Rise of Radical Parties Challenges Eurozone Efficiency

In recent years, the new radical right’s political discourse has attracted voters across Europe and experienced a substantial increase in electoral support.

Unlike radical right parties throughout history, the ‘new’ radical right lacks a homogeneous and unifying ideology; they operate within constitutional frameworks and do not wish to replace liberal democracy with authoritarian regimes. Nevertheless, these parties adopt a strict anti-elitist stance, heavily criticizing the mechanisms of modern democracies and invoking strong feeling of ethnic nationalism leading them to strongly condemn domestic immigration policies. The Economist even referring to them as “Populist Insurgents.”

The rising appeal for populist parties could see some winning elections and mainstream parties forced into previously unthinkable alliances. EIU believes that Europe is facing a crisis of democracy, whereby a gap between elites and voters is resulting in low turnouts at the polls and sharp falls in membership of traditional parties.

This is a highly destabilizing factor for European politics as the fragmentation of voters makes it extremely difficult to form domestic single-party governments with a parliamentary majority. Examples include the rise of Syriza in Greece and Podemos in Spain, which will both have to strike coalition deals with other parties if they want to govern.

Mainstream Parties Also to Blame

Conventional political parties share part of the blame for their decline in popularity. For the past two years, European leaders and officials have been declaring the economic crisis to be officially over and the entire region in a period of recovery. In the last six months, however, doubts have resurfaced with dangers of stagnation and deflation looming over European economies.

Public support for the ‘European project’ is declining as constant promises of growth and new jobs are being broken. Economic insecurity and uncertainty are curbing feelings of equality and solidarity simultaneously fueling increased individualism.

Not to mention the widespread corruption cases and illegal party funding, which have augmented feelings of distrust for politicians among the population, who believe that their interests are not being appropriately represented. Pawel Swidlicki (policy analyst at think tank Open Europe) told CNBC that the rise of such parties is a manifestation of European leaders being out of touch with many voters and their concerns.

Voters will be going to the polls with national issues on their minds, including austerity, immigration and the merits of the single currency.

Radical Momentum

Non-mainstream or non-conventional parties have been able to exploit Europe’s economic downfall by adopting anti-establishment messages and proposing unorthodox economic policy measures. This is a simple political strategy whereby these radical insurgents appeal to popular demand of change and reform by appearing as the ‘true’ representatives of the people. The question here is to evaluate whether the leaders of these ‘non-conventional’ parties are truly driven and pursuant to norms of peace, liberty and equality or whether they are simply catering to the economic and political needs of the electorate worst hit by the financial crisis.

Greek Elections Spill-Over

Populist parties (both left and right) are expanding across Europe. These could be heavily boosted by a Syriza win in Greece this weekend. Opposition to governance from Brussels, immigration and austerity are key themes that have rallied populist parties from all over the region in support of one another. Being the first anti-establishment party to come to power in Europe’s history, a potential victory for Syriza would help boost euro-skepticism and encourage anti-establishment sentiment across the eurozone- leading to even greater political disruption and potential crises, according to the EIU. Podemos in Spain would be hugely encouraged, together with Beppe Grillo’s ‘Five-Star Movement’ in Italy, Le Pen’s National Front in France and Sinn Fein and Gerry Adams in Ireland.

Political Uncertainty

The rise of radical parties will make Europe’s governance even more complicated than it already is. History teaches us that right-wing populist parties do not produce productive policies. Non-mainstream party members lack in governing experience, which, in turn, is reflected in their ability to turn electoral program into policy. More parties will lead to greater internal divisions at the European level, with each party fighting to consolidate power. This will increase the level of policy improvisation, which could limit Europe’s response to economic shocks.

Eurozone Economy

Financial markets are not ready for Europe’s political uncertainty. Resurging national sentiments in 2015 could cause an increase in politics-driven market volatility, posing a threat to an already fragile Europe.

A major fear is that the Syrzia strategy fails and negotiations between Germany, Europe’s most powerful economy, and Greece crash. Germany could decide to block Syrzia from implementing its own economic program out of fear that it will deteriorate the fiscal condition of the country and cause turmoil in international financial markets.

Economists warn that a Greek default would undermine confidence that any other indebted European country will be able to meet its obligations, having negative financial repercussions. Political instability and uncertainty could cause investors to lose confidence as they did in the run-up to the last financial crisis.

Analysts have already predicted an increase in the range of anti-establishment populist parties growth in 2015. Leaders both at the national and European level will be forced to learn to cooperate with in order to produce pragmatic economic policy.


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