban believes. To understand why an anti-immigration agenda might be so successful, it’s necessary to explore Hungary’s history. Less than 2% of the Hungarian population was born outside the country. And Hungarians have long memories of foreign invasion - of being overrun by the Turks, the Austrians and the Russians.
Although it fell a long way short of a majority, the anti-immigrant Slovenian Democratic Party (SDS) was the largest party in this year's general election. The party is led by former Prime Minister Janez Jansa, who like the Visegrad leaders opposes migrant quotas, and has said he wants Slovenia to "become a country that will put the wellbeing and security of Slovenians first".
During the campaign he formed an alliance with Mr Orban, borrowing his tactic of stirring fears about migrants. Slovenia, though, only accepted 150 asylum applications last year. During the migrant crisis most of those on the move used the Balkans and Central Europe as transit towards the West.
Another party that has condemned the EU's handling of the migrant crisis, the conservative Law and Justice party secured a strong win in 2015 elections.
Some of the party's most high-profile policies, such as taking control of state media and judicial reforms that allow the government to sack and appoint judges, have alarmed the EU.
Law and Justice was also behind a controversial law making it illegal to accuse the Polish nation or state of complicity in the Nazi Holocaust, which some saw as an attempt to whitewash the role of some individuals in Nazi atrocities
.Poland and Hungary have offered each other political support, such as over migrant quotas and Viktor Orban expressing "solidarity" with Poland in its battle over court reforms.
Elsewhere in Europe...
Immigration rules in Denmark are among Europe's toughest, reflecting the power of the right-wing Danish People's Party, who are the second largest party in parliament. Denmark allows its police to seize migrants' property to pay for their upkeep and has pledged to boost contraception aid to developing countries to "limit the migration pressure"
The Czech Republic's new Prime Minister Andrej Babis says recent elections in Slovenia and Italy show the stance of the Czech Republic, Poland, Hungary and Slovakia on immigration is spreading
The 2015 elections in Finland saw the right-wing Finns Party come second, although this year its candidate in presidential elections won just 6.9%
In the build-up to last year's election in the Netherlands, the anti-immigration Freedom Party of Geert Wilders had been tipped to win, but in the end came a distant second despite increasing their number of seats.
How populism emerged as an electoral force in Europe
Jan Kavan was one of the students who led the ill-fated pro-democracy uprising known as the Prague spring 50 years ago. He went on to be an MP and a senator, foreign secretary and deputy prime minister, and president of the UN general assembly.
Now 72, there is not much in politics he has not seen. “Populism of a kind,” he said, “has existed for as long as there have been politicians. It wins elections. But there’s populism and populism.
And some of the ‘pure populism’ we see now ... it didn’t exist here even 10 years ago.” At the turn of the century, populism was a blip on the horizon of European politics. Since then, the number of Europeans voting for populist parties in national votes has surged from 7% to more than 25%, according to groundbreaking research by the Guardian
Back in 1998, only two small European countries – Switzerland and Slovakia – had populists in government. Two decades later, another nine countries do. The number of Europeans ruled by a government with at least one populist in cabinet has increased from 12.5 million to 170 million. This has been blamed on everything from recession to migration, social media to globalisation.
But the Czech experience shows it can be more complicated than that. Only 2.3% of the country’s workforce is out of a job, the lowest rate in the EU. Last year, its economy grew by 4.3%, well above the bloc’s average, and the country was untouched by the 2015 European refugee crisis.
But in last year’s general election populist parties won just over 40%, a tenfold increase from 1998. The Czech Republic demonstrates that the factors behind populism’s surge are both far more complex and infinitely more varied than first thought,
and that a voter’s decision to cast their ballot for a populist party is just as often a reflection of psychological state as of circumstances and identity.
What is populism?
Populists tend to frame politics as a battle between the virtuous 'ordinary' masses and a nefarious or corrupt elite – and insist that the general will of the people must always triumph.
The Guardian is adopting the classic definition of populism proposed by political scientist Cas Mudde. Populism, he says, is often combined with a 'host' ideology, which can either be on the left or right.
Against the backdrop of increasing populist vote share and influence, the Guardian is launching a six-month investigative series to explore who the new populists are, what factors brought them to power, and what they are doing once in office.
Postwar populists found an early toehold in Europe in Alpine countries with long histories of nationalist or far-right tendencies.
The exclusionist, small-government Swiss People’s party (SVP), rooted in “authentic” rural resistance to urban and foreign influence, led a referendum defeat of Switzerland’s bid to join the EEA in 1992, and has swayed national policy since.Populist progress has been accompanied almost everywhere by a profound redrawing of Europe’s postwar political landscape and a continuing fragmentation of national votes. As the big mainstream parties of government have shrunk, the smaller parties – some of them populist but by no means all – have been getting steadily bigger.
