Anti-system MEPs surge in the European Parliament: how will EU leaders respond?

Open Europe has today responded to the preliminary 2014 European Parliament elections results. Please note that these figures are based on a combination of final results and some projections so could still be subject to change. However, we do not consider any substantial swings likely.

Here are the key points:

• Share of anti-EU and anti-establishment vote is slightly higher than expected with such parties collectively on course to win 229 out of 751 seats in the new European Parliament (30.5%), up from 164 out of 766 seats in the current parliament (21.4%).
• European Parliament politics are set to become more unpredictable though the anti-EU and anti-establishment block remains incoherent and the two main groups will continue to dominate.
• The share of MEPs dedicated to free market policies drops, from 32% to 28.1%.
• Compared to 2009, overall turnout stayed flat despite more powers for MEPs in the Lisbon Treaty and the EU becoming a high-profile issue in the wake of the Eurozone crisis.
• Several anti-incumbent parties in the EP for the first time, ranging from Feminist Initiative in Sweden to Spain’s new leftist movement Podemos, founded as late as March 2014.

 The rise of anti-EU and protest parties on the left and right will make European politics more unpredictable but, paradoxically, it could also strengthen the resolve of the three mainstream groups to continue to vote for more Europe in the European Parliament, in order to freeze out the anti-EU contingent (click on the pictures to enlarge).

The temptation in Brussels and national capitals will be to view this as the peak of anti-EU sentiment as the eurozone crisis calms down and the economy improves. This would be a huge gamble. The make-up and reasons for the rise of these parties are complex, but it’s clear that the best way to cut off their oxygen is to show that the EU can reform itself and respond to voters. These elections are a clear warning: offer voters a polarised choice between more Europe and no Europe and sooner or later they will choose the latter.

David Cameron now faces a seriously tricky week. He has two main challenges. First, he will try to muster enough allies to block Jean-Claude Juncker, the front-runner for European Commission President, although it’s not looking overly promising. Second, he faces the dilemma of aligning himself with more nationalist parties to secure his party’s standing in the EP, which comes with the risk of alienating his natural allies on the centre-right who will be crucial in his bid to achieve EU reform.

EU leaders will meet tomorrow evening to discuss what to do next and how to negotiate with the new parliament. It might not be pretty.

What does Wilders' defeat in Dutch euro elections mean?

For various reasons that we don’t quite understand, most of the UK press has deemed it illegal to report on the exit polls from yesterday’s European elections in the Netherlands - with the exception of the Telegraph and the Guardian. The Netherlands is the only country to conduct exit polls ahead of Sunday night (10pm GMT roughly) when the results from all 28 EU countries are announced.

Geert Wilders’ Freedom Party (PVV) took a clear a beating. If the exit polls stand, the party will have dropped from 17% in 2009 to 12.2% this time around, translating into a loss of 1 seat (the PVV had 5 seats in the last parliament but one MEP defected). This is no doubt an unexpectedly bad result for Wilders.

Source: Ipsos

Wilders’ defeat has given rise to a hilarious conspiracy theory in Brussels that the UK media isn't reporting on the Dutch elections since the result doesn't conform to its alleged anti-EU bias. Apart from the fact that the BBC and others genuinely worry about breaking the law (even though it’s a ridiculous law) this is also a wrong reading of the results.

Wilders screwed up. His controversial comments about Moroccan immigrants caused him real damage. Three of his four sitting MEPs even refused to campaign as a result. But to see this as a victory for the EU status quo in the Netherlands is pretty heroic.

- The strongly Eurosceptic Socialist party gained an extra 3% of the vote, translating into 1 extra seat, which sees it overtake the established centre-left PvdA. Together with the PVV, these strongly EU-critical parties are set to win 22.2% of the vote.

- While it's difficult to know what to read into this result, the parties that we've dubbed “critical reformers” have done relatively well. Prime Minister Mark Rutte's VVD party maintained a respectable share at 12.3%, despite leading an unpopular government, while the Christian Union/SGP increased its share by a percentage point. 

- The two biggest victors are the D66 liberals and the CDA, which are vying for first place on just over 15% of the vote. These parties are clearly pro-EU - and D66 is doing a lot of good work in the EP - however, please do resist the temptation to see this as an endorsement for more EU integration. Firstly, the D66, the great winner of this election, called on a freeze for transfer of powers just before the election, prompting Foreign Minister Frans Timmermans to post on his facebook page "D66 is suddenly also 'very euro critical'". Meanwhile, the CDA vote of 15% is down nearly 5% on its 2009 vote. It would be just as plausible to see the D66 and CDA vote as anti-incumbent vote against the PvdA-VVD coalition government.

