“Everything under heaven is in utter chaos; the situation is excellent” (Mao Ze Dong)
In the UK, Brexit uncertainty has, and will, continue to weight on the Pound. In the Eurozone, a series of elections in France, Germany and the Netherlands will impact on the Euro. These elections could have profound effects on European politics and the economy, and will act as a barometer of anti-EU sentiment. This is due to the increasing popularity of far-right populist parties which have been advocating withdrawal from the EU, while building an agenda tainted with hatred against immigrants. Europe, and the rest of the world, is in crisis, but a crisis poses an excellent opportunity to change, both EU technocracy and nationalist populism.
Pound and Brexit
The Pound has been volatile since the Brexit vote. It fell sharply after the EU Referendum and after news of a hard Brexit.
On Friday (16 December), a German official said that a trade deal between the UK and EU can’t be reached within the two-year deadline, during which, the Brexit negotiations will also have to be conducted. While the Chancellor, Philip Hammond, rejected the possibility of a decade-long trade deal, this, however, won’t be a straightforward decision between two countries, but one between the UK and the other 27 EU member states. It’s a process that will be costly and lengthy.
As the Financial Times pointed out, the UK-EU divorce will cost Britain €20bn (£18bn) to leave the EU, plus the UK’s share of the EU’s unpaid bills and pension liabilities. The EU’s unpaid bills were €218bn in 2015, while the EU’s pension liability amounts to €59bn. The problem will be agreeing how much the UK needs to pay for its share. A German magazine, Wirtschaftswoche, has suggested that Brexit costs could reach €25bn. More recent reports suggested as much as €60bn (£50bn).
In terms of public finances, the government borrowed £12.6bn in November, but this will worsen the coming year, according to the Office for Budget Responsibility.
The mounting uncertainty over the Brexit process, limited investment plans, slow wage growth and rising inflation will noticeably change the economic horizon in the new year.
European Eurosceptism and Upcoming Elections
In the new year, Europe will be shaken by a series of elections: the Dutch general election (15th March 2017), France’s presidential election (23 April and 7 May 2017) and Germany’s federal election (27 August and 22 October 2017).
Dutch general elections
The Netherlands’ general elections in March 2017 will determine the character of the next government. The biggest threat to the Dutch government, the European project and liberal ideas comes from the Party for Freedom, a nationalist, right-wing and Eurosceptic party founded in 2006. The party wants to limit the numbers of Muslims in the Netherlands, ban the Koran, close all mosques and asylum centres and withdraw from the EU. Since 2012, it has been calling for a Nexit; a Dutch exit from the EU. Geert Wilders, aka “Mozart”, due to his platinum blonde hair, is the Dutch founder and leader of the party. He sees himself as a right-wing liberal, but he dissociates himself from France’s Le Pen or Austria’s Freedom Party leader, Jörg Haider. Despite that he shares similar ideological beliefs with other Eurosceptic parties, Wilders says, “We'll never join up with the fascists and Mussolinis.”
Wilders was predicted to win 29 out of 150 seats in the new parliament, but commentators believe that mainstream parties wouldn’t accept him as their coalition partner. The election is possibly going to be a coalition of four or five centre right and centre left parties. However, according to Maurice de Hond’s last poll of 2016 (18 December), the current Prime Minister Mark Rutte of the People’s Party for Freedom and Democracy (VVD), is in danger of losing 18 seats from Geert Wilders and his Party for Freedom (PVV). The PVV is leading by 13 seats and Wilders would get 36 seats in the 150-seat Dutch Parliament. The two largest parties in parliament are the liberal VVD, holding 41 seats, and the social democratic Labour party (PvdA) with 38 seats.
Wilders’ party is gaining momentum due to the refugee crisis and the Dutch people’s dissatisfaction with what they see as the “European elites.” Like the Brexit voters, many Dutch people are demanding their sovereignty back.
According to The Wall Street Journal, the anti-European threat is also being boosted by two other Dutch far-right figures: Thierry Baudet, a young right-wing Dutch academic and publicist, and Jan Roos, a Dutch journalist. In 2015, Roos was the campaign leader for GeenPeil, a political initiative run by GeenStijl, a Dutch, right-wing and xenophobic weblog. GeenPeil had supported UKIP’s Brexit campaign and Jan Roos was at the “Battle of the Thames” with Nigel Farage. The campaign called for an advisory referendum on the Ukraine-European Union Association Agreement and asked whether the EU should work more closely with the Ukraine. But the central theme of the campaign was Putin. “Yes” backers see Putin as an aggressor and want to support Ukrainians. Those who oppose the treaty and voted No, like the far right, Geert Wilders, support Putin. They believe that Russia’s concerns about NATO and EU encroachment are valid.
GeenPeil wrote that the vote is “about the direction the EU is heading. Yes, Putin would like to see Europe fall apart. But if you ignore the verdict of voters time and again…you are to blame for the collapse, and not Putin.”
The Dutch government agreed to accept the results of the Ukraine referendum, which gave a further boost to Eurosceptics, but it hasn’t implemented it yet. In 2015, Baudet started a think tank, “Forum for Democracy” whose mission is to use referenda and direct elections of mayors to improve democracy, return all power to Holland and away from the EU.