The Swiss party practically invented rightwing populism’s “winning formula”: nationalist demands on immigration, hostility towards neoliberalism and a fierce focus on preserving national traditions and sovereignty.
It helps of course that Switzerland is also a magnet for the “international elite”, symbolised by Davos, banking secrecy and a spray of UN headquarters.In neighbouring Austria,
the Freedom party, a far more straightforward far-right movement founded by a former Nazi in 1956, won more than 20% of the vote for the first time in 1994 and is now in government, as junior coalition partner, for the fourth time.
Italy, another country with a history of radical rightwing politics, voted four times for the populist Silvio Berlusconi. But for the rest of the 1990s, the tendency remained confined to this central troika, each with their own political peculiarities.
The tide started to turn with the turn of the century. The political landscape in the Netherlands was shaken up in 2002 with the rapid rise of the populist Pim Fortuyn, and then by his assassination. That same year, Jean-Marie Le Pen of the far-right Front National rocked France by reaching a presidential runoff vote.
Twice in 2005, referendums in France and the Netherlands rejected a draft EU constitution, seen at the time as victories for the “ordinary people” against the European elite. In 2008 came the financial crisis and recession.
As many people, particularly in southern Europe, saw living standards shrink, the centrist parties that had governed hitherto – and the Eurocrats in Brussels with their clipboard austerity – became an obvious target.
Hit hardest of all by the crisis, the Greeks gave 27% of their votes to the radical leftwing populists of Syriza in 2012, electing them to government three years later with a score nearly 10 points higher.
In Spain, the anti-austerity Podemos took 21% in 2015 just a year after the party was founded. In Italy, decades of corruption, mismanagement and the impact of the 2015 refugee crisis resulted in the anti-establishment, tax-and-spend Five Star Movement sweeping to power last year in an unlikely coalition with the far-right, anti-immigration League.
More recently, western Europe’s solid inner circle has started to succumb to the populist wave. In Germany, the far-right, anti-immigration Alternative für Deutschland (AfD) – founded in direct response to Chancellor Angela Merkel’s assertion at the height of the financial crisis that there was “no alternative” to the EU bailing out Greece – has 92 seats in the Bundestag.
Le Pen’s daughter Marine made the second round of France’s presidential elections in 2017. Perhaps as remarkable as that, her first-round score was little higher than that of Jean-Luc Mélenchon of the surging populist leftwing group La France Insoumise.
In the Netherlands, Geert Wilders’ anti-Islam Freedom party (PVV) has risen to become the second-largest parliamentary force.The biggest advances have been made in central and eastern Europe. All four so-called Visegrád countries are governed by populist parties including Viktor Orbán’s Fidesz in Hungary
where populist parties secured 63% of the vote in this year’s elections – and Jarosław Kaczyński’s Law and Justice in Poland. Both parties only started showing their true colours – populist, culturally conservative, authoritarian – after they were first elected.
They are now attacking core liberal institutions such as the independent judiciary and free press, increasingly defining national identities in terms of ethnicity and religion and demonising opponents, such as the Hungarian-born Jewish financier George Soros, in language reminiscent of the 1930s.
Even in famously liberal Scandinavia, nation-first, anti-immigration populists have found their voice over the past decade. The far-right Sweden Democrats, a party with origins in the neo-Nazi movement, secured just 0.4% of the vote in 1998, but in the most recent election achieved a record high of 17.6%.
The Danish People’s party has been propping up a minority centre-right government since 2015. Mainstream Nordic parties have long resisted forming coalition governments with rightwing populists, but have been forced to give ground in Norway,
where the Progress party has been in government coalitions since 2013, and Finland, where the small Blue Reform party – an offshoot of the populist Finns – is also in coalition.
Across Europe, rightwing populist parties have also succeeded in influencing policy even when they are not in government, with parties such as Britain’s Ukip, the Sweden Democrats, the Danish People’s party, the PVV and the AfD dragging the discourse of their countries’ dominant centre-right parties to the right on subjects such as immigration.
Although this process has affected both the centre-right and centre-left, it is Europe’s traditional social democratic parties that have been hardest hit, haemorrhaging votes to the radical right and left.
It is a trend that looks hard to turn around: Germany’s once-mighty SPD is languishing at 14% in the polls, the French Socialist party scored just 7.4% in last year’s parliamentary elections, and also last year the Dutch Labour party won just 5.7%.Kavan’s Czech Social Democrats have fared little better.