- Lastly, turnout in the Netherlands remained stable, but at an incredibly low 37%. With Europe so much more in the headlines over the last few years and the Lisbon Treaty giving MEPs more powers, why in the world hasn't turnout gone up dramatically if it's true that more EP powers and greater awareness will lead to greater voter engagement?

These results certainly present a mixed picture. Wilders' failure to translate his polling into votes is notable but whether this pattern will be repeated elsewhere (in France, for example) remains to be seen - and probably has much to do how badly his campaign went.

What does Alternative für Deutschland really stand for? Its getting hard to tell

Beatrix says change direction - but where to?

When the anti-euro Alternative für Deutschland was first founded, it was derided as a fringe party for professors obsessed with ordoliberalism that would struggle to make a lasting impact on the German political scene.

However, the party got within 0.3% of the vote of winning seats in the Bundestag in September and is polling at around 6%-7% ahead of the European elections, meaning it looks certain to win seats in Brussels/Strasbourg. Yet the party's relatively strong showing in the polls masks serious internal divides along personnel and policy lines.

At the start of the year, it was being reported that some founding members were leaving in disillusionment in the belief that the party was abandoning its liberal roots and embarking on a sharply 'rightward' trajectory, which was manifested by the embracing of traditional Christian moral values and taking a tough line on immigration - AfD were notably the only mainstream German party to praise the results of the Swiss referendum on curbing free movement.

Initially, it seemed that this shift to the 'right' was limited to social policy, with AfD still maintaining its liberalism on economic policy; Hans-Olaf Henkel - the former head of the Federation of German Industries - described it as "Germany's last liberal party". However, this also seems to have been consigned to the past following the party's convention over the weekend at which it voted on its manifesto for the European elections.

Crucially, the party's grassroots voted to reject the EU-US free trade deal (TTIP) currently under negotiation despite strong support from the leadership including party leader Bernd Lucke, who argued that it was a "positive, constructive objective which is very much in Germany's interest". Beatrix von Storch (pictured), an MEP candidate and high profile AfD activist - who for many epitomises the party's recent lurch towards conservatism - argued that the agreement "is not fair and will burden our country".

Interestingly, when it came to the recent events in the Crimea, the party's deputy federal spokesperson criticised the independence referendum but also called for greater "understanding" for Moscow and described the interim Ukrainian government as "not democratically legitimate". A motion was passed (to thundering applause according to FAZ) rejecting German taxpayer assistance for Ukraine and economic sanctions on Russia.

Such sentiments - scepticism of free trade deals (or 'directed trade' as libertarians would say) and emphasises on isolationism in world affairs, puts the AfD closer to either the American "Old Right" (which Europeans tend not to even remotely understand) or the European Socialist Left.

So what does all this mean? Well it seems that AfD are at risk of becoming a catch-all populist party with strongly ideologically contradictory factions rather than one which can be easily placed on the traditional 'left/right' axis. This applies to a number of other European parties which combine elements of both including the National Front, PVV, the (True) Finns party and UKIP (although UKIP economic policy is more liberal than the others'). It also shows that those Tories keen for AfD to join the ECR group in the European Parliament may wish to pause for thought.

To some extent this is not surprising given that even in its early stages the party paradoxically drew disproportionate support from former FDP and Die Linke voters. We also noted after the elections that the party had done particularly well in Eastern Germany, which tends to vote more heavily for left-wing parties than West Germany. In the East, AfD has also struggled to contain creeping take-over attempts by more nationalist elements.

The question for the party is where does it go from here: does it establish itself as a permanent protest party borrowing ideas and policies from the political smorgasbord as it sees fit  - there is clearly a gap in the market - or does it try to remain a genuine economically liberal party angling for a spot in the mainstream?

Are anti-euro sentiments brewing in Austria?

Last weekend in Austria, "Team Stronach", a newly-founded political party which aims to abolish the euro in its current form, did quite well in two regional elections, winning 9.8% in the state of Lower Austria and 11.3% in the state of Carinthia.

The party was founded by Austro-Canadian billionaire Frank Stronach (pictured) who wants eurozone countries to have their own currencies whose value would fluctuate in line with their fiscal and financial strength (while toying with the idea of keeping the euro as a parallel currency). Although Stronach reacted by saying that "you always expect more", the party "passed the litmus test", according to David Pfarrhofer of the ‘Market’ polling institute.

