Economic crisis fuels continuing political crisis in Europe

By Bob Clarke

The political impact of the economic crisis in Europe has entered a new phase. When the economy was contracting virtually all parties implementing austerity policies were thrown out of office or at least experienced a large drop in their support. In the more recent period of economic stagnation, the same economic policies have the effect of shifting the burden of the crisis onto workers and the poor while capital benefits, boosting the incomes of the very rich and allied layers.

The political effect is twofold. In office, traditional parties of the right are losing support to far right and even fascist forces, and traditional social democrats see an outright collapse in their support. Out of office, the mainstream bourgeois parties are also in crisis, and shifting further to the right. Some of the social democrats have been able to hold on to their support in opposition partly by adjusting very slightly leftwards, at least in terms of rhetoric.

In Sweden, the Social Democrats and Green have been able to form a minority coalition government for the first time since 2006. Although their vote was unchanged on a combined 38% the mainstream rightwing coalition has been ousted after the Moderates lost 7% of the vote to the far right Sweden Democrats, which was the only big change of allegiance. The refusal to form a coalition including the Left Party and the failure of the Feminist Initiative to gain parliamentary representatives means that the minority government is unstable and unlikely to see out a full term. The very important gesture of deciding to recognise the Palestinian state will certainly provoke US efforts to make sure that is the case.

Economic policy

The key fault line is that the left has no programme to deal with the relatively mild economic crisis that Sweden has experienced. Already, a proposed tax on bars to fund public sector jobs is being abandoned and a decision to suspend the purchase of fighter jets has been reversed. The Swedish economy remains very weak because there has been no sustained resumption in investment, which fell back in 2013 even though the economy’s size has long surpassed its pre-recession level. Tinkering with minor taxes will have no effect when very large state intervention is required.

The early retreat even on these measures, as well as the significant reversal of the Greens’ policy of abandoning nuclear power may turn into a rout. It is possible that the racist far right will be the main beneficiary of a shambolic left government, as has been the case in France.

In France, the governing Socialist Party is fracturing under the weight of its own austerity policies. Hollande’s approval ratings are at an all-time low for a President and the expulsion of his left critics from the cabinet has allowed a further shift to the right. The ex-ministers may be more concerned with jockeying for the Socialist Party’s nomination for the next presidential race than actually formulating an alternative to austerity, but their verbal assault has echoes of the criticisms made by the Front de Gauche and others.

This is not the first split in a ruling social democratic party implementing austerity in the current crisis, but it is perhaps the most significant given France’s economic and political weight in Europe. There have been departures from both PASOK and the Irish Labour Party who are both polling in single digits and face meltdown in elections currently scheduled for 2016.


There have been overblown predictions for the terminal decline of European social democracy even before this crisis began. It is widely asserted that support for social democracy fell in the latest European parliament elections. This is untrue. Courtesy of the Renzi honeymoon in Italy and the recovery from historic lows in Britain, the social democratic vote was unchanged.

But the popular verdict on left parties that implement austerity, is far more severe as their support plummets. Worse, this is not being replaced with a surge in support for parties to the left of social democracy, although in some countries these have made impressive gains. With racism being whipped up against scapegoats, the big gainers have been the parties of the far right and fascists in Europe as a whole. In France, in the fascist FN top the polls and they were recently able to gain Senate seats with the support of mainstream parties.

Social democrats can hold on to their vote in opposition if voters believe they offer a genuine alternative. But if disappointment sets as they implement austerity and as economic stagnation and falling living standards continue, and these problems falsely attributed to issues of race, the main beneficiary is the far right and the fascists. Only a clear economic policy that produces growth and rising living standards can offer a way out of the crisis. Only by opposing their racist mythology can you defeat the far right.

The lessons for the British Labour Party are clear. The Tories are losing votes to their right and cannot win. But Labour has already seen its substantial poll lead in 2012 disappear as its intention to implement austerity became increasingly explicit, yet its support grows when it defends living standards. Without pro-growth policies, the best hope of victory remains the continued long-term decline of the Tory vote. But the racist UKIP is the main beneficiary of the Tory crisis, having previously corralled the fascist BNP vote.

In general, Labour governments tend to lead to increase in confidence of workers and the oppressed that struggle can be successful. But a Labour government which implements vicious austerity whilst promoting racism will provide an enormous boost to UKIP. It may not even survive long if it is forced to form a coalition. There may be new minority formations arising to the left, or existing current may grow rapidly in opposition to austerity, war and racism.

In Europe and in Britain the economic crisis will continue under austerity policies. Politically, the traditional parties of the left will be huge casualties if in office they maintain this framework. Aided by the racism whipped up by the mainstream parties, the principal radicalisation in Europe at present is to the right, with only a minority initially moving to the left. The far right must be combated in the immediate period ahead, and that requires attacking its racism. At the same time socialists should advance the policies which can restore growth and living standards for the majority.