As recently as 2006, the centre-left party was winning nearly a third of the national vote; its score last year was 7.3% and it returned just 15 MPs, down from 50 in 2013. Instead, nearly a third of Czech voters cast their ballots for the six-year-old Ano party. Ano means “Yes” in Czech, but is also an acronym for for Akce nespokojených občanů, or Action of Dissatisfied Citizens.
The party was founded and is still led by Andrej Babiš, the Czech Republic’s second-wealthiest citizen, worth an estimated £2.7bn, who owns two of the country’s biggest newspapers and was finance minister in the previous coalition government.
So what persuaded Czech voters to become a part of Europe’s populist surge? Underscoring populism’s many national nuances and variations,
Babiš – despite facing damaging corruption allegations – presents as a successful outsider, a businessman who can get things done in the way that career politicians cannot.
The Babiš pitch, said Vlastimil Havlík, a political scientist from Masaryk University in Brno, is that he has built “a big, highly successful corporation; that he is a businessman untainted by a long career in politics; and that he can simply run the place better –
make people better off – than the corrupt, cack-handed politicians”.Adding to the populist appeal, Babiš is a good communicator and has no apparent ideology beyond national efficiency – and maintaining his own popularity.
“He doesn’t have to be the best manager, just perceived as better than his rivals,” said Havlík. “First it was all: ‘These guys are thieves, they’ve stolen the country from you,’” said Ondřej Kolář, the young centre-right mayor of Prague’s sixth district. “Now it’s: ‘You can trust me, I will take care of your problems.’
And because the economy is doing well, he can afford pay rises for teachers, and public transport discounts for pensioners.” But the Czech Republic is a long way from becoming another Hungary or Poland, whose populist leaders are ramping up their efforts to turn courts into extensions of the executive and public radio stations into state propaganda outlets.
These two countries represent a grim warning of what can happen when nationalist populists of a certain ilk come to power. For the time being, though, back in Prague, Kavan remains optimistic. “It’s true that a measure of populism wins elections,” he said.
A Greek tragedy: how the EU is destroying a country
‘Now Greece can finally turn the page in a crisis that has lasted too long. The worst is over.’ With these triumphant words, Pierre Moscovici, the EU Commissioner for Economic and Financial Affairs, declared an end to the EU’s eight-year €289 billion bailout programme to Greece, the largest rescue in financial history.
Except Greece’s financial crisis isn’t by any means over — and the EU’s blithe and self-congratulatory announcement is a stain on Brussels’s moral authority. As a Greek property owner, a committed Grecophile and a disappointed Remoaner, I have witnessed with rising horror the slow water-boarding of the Greek population over the last eight years.
Every one of my Greek friends has a tale to tell of families under intolerable pressure, of parents forced to leave their infant children to seek work overseas, and of grandparents funding two generations of unemployed adults from their diminishing savings and from meagre pensions already savagely cut by the EU.
The EU has enforced a 25 per cent contraction in the size of the Greek economy during the last eight years (more severe than the great American depression of the 1930s) and its fiscal punishments have caused youth unemployment to reach a staggering 44 per cent.
In which economic textbook does allowing Greece’s debt to GDP ratio to grow (not reduce) from 120 per cent in 2010 (when it was already considered unsustainable) to 180 per cent by 2060 signal a return to economic normality?
Every rule in the book has been set aside in the EU-ECB-IMF troika’s cowardly decision to heap more loans onto an already insolvent nation.
Perhaps someone should have checked what was in his water glass when Mario Centeno, president of the eurozone group of finance ministers, said back in June: ‘With all these measures we can safely say that Greek debt is sustainable going forward.’
The evidence is everywhere to be found that Greece is slowly dying under its EU-induced euthanasia. At Easter, I spoke to newly ordained monks on Mount Athos — who have retreated to the Byzantine calm of the Holy Mountain to escape the agonies of modern domestic Greek life on the EU’s rack.
My neighbour, a fully qualified accountant who lost her office job in 2010, says her parents’ monthly pension was reduced from €980 to €600 last year under government cuts.
Her young daughter’s heart operation can no longer be under-taken at Corfu’s brand-new Ionian Islands hospital because its annual budget was recently slashed by 50 per cent. Greece isn’t the poorest member of the EU
— poverty rates are higher in Bulgaria and Romania — but it is close behind in third place, with over a fifth of the population now ‘severely materially deprived’ in 2015 according to Eurostat (up from 2 per cent in 2009 before the crisis began).
Whereas the figures have been dropping sharply for her Balkan neighbours, the rate for Greece has doubled since 2008 (to 22 per cent, against an EU average of 8 per cent).
The EU itself estimates that one in three Greeks currently lives ‘in a situation at risk of poverty or social exclusion’. These are shocking figures. Notwithstanding my deeply held support for the 60-year European integration project, it’s no longer possible for me to look away from the tragic toll being exacted on 11 million Greeks by the EU’s cruelty.