This year, it's Superwahljahr (Super Election Year) in Austria with two more regional elections coming up in Tirol and Salzburg, and general elections on 29 September, with Stronach stressing that he is "very optimistic". Unsurprisingly given that he named the party after himself, he confirmed he'll be its leading candidate with the aim of becoming Austrian Chancellor. Currently his party is polling at around 10%.

Team Stronach already has a faction in the Austrian Parliament, composed of MPs which defected from other parties to join. This provides the party with some public funding in addition to the reported €26m Stronach himself has contributed. Speculation that he would attract Arnold Schwarzenegger, another successful Austrian expat to his party, has been denied by the latter. Stronach is one of the most prominent business people in Canada, where he emigrated to at the age of 22. His party has been accused of populism but unlike Austria’s established far-right, it is not opposed immigration.

Combined with support of around 20% for the far-right FPO party, which supports a Northern euro, around 30% of Austrians seem to support parties which favour an end to the common currency, and unlike in Germany, it seems people are actually willing to vote for parties which explicitly support this objective.  Stronach has a solid organisation and apart from shaking up Austrian politics, the signals he's sending out could spill over to that one country which more than any other holds the fate of the euro: Germany.

Juppé's Polemic

In an interview with today's FAZ, French Foreign Minister Alain Juppé made the following, rather striking statement:

“The dissolution of the eurozone is not acceptable, because it would also be the dissolution of Europe. If that happens, then everything is possible. Young people seem to believe that peace is guaranteed for all time…But if we look around in Europe there is new populism and nationalism. We cannot play with that.”

This threat to peace is, of course, the justification for doing "whatever is necessary to ensure the cohesion of the eurozone."

Does Juppé really believe that people are still willing to buy into this transparent scare-tactic? He has simply turned the logic of current events on its head and confused cause with effect.

After all, the rise of populist parties, which Juppé cites as a threat to European peace no less, has been a response to the attempts to preserve the eurozone at all costs, with many of them using opposition to the bailouts to their electoral advantage.

The True Finns are perhaps the most prominent example of this strategy, which has both pushed them to the top of opinion polls and enabled them to influence the Finnish government from the outside. The argument over Greek collateral in return for Finnish bailout loans is a case in point. The protests against EU-backed austerity measures on the streets of Athens are another manifestation - the EU flag's 12 peaceful stars distorted by Greek protesters into a golden swastika should be enough to make us think twice. This tense situation is particularly damaging for Germany, which is now increasingly being seen as Europe's bully, reawakening some pretty unpleasant stereotypes.

The rise of anti-euro parties point to a situation in which the politics of the eurozone could become explosive. Juppé's polemic, and the mindset that gave birth to it, only makes such a scenario more likely. Shutting down or ignoring peaceful means of registering legitimate protest is the surest way to push people to extremes (though, just to be clear, populist parties around Europe are more diverse in their make-up and origin than is often understood, i.e. the True Finns and FPÖ are not the same). If voters' message is ignored, what options do they have left to register their opposition to and fears about the eurozone elite's consensus?

Former ECB board member Otmar Issing made the point in the FT earlier this month that:

"Any attempt to 'save' monetary union via agreements which transfer sovereignty to a European level, where violations of fundamental treaties have become a regular event, lacks any logic. In the end it will only further alienate the people from Europe itself...

...This type of political union would not survive. Its collapse would be brought by resistance from the people. In the past cries of 'no taxation without representation' have brought war. This time the consequence would be to threaten the collapse of the most successful project of economic integration in the history of mankind."

Similarly, in the FT this week, the standard-bearer of the German anti-bailout movement, Hans-Olaf Henkel, argued,

"Instead of uniting Europe, the euro increases friction. Students in Athens, the unemployed in Lisbon and protesters in Madrid not only complain about national austerity measures, they protest against Angela Merkel, the German chancellor. Moreover, the euro widens the rift between countries with the euro and those without."

Now, talk of the eurozone crisis bringing down the entire EU with it is clearly premature at this stage and, putting it in these terms, on either side of the debate, risks upping the stakes so far as to make the argument self-fulfilling.

However, with the fiscal union versus dismantling of the eurozone choice on the horizon (however distant) the politics of this issue are only going to get more fraught until politicians start addressing the genuine concerns of their citizens. Juppé's remarks are unlikely to help.

Is Turkey going cold on EU membership?