The Wall Street Journal has described the Dutch Eurosceptics as “the EU’s New Bomb” that might deliver the fatal blow to the European dream.
French Presidential election
François Fillon, who served as Prime Minister from 2007 to 2012 under President Nicolas Sarkozy, is the current nominee of the centre-right party The Republicans for the 2017 presidential election. The French Prime Minister Manuel Valls (2014-2016) will also be a candidate for the presidential election, representing the Socialist party. There’s also the far right National Front’s (FN) Marine Le Pen, who is considered a front-runner. She is the leader of FN after her father and founder of the party stepped down five years ago. Emmanuel Macron, a centrist and the economy minister under Socialist president François Hollande, is another candidate who is gaining in popularity. In a poll on Tuesday (20 Dec.), Macron was rated the most popular of 25 leading politicians with 35 percent approval rating.
However, opinion polls on who’s going to be the next president show Fillon and Le Pen in the first and second places respectively, with Fillon the likely winner in the second round run-off vote on 7 May 2017.
Marine Le Pen poses a legitimate threat to the French government, and the French Minister Manuel Valls has said that she might win next year’s presidential election, after Donald Trump’s shock win in the US. As Le Pen herself said, Donald Trump “made possible what had previously been presented as impossible.”
Valls warned of “the danger presented by the extreme right” by saying that, “If she does make it to the second round she will face either a candidate of the left or the right. This means that the balance of politics will change completely.”
Le Pen’s National Front is a nationalist party that advocates protectionism, conservatism, and right-wing populism. It is anti-European and has a strong anti-immigration stance. In its 2001 programme, the party associated crime to immigration which it defined as the “mortal threat to civil peace in France.” The party was founded in 1972 with Jean-Marie Le Pen as the leader. Le Pen was known as the “Devil of the Republic” by media and was called the “last samurai in politics” by his supporters. He advocated immigration control, the death penalty and Eurosceptism. He left the party after he had said the Holocaust was but “a detail of history.” His daughter has tried to dilute her father’s extremist ideas, but it’s her opposition to immigration, Islam and the EU that have gained her prominence.
She promised, or rather “threatened,” that if she became French President, Donald Trump, Vladimir Putin and herself “would be good for world peace.”
Angela Merkel, the Chancellor of Germany, will seek to be re-elected for a fourth term in the 2017 federal election. But she will be competing in a climate where far-right extremism is on the rise, immigration has become a heated issue and the recent domestic attack at Berlin’s Christmas market is exacerbating fears of foreigners. She has come under attack due to her “open door” stance to immigration policy, but she remains a moderate and reliable candidate. The far-right party Alternative for Germany (AfD) is gaining increasing popularity for its anti-immigrant policies. But many believe, that there will be a coalition between Merkel’s party, the Christian Democratic Union (CDU), and the Social Democratic Party (Sozialdemokratische Partei Deutschlands, SPD) to remain in power.
Frauke Petry’s party, the AfD, doesn’t pose any immediate problems. Petry’s rise has coincided with a shift within her party from an anti-European sentiment to an anti-immigration nationalism with racist undertones. She has asked for the German Nazi idea of "völkisch" (of belonging to a race) to be revalued. At an AfD event in Stuttgart, Petry asked: "What should we think of all these ‘Germany is multicolored’ campaigns?” She replied: "A compost heap is also multicolored." She has also suggested that the German border police should shoot at refugees when they enter illegally. She remains a controversial figure, known to her enemies as “Adolfina,” and is a thorn in Merkel’s and Germany’s side.
The problem with Europe and the Far-Right’s Seduction
The popular (and not populist) Slovenian philosopher, Slavoj Žižek, has put the issue plainly and clearly. People are dissatisfied with elites, powerful corporate and established institutions and are asking for change. Unfortunately, because there isn’t any strong democratic opposition to express their view, their demands and cries for change are appropriated by the far-right, which has its own agenda. For some critics, both the far-right’s nationalist and anti-immigration project and the jihadists’ anti-western violent dogma, desire division and an intensification of hatred, so that they can thrive and continue their work.
For Žižek, “Europe is caught into a vicious cycle, oscillating between the Bruxelles technocracy unable to drag it out of inertia, and the popular rage against this inertia, a rage appropriated by new more radical Leftist movements but primarily by Rightist populism.” If the peoples’ demand for change is expressed in democratic terms and a language that avoids hatred, then it’s possible to drive the force for transformation towards positive changes and not deadly prejudices and violent sentiments.
From Trump and Farage to Wilders, Le Pen and Petry’s supporters, people believe that the only way to take back control is by escaping Brussels’ bureaucratic control or existing neoliberal structures. But the paradox of this desire is that people end up submitting to a more radical and ruthless logic: that of global capital and neoliberal economic policies that have no regard for human dignity. This, combined with right-wing extremism, introduces a lethal combination that will be explosive: first, by shocking the economy, and, most importantly, hurting democracy and the people.