I have been forced to acknowledge that what Greece is enduring no longer meets the preferred explanation discussed around the dinner tables of northern, Protestant-work-ethic Europe: that Greece needed a harsh dose of corrective austerity in order to end for once and for all her Byzantine levels of corruption and clientilism.
Analysts estimate that some €230 billion (80 per cent) of the €290 billion eight-year rescue package has gone straight to European banks, bypassing the stricken Greeks altogether. As Yanis Varoufakis, the rock-star former finance minister and the bane of Brussels, has said: ‘Greece didn’t get a bailout.’
The bailout went ‘primarily to French and German banks’.Somewhere in all of this, a cardinal rule of international banking seems to have been forgotten. As a recent Bloomberg editorial recently put it: ‘Irresponsible borrowers can’t exist without irresponsible lenders. German banks were Greece’s enablers.’
The chances of Greece fulfilling the EU’s surreal 2060 projections must surely be negligible — the debt reduction and privatisation targets arbitrarily set by her puppet-masters will inevitably be blown off-course during the next recession, doubtless necessitating further cuts in Greek pensions and public services to save Brussels’s blushes.
Prime Minister Alexis Tsipras announced in early September a range of relief measures (raising public sector wages, cutting taxes and increasing welfare spending) but sceptical Greeks might be forgiven for dismissing these as pre-election manoeuvres.
Tsipras’s deeply unpopular Syriza government (in power since 2015) must face elections before next September and is significantly behind the main centre right opposition New Democracy in recent polls.
Even the IMF is not prepared to put its reputation behind the most recent EU announcements, having lost the argument against the EU’s unrealistic demands that Greece must run a budget surplus of 3.5 per cent of GDP until 2022 and 2 per cent thereafter (the country has only achieved a budget surplus on five occasions since 1945,
largely owing to low savings rates and significant capital flight, perhaps not altogether unconnected with long memories of the Greek population’s abysmal treatment in earlier debt crises). These demands are at best unrealistic and at worst plain sadistic, for an economy that has already endured eight years of EU-imposed strangulation.
Everybody, except the most obtuse Brussels bureaucrat, knows the problem could be solved tomorrow through the usual remedy of significant debt write-offs by the European banks. In this case,
Greece urgently needs some €150 billion (50 per cent) of its debt forgiven — and it’s a question of when, not if, these haircuts are finally achieved and at what cost to the welfare of Greece in the interim. It’s a fair guess that very few of the record 32 million tourists
(nearly three million of them from the UK) expected to have visited Greece in 2018 will be aware of the economic waterboarding that their smiling Greek hosts are currently enduring.
So why has the EU been so hidebound, so deaf to the appeals of reason and to the suffering of the Greeks? The reasons for this shameful situation appear to be some diabolical combination of the utter geo-political insignificance of Greece under Alexis Tsipras’s Syriza government and the Greek population’s remarkable resilience. The Greeks haven’t taken to the barricades with sufficient vigour to embarrass Brussels.
Perhaps that’s because the Greeks have grown accustomed to inhuman treatment at the hands of European governments. Four times in the last 200 years Greece has experienced national bankruptcy: in 1833, 1898, 1912, and most recently 2009.
On each occasion, a different set of European powers has prioritised the interests of their bankers (whose over-optimistic lending caused the problems in the first place) over the welfare of the Greek population, and on each occasion Greece’s national bankruptcy took a shockingly long time to resolve.
For Brexit Britain, the lesson of the last eight years is that Brussels is quite capable of inflicting policies of self-defeating pain on fellow Europeans if the victim is a small and friendless country on Europe’s boundaries.
Even so, the battered Greeks are rumoured to be seeking to take advantage of Theresa May’s Brexit frailties by requesting a few weeks back that we re-open negotiations for the return of the Elgin Marbles to Athens — and why not?
Greek austerity was wrong and Europe should learn from it
Commission President Jean-Claude Juncker has told European Parliament that the Greek bailout programme, which ended last month, was a success and “Greece is back on its feet”. But the eight-year programme may have caused more harm than good and can hardly be called a success, argues Stavros Papagianneas.
Despite the efforts of the EU and the Greek government to put a positive spin on it, it is hard to say that the austerity programme has been a success.On 20 August, Donald Tusk, president of the EU Council tweeted: “You did it! Congratulations to Greece and its people on ending the programme of financial assistance.
With huge efforts and European solidarity you seized the day.” In contrast, writing in the Washington Post on 3 August, Matt O’Brien, a former senior associate editor at The Atlantic, noted that “Greece has been one of the biggest economic failures you’ll ever see, short of a war or revolution. What Europe calls a success is an economy that has shrunk so much it looks war-torn”.