As Europe limps along economically and struggles to speak with a single voice on… well almost anything, and at a time when the EU's two flagship projects - free movement and the single currency - are coming under massive strains, the contrast between the bloc and perennial candidate country Turkey could not be starker.

In 2010, the EU-27’s GDP grew by 1.8%, while in comparison, Turkey’s GDP grew by 8.2% over the same period (and by a phenomenal 150% since 2003), with steady growth of 4.6% projected for 2011. In parallel to its strong economic performance, Turkey is also becoming increasingly self-assertive on the world stage, most notably when, together with Brazil, it took the diplomatic initiative over the Iranian nuclear programme last year.

It now seems as if the increasingly confident Turks are turning against the idea of EU membership. Only 38% expressed support for the idea last year, compared with 73% in 2004. That's a spectacular drop.

Should this be of concern to the EU? Most definitely.

Irrespective of the pro and cons of Turkey joining the EU, Brussels' approach to this issue really represents the worst of all worlds. By constantly sending mixed signals about whether or not Turkey is in fact welcome - the EU risks antagonising a country that it really needs on side. Do you really want to tick off a country that is up and coming, possessing a huge market (that Europe's struggling economy desperately needs) - and whose geo-strategic importance is second to none?

France in particular, but also to some extent Germany, have not exactly encouraged the country's attempt to gain full EU membership despite the fact that Turkey has been an official candidate country since 1999 and in accession talks since 2005. You'd forgive Turks for feeling insulted by being messed around by the EU. This is now reflected in Turkish public opinion.

The problem with the EU's mixed-signals approach is that it could push Ankara in to the arms of far less pleasant countries, such as Iran. That would be a spectacular own goal for Europe.

It is also possible that full EU membership is becoming less appealing for the Turks for other reasons. A union in which debt is being past around and several countries are on the dole - and control over a country's political and economic future is partly in other peoples' hands - just isn't that attractive. While many in Europe are worried they would end up having to subsidise Turks, the idea of being asked to bail out troubled eurozone members (least of all Greece!), can hardly be appealing to the Turks either.

But there's another side to this which is often overlooked. Just as the EU has in the past acted as a driving force behind modernisation and reform in Turkey (albeit with mixed results), so Turkey could contribute to some badly needed reforms in the EU. An EU which has Turkey as a full member simply would have to withdraw from some crucial policy areas where it has over-stepped its mark in the past. Justice and Home affairs for example, where EU integration has made some quantum leaps over the last few years. Or the Common Agricultural Policy, which would probably implode if Turkey were to join, or the Structural Funds, or the excessive use of Qualified Majority Voting (as Turkey would instantly become the most powerful country in the Council of Ministers due to its size). In other words, Turkey's size and composition could in fact be a strong argument in favour of the country joining - at least for those of us who want to see some real and radical EU reform.

In fact, the UK of all member states ought to consider the strategic benefits of using the issue to build momentum for institutional reform within the EU. The EU could also draw lessons from Turkey’s dynamic economic performance which will be crucial to the continent’s future prosperity, especially in the context of Europe’s looming demographic crisis. Clearly, there are significant problems with the Turkish candidature that would have to be overcome, from the Cyprus issue to the status of the Kurdish minority, so it is important not to jump the gun here.

But for politicians - in the UK and beyond - ruling out the prospect of Turkey of tomorrow joining the EU of tomorrow would be a pretty serious mistake.

The EU's walls of Jericho moment?

The exact consequences for the eurozone of the True Finns' success in yesterday's Finnish elections remain unclear. The result makes it the third largest party, securing 39 seats in the 200-strong parliament with 19% of the votes, close behind the National Coalition Party (NCP), which received 20.5% of the votes (44 seats in Parliament) and the Social Democrats which won 19.1% of the votes (42 seats). To put this into context, they polled only 4% in the last national elections.

With performance better than the 15 or so percent expected on Friday, a seat within the new coalition government is now a distinct possibility. Finnish television Yle quotes the party secretary of the victorious National Coalition Party saying that a government consisting of the three major parties is a "strong possibility", with the NCP’s Jyrki Katainen as Prime Minister.

Formal coalition negotiations are due to start on 27 April, which could make it very difficult for Finland to sign up to a bail-out package for Portugal, as that requires the approval of Finnish Parliament. True Finns leader Timo Soini has re-stated his opposition to the Portuguese bail-out package following last night’s election results. “I don’t believe that the package that is there will remain”, he told Yle last night. The Social Democrats want Portugal to restructure its debt rather than seek a bail-out, which is an additional factor in all of this. However, let's not also forget as with all politicians, Mr. Soini wants to be in government - he wants powers - so it's possible that he might compromise on the party's tough 'no more bailouts' position. What's clear is that when it comes to the EU Soini and Katainen occupy two different planets.

