Reports from Europe: The populist threat to European institutions.

Author:Milner, Henry

A comparative advantage of Inroads is our network of experts with links to Canada based in many countries where important developments are taking place. This network has allowed us to provide ongoing coverage of the emergence of populism and the resulting erosion of the left-right division that has characterized modern democratic politics. Populist leaders rally the people against outsiders. Traditional parties adapt to the new identity politics or fall by the wayside.

Thus, in December 2017, Heinz-Christian Strache, head of the populist Freedom Party, became Vice-Chancellor of Austria as his party entered a coalition with the conservative People's Party led by Sebastian Kurz, the new Chancellor. And in the nearby German state of Bavaria, the once-mighty Social Democrats, the party of Willy Brandt and Gerhard Schroder, won a dismal 9 per cent in an October 2018 election. Each of the five European countries addressed in this section manifests this development in a different way.

One is Italy, which still manages to surprise us. In the context of a continuing stagnant economy and huge debt load, Italy is now ruled by an unlikely coalition of the populist left and the populist right, which in March 2018 replaced the centre-left government of Matteo Renzi. As Giorgio Malet puts it, Renzi's economic and political reforms--specifically the 2014 labour market reform passed despite large-scale mobilization of the unions and the constitutional reform rejected in a referendum--"gave false hope to international observers even as they alienated Italian voters." The new government is composed of the Five Star Movement (FSM) led by Luigi Di Maio and the now nationalist League (formerly Northern League) led by Matteo Salvini.

The politicization of the migration issue has so far benefited the League, which as of this writing leads in polls, its success pushing FSM supporters to oppose open immigration. Russian interference in Italian politics, in the form of stoking anti-EU views, has furthered this process. As Giorgio notes, in preparing its budget for the coming year, this coalition of two parties with irreconcilable fiscal policies will be tempted to engage in a symbolic fight with a common enemy, the European Commission, over the deficit spending cap. The only thing that may hold them back is a fear that investors might not continue to further finance Italy's massive public debt. Failure to resolve this dilemma, he concludes, could test "the very...

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