Under the supervision of the troika (EC, IMF, ECB), Greek GDP shrank by 26% – a decline comparable to the current crisis in Venezuela and during the Great Depression in the 1930s. Greek debt rose from 110% in 2010 to 179% today.
Many enterprises have closed down and senior citizens saw their pensions cut. Household incomes fell by over 30%, and more than a fifth of people are unable to pay basic bills like rent and electricity.
The unemployment rate also rose: from 12.7% in 2010 to 27.5% in 2013. Today it is 21%. Not because the economy is better, but because highly educated young people leave the country in big numbers and disappear from the statistics. Around 427,000 young, educated professionals – a group with more than 50% unemployment – have left the country.
The population is ageing much faster than the EU average. During my last trip to Greece, I spoke with young adults who struggle between staying unemployed, doing low-paying jobs or leaving the country. I wanted to know what it’s been like to grow up in these depressing circumstances and what their perspectives are for the future.
Konstantinos Psillas, 27, told me his parents had lost their jobs. “I had to work while I was studying and couldn’t participate in university programmes such as Erasmus. I feel that I am enslaved in a life of austerity without having made any mistakes myself”.
Other young Greeks shared similar stories. If they had the possibility to send a clear and loud message to EU leaders, the young people I spoke with would say that Europe needs to be revised. The EU has lost its meaning.
Austerity has killed the hope of many citizens for a better future. What was supposed to be a Union of principles, peace and equality brought impoverishment.
That millions of Greeks find themselves on the brink of poverty and social exclusion has been widely documented in recent years. They have paid heavily for the recovery programme.
However, fighting a crisis in such a way was a monumental mistake. Putting the burden on the weak countries already suffering from high unemployment and low growth rates led to more unemployment and slower growth.
If we add the state’s incapacity to reform then we have the perfect storm. The blind belief in austerity measures and the inability of Europe to cope with major crises, like those of the euro and the refugees, with a coherent and united voice are leading to further disintegration of the European project.
The economic pressure in Europe has stimulated racism and populism. No wonder that politicians like Salvini, Le Pen, Wilders and Orban are so popular. The primary disruptive element of the EU is its structure.
Originally built to become a real federation with its own institutions, it was rerouted by Paris when the French parliament rejected the creation of the European Defence Community (EDC) in August 1954.
At present, the EU is a free association of sovereign states designed to co-operate to achieve their shared aims. As such, the EU will implode if it doesn’t create federal European structures based on a real constitution with a strong parliament and a real government.
The citizens want a Union that is in a position to handle the big crises we are facing today. The EU needs to be reformed and we need it now.
End of Greek bailouts offers little hope to young
On Monday, Greece ends its third and final financial bailout programme, having received €289bn (£259bn; $330bn) over eight years. The government and its European lenders are keen to paint the end of the last bailout as a good thing, having avoided a "Grexit" in which the country would have crashed out of the eurozone into unknown territory.
But for many Greeks - especially the young - the damage has already been done. A recent poll indicates that three-quarters of the population think the country is headed down the wrong path. The same number think the bailout deals, rather than saving Greece, actually harmed the country.
Taxes remain high and more than 90% of Greeks believe the lenders will keep a close watch on the country's spending for years. Here's how the crisis played out.
Young hit hard
The crisis hit all parts of Greek society - but it was particularly hard on the young. Between 2008 and 2016 the country lost almost 4% of its citizens to emigration - more than 400,000 people. And while Greece didn't record the ages of those emigrating, the country is getting older.
The average (median) age has jumped by more than four years since 2008; and while those aged 20 to 39 used to make up 29% of the population, that's fallen to just 24%. Giorgios Christides is a Greek journalist covering his country for German news magazine Der Spiegel. Back in 2012 he wrote a piece for the BBC about his friends "fleeing Greece one by one".He says the economic improvements since the peak of the crisis in 2012 are not enough to have changed that. Greeks love their country, and many "would return the second they thought they could find a worthwhile job and good prospects back home", he says. Low wages and high taxes for the self-employed make those good prospects rare. Even a "best-case scenario" of a permanent job presents difficulties "if you want to leave your parents' home, have children, lead a full and meaningful life," he said.
Part of the reason for the exodus is a lack of job opportunities. Greece's unemployment rate peaked at 27.5% in 2013 - but for those under 25, it was more than double that, at 58%. Last year, more than four in every 10 young Greeks were still jobless.
Mr Leontitsis says he's followed her progress since.
She was excited to get a promising job in online sales, but the company's poor performance meant she lost that within six months. Since then, she has only secured a part-time job in a packaging firm - relying on her family to make ends meet. "When I wrote about Greece's lost generation, I meant exactly this," Mr Leontitsis says.