Regardless, it's clear that a new brand of "triple A" populism has emerged in the creditor eurozone countries, whose voters are voicing strong opposition to the "we'll keep the euro together at any price" doctrine that they have been fed by EU elites up to now. As we've noted before, such anti-euro sentiments are now picked up by nationalist parties from Vienna to Paris, feeding into the mix of anti-incumbency, pro-independence and most often, strong anti-immigration sentiments.

As we also noted before, the "far-right" label is inappropriate as a generalised term to describe the various parties currently occupying this space around Europe - they're all different in their make-up, roots and emphasis with some a lot nastier than others - and the True Finns simply isn't a "far right" party. What's clear though, is that they all push a heavily nationalist agenda, and they all fish in more or less murky, anti-immigration waters.

But in relation to the eurozone specifically, what's so significant about this election is that it's changing the parameters of the debate. In Austria, Netherlands, Germany and France, the established parties have managed to keep strong anti-euro, anti-bail-out forces outside the realm of government. The Dutch government rely on the opposition parties to circumvent Gert Wilders' Freedom Party, for example. If the True Finns make it into government - and chances are that they will - 'triple A populism' will have become part of the mainstream conversation, in a mainstream European country.

The guiding principle of European integration has always been 'build the institutions and the facts of life will follow'. In the realms of eurozone bail-outs, as well as in the contentious domain of immigration, this guiding principle is now being tested to its limits.

As Gideon Rachman points out on his blog today, the EU is in "deep trouble". Someone (a certain Mr T. Blair), in a speech to the European Parliament, said in 2005:

"It is time to give ourselves a reality check. To receive the wake-up call. The people are blowing the trumpets round the city walls. Are we listening? Have we the political will to go out and meet them so that they regard our leadership as part of the solution not the problem?"

That was six years ago. It's a most unfortunate irony that EU leaders, in their misguided efforts to stamp out 'nationalism' via over-building institutions and attempting to superimpose an artificial identity from above, are now contributing to the rise of the very currents they were professing to fight.

First to the Finnish line

This is a graph showing the support for the different parties, according to a poll published last night, ahead of the Finnish national elections on Sunday. All international eyes are on the True Finns (fourth from the left) - the party that has said it opposes a bail-out deal for Portugal and putting any more cash on the table for struggling eurozone economies. In fact, the party doesn't want to be in the euro at all.

A lot has been said about the True Finns, with the European media all of a sudden forced to become experts on Finnish national politics - it has to be said with varying degrees of success. That many still refer to the True Finns as a "right wing" party indicates the need for a bit more analysis and a bit less reliance on labels that are flying around. The party is pretty skilfully moving along the right-left scale. It's effectively social democratic on economic and welfare issues, favouring a big state, combined with a pretty clear socially conservative flavour. It's definitely populist and not exactly enthusiastic about immigration (and this in a country which accepts some of the fewest migrants in Europe).

So what will happen on Sunday? We wouldn't bet our money on any player. The True Finns have seen a drop in support recently - 15.4% in the poll published yesterday, down from 17.2% a month ago. The National Coalition Party extended its lead to 21.2% in yesterday's poll, while the Centre Party was the second largest party at 18.6%. The Social Democrats were at 18%. The Nordic bookies don't think the True Finns will make it into government and will give you 2.10 times your money for a bet on them winning ministerial seats, while a bet on them not making it only gives you 1.65 times your money.

Regardless, the True Finns are likely to make huge gains compared to the last elections in which they scored just over 4% (see the rise of the True Finns here, in yellow). And a second thing to remember, the Social Democrats - currently at 18% - have also expressed pretty clear opposition to a Portuguese bail-out, instead arguing for a restructuring. Between them, the two parties could well reach above 30% - that's a pretty powerful anti-bail-out bloc. As we've noted before, this could potentially hugely complicate a Portuguese bail-out, as well as efforts to top up the temporary bail-out fund (EFSM) and cash injections in to the permanent rescue mechanism (EFM).

The elections in Finland have made people - not least many opinion formers - start to realise that, shock horror, ultimately the eurozone is about politics. And as we know all politics is local.

In fact, it's difficult to find a more conspicuous example of the inherent flaws of the eurozone - the idea that political ambition can stamp out both economic and democratic realities - coming up against the full force of national democracy.