"[Young people] are disillusioned regarding job prospects in Greece. Scores of young people - among them many educated - have left the country aiming for a better future in other EU countries and beyond."
Today, he says, "the everyday reality of the country's youth remains extremely precarious".
Street protests broke out against the strict austerity measures, eventually turning violent, and even resulting in a handful of deaths. The unrest continued, while Greece's credit rating was downgraded to "junk" status.
More austerity followed the next year, and unemployment began to rocket. In 2011, the second bailout was agreed, this time for €109bn, later revised upwards to €130bn.Protests continued, and in politics, anti-austerity parties promising to reject spending cuts began making gains.
Youth unemployment peaked in 2013 at almost 60%. Anti-EU sentiment was displayed at many protests - from the burning of the EU flag to signs about Greece being a "colony" of German Chancellor Angela Merkel. In December 2014, the beleaguered Greek government finally collapsed.
At his 2017 State of the European Union address, President Juncker unveiled a roadmap detailing the main steps towards a more united, stronger and more democratic Union. Building on this, national leaders met in Tallinn, Estonia, and agreed on a Leaders' Agenda - a list of the most pressing issues and challenges for which solutions should be found, ahead of the European elections in 2019.
On 9 May 2019, at a summit in Sibiu, Romania, national leaders are expected to mark the culmination of this process with a renewed commitment to an EU that delivers on the issues that really matter to people. The Commission’s White paper of 1 March 2017 sets out possible paths for the future of Europe.
We face many challenges, from globalisation, to the impact of new technologies on society and jobs, to security concerns and the rise of populism.The White paper offers five scenarios for how the Union could evolve, depending on the choices we make. The White paper marks the start of the debate. Work continues in earnest on a clear path forward, ahead of the European Parliament elections in May 2019.
The reflection paper on the social dimension of Europe raises questions on how to sustain our standards of living, create more and better jobs, equip people with the right skills and create more unity within our society, in light of tomorrow's society and world of work. It does so by setting out three possible options:
Limiting the social dimension to free movement
Under this option, the Union would keep rules to promote cross-border movements of people in place, such as rules on social security rights of mobile citizens, on posting of workers, on cross-border health care and the recognition of diplomas.
However, there would no longer be EU minimum standards on, for instance, health and safety for workers, working and rest time, or maternity and paternity leave. Europe would no longer foster opportunities for Member States to exchange best practices in the fields of education, health, culture and sports, and social and regional reconversion programmes in the Member States that are co-funded by EU money would have to be discontinued or funded nationally.
Countries sharing the euro as a single currency could do more together in the social field to preserve the strength and stability of the euro area and to avoid abrupt adjustments in the living standards of its citizens. Other interested countries could participate as well.
While the centre of gravity for action in the social field should and would remain with national and local authorities, the EU would explore ways to further support Member State action, making full use of all instruments in its toolbox.Legislation would not only set minimum standards but, in selected areas, could fully harmonise citizens' rights across the EU, with the aim of focusing on social convergence in social outcomes.
A Sustainable Europe by 2030
Sustainable development is development that meets the needs of current generations without compromising the ability of future generations to meet theirs. It is a concept deeply rooted in European policies.
Over 40 years, Europe has put in place some of the world's highest environmental standards and ambitious climate policies, and championed the Paris Agreement. The Commission is now launching a forward-looking debate on sustainable development, as part of the broader reflection opened by the White Paper on the Future of Europe in March 2017.
The EU has all it needs to improve its competitiveness, invest in sustainable growth and spur action by governments, institutions and citizens, leading the way for the rest of the world.
Using the UN’s Sustainable Development Goals (SDGs) as a compass, the reflection paper identifies key enablers for the transition towards sustainability. It outlines three scenarios on how best to progress on the Sustainable Development Goals.
An overarching EU SDGs strategy to guide all actions by the EU and Member States
Here, the SDGs are endorsed at the highest EU political level, underpinning future policies and activities. EU institutions and Member States, including regional and local authorities, would work closer together to ensure better coordination.
An implementation process will be set up to monitor progress, setting milestones to deliver on by 2030. The SDGs will continue to inspire the Commission's political decision-making and guide the development of the post-EU2020 growth strategy, while not excluding other political priorities, and not forcing the work of Member States to reach the SDGs collectively and EU-wide.
This approach would leave more freedom to Member States, including regional and local authorities, to decide whether and how they adjust their work to deliver on the SDGs.
Putting enhanced focus on external action while consolidating current sustainability ambition at EU level The EU is a frontrunner on the SDGs in many ways. It could build on this experience by making more improvements and assisting other countries around the world to help make further progress.
The EU could decide to promote its environmental, social and governance standards more strongly through trade agreements and multilateral negotiations. The EU could also work even closer together with international organisations in pursuit of the same goals.
Mapping The Near Future: How To Build A Sustainable Planet
Mankind is faced with an existential question: Can we fix this mess in time? Sea level rise, ocean acidification, pollution of water, air and soil, mass extinction, a robotic future with fewer and fewer jobs for people. CO2 levels continue to climb, and with that global temperatures.
From a preindustrial level of 300 parts per million, we have already crossed 400, and with that a global increase of at least two degrees is already ‘baked in.’ To make a Game of Thrones analogy, while the Seven Kingdoms battle for primacy,
The White Walkers, awoken after eons of dormancy, are on the march to destroy them all. For us, “Summer is Coming” as the ice caps melt and the tundra begins to burp long trapped methane, a particularly potent greenhouse gas, into the atmosphere.
Will we be done in because we are as a species “all too human,” too petty, greedy, tribal, short-sighted, too wilfully ignorant, too afraid to act against a threat so monumental? This column is dedicated to those who are pointing the way towards a livable future.
I seek leaders in building sustainability at scale, people whose accomplishments and vision need to be celebrated, those who see what is becoming possible given the explosion of innovation we are experiencing in virtually every domain of human endeavor.
In the next 15 years, we will see an acceleration of advancements in energy, computing, transportation, housing, agriculture, infrastructure, medicine, material sciences, education, so that, in effect, the world can be remade.
That is ‘sustainability at scale,’ a comprehensive, integrated, 360 degree implementation of a grand plan for our collective survival. Many trillions will have to be invested globally to provide the basics of food, water, housing, transportation and employment to what will be 8.5 billion by 2030, up from 7.2 billion today, according to the UN.
It is estimated that it will cost $3.6 trillion just to address U.S. roads, bridges and tunnels, which recently received a D+ rating from the American Society of Civil Engineers. Build we must, and massively, and we need to do it consuming far fewer resources than we do today.
As Shelley Poticha, Director of Urban Solutions at the NRDC put it recently in a speech, when it comes to sustainability it’s “go big or go home.”
Sustainability is not merely the concern of environmentalists. It is a planetary goal that involves every field of human endeavor. As such, the necessary effort towards building a sustainable planet represents the largest economic opportunity in human history.
Now, are we evolved enough as a species to choose this path? Can we weather the exponential changes now upon us and render our desired future.
There will be massive dislocations. The world will become increasingly unrecognizable. But within this dynamic, we can remake our social, economic, and political relations, and our relationship to nature.
As we seek to map out a near future we’d want for ourselves, we need to learn how to become proper stewards of this earth.
Over the course of the next 52 weeks in 52 columns, I will be telling the stories of how, in various fields, how we can and must get from where we are to where we need to be, interviewing those among us now ‘colonizing the future,’ who are preparing the way for us, so that we in turn are prepared, so that this plausible future may become more possible.
Many fortunes will be made restoring and preserving the planet. Let’s get to work, and now.
What Is Sustainable Economic Growth?
Sustainable economic growth is economic development that attempts to satisfy the needs of humans but in a manner that sustains natural resources and the environment for future generations. An economy functions in the ecosystem. We cannot separate the economy from it.
In fact, an economy cannot exist without it. The ecosystem provides the factors of production that fuels economic growth: land, natural resources, labor, and capital (which is created by labor and natural resources).
Sustainable economic growth is managing these resources in a manner that they will not be depleted and will remain available for future generations. While many economists and people disagree about the importance of the environment regarding economic activity, the following facts are seldom disputed:
The extraction and depletion of natural resources, as well as pollution and permanent changes made to the landscape, are caused by economic activities and can do harm to the environment.
Many of the costs of the harm created by economic activities are not borne by those who cause it but by other people who neither obtain the benefits from the economic activity or agree to pay the costs related to it. Pollution is a perfect example.
Businesses are permitted to pollute to a certain degree (less now than in the past). They don't have to pay for the pollution, but society does by dirty air, water, and contaminated soil that affect the quality of our air, water, and food.
This pollution can lead to serious health effects, which may reduce the quality of life and health of the population. We call a cost borne by someone who did not agree to bear it an externality.
Humans live in an ecosystem and cannot survive without it. If we destroy the environment, we will eventually destroy ourselves.A large majority of traditional economists don't believe sustainability is a problem.
They believe that we can replace depleted natural assets with manufactured assets. Plastic can be used instead of wood, for example. They also argue that since prices are a good indication of resource scarcity, there is no sustainability problem because the prices for natural resources have been fairly stable.
Ensuring a rapid transition to sustainable economies in Europe is a challenge that requires bold leadership and strong commitment to action. But while we cannot improve – or even maintain – our well-being on a business-as-usual path, moving to sustainable economies offers huge opportunities.
What is WWF doing?
Finance is a critical cog of our economic system. WWF aims to change the way investments are made, bringing them into line with EU commitments like the UN 2030 Sustainable Development Agenda and its 17 Goals.
Such a shift includes both mobilising financial support for sustainable economic activities and discouraging or banning support for harmful ones. As a part of Sustainable Energy Investment Metrics Project, WWF is raising awareness among investors about climate risks and opportunities.
Public finance: Public financial institutions should lead by example and align their lending and investment policies with sustainability goals. WWF is working with European public financial institutions such as the European Investment Bank and the European Fund for Strategic Investments, and export credit agencies.
EU private investment policies and regulations: WWF is engaging with EU policy makers to achieve an ambitious EU sustainable finance strategy and ensure that private investment flows become aligned with the Sustainable Development Goals and the Paris Agreement on climate change and broader environmental and social issues.
This includes recommendations on disclosure, EU green bond standards, investors duties, role of supervisory authorities and mainstreaming of responsible investment practices. WWF wants to ensure that the EU Sustainable Finance Action Plan by the European Commission is bold enough and that it’s properly implemented.
Large European investors: WWF is engaging with European investors such as asset owners in order to help them adapt their policies, investment process and engagement on climate change risks and opportunities and related issues.
EU can lead the world in sustainable finance
The EU has a chance to become a world-leader in sustainable finance with the European Commission’s upcoming Action Plan, expected on 8 March. This would mean more money going into ‘green’ sectors and less into fossil fuels and areas which damage the planet and people’s wellbeing.
For this to happen, the European Commission must commit in the Action Plan to reviewing or creating several pieces of financial legislation. These must cover issues such as mandatory disclosure of the climate impacts of retail funds and mainstream indices (like the FTSE 100). Sébastien Godinot, Economist at WWF European Policy Office said:
“How money is spent has a huge impact on our planet. So we will be watching tomorrow to see whether the EU’s action plan on sustainable finance lives up to its name. Notably, we need transparency on how EU private investments impact our planet and if they fuel climate change.
“If the European Commission includes mandatory climate disclosure in its Action Plan, and follows the other key recommendations made by its advisory group in January - like making sustainability something all investors must take into account, and producing an EU classification of sustainable sectors -
the stage will be set for the transformation of Europe’s financial systems”, added Godinot. “This could lead to billions of euros worth of environmentally friendly investments in Europe.”
WWF asks the European Commission to include in its Sustainable Finance Action Plan:
EU mandatory climate disclosure for retail funds and mainstream benchmarks (such as MSCI World) and for companies and financial institutions;
Integration of sustainability into EU investor duties;
Integration of sustainability into EU financial supervisors’ (ESAs) mandates, and ESAs to provide guidance to financial institutions on how to use climate scenarios;
European standards for green bonds and labels, building on an EU sustainability taxonomy - a classification system of sustainable sectors;
Investment advisers required to ask about and respond to sustainability preferences of retail clients.
The Commission has also today committed to a few welcome steps to begin that overhaul, such as ensuring those responsible for financial assets take environmental, social and governance issues into account.Only once sustainability is integrated into the EU’s financial regulatory and policy frameworks, and private capital flows are rerouted towards sustainable investments, will Europe’s finances promote truly sustainable development. What next?
The Commission must produce in early 2018 an ambitious EU integrated sustainable finance strategy with a three year work plan, building on the recommendations of its High-Level Expert Group on Sustainable Finance.
This will help transform today’s welcome signals into meaningful changes.” Amongst other measures, the Commission will clarify that fiduciary duties of asset owners and asset managers include Environmental, Social and Governance (ESG) issues, ensure that sustainability is more central to corporate governance and promote better integration of ESG performance in issuer credit ratings and key market benchmarks.
The Commission also commits to working on the integration of sustainability and ESG criteria in rating methodologies and verification systems (such as in green bonds), in supervisory processes as well as investment mandates of institutional investors and asset managers and take sustainability considerations into account in upcoming legislative reviews of financial legislation.
The Commission can start right away to ensure that future legislative proposals, such as the personal pensions proposal (PEPP) and alternative investment funds managers directive (AIMFD) integrate environmental, social and governance issues – including a definition for these issues.
The momentum is great for bold commitments of the Commission on sustainable finance, with the FSB Task Force on Climate-related Financial Disclosure, the EU High Level Expert Group on sustainable finance and several financial places in Europe launching green finance initiatives.
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