Europe’s Super Sunday promises an exciting, uncertain future

Voters rejected austerity and they rejected the political establishment.

After a breathless day of elections from the north to the south of Europe, the result is clear. Voters across Europe have decisively broken the austerity consensus that has dominated for the last two years. But while François Hollande’s victory will delight left-wingers across the continent, the people of Europe woke up this morning to a very uncertain future. Unsurprisingly, the financial markets have reacted nervously with share prices tumbling and, in the case of Greece, by 8 per cent already.

There is a danger in hoping for too much from Hollande – he is unlikely to single-handedly turn the tide against the austerity consensus - but his victory signifies a seismic shift in Europe’s politics. With Sarkozy ousted, Angela Merkel has lost her main ally in leading the EU’s response to the debt crisis. Hollande has promised to re-negotiate the fiscal compact treaty and she will almost certainly have to offer concessions to prevent the Merkozy inspired creation from being kicked into touch. Meanwhile, EU officials have spent the last couple of months preparing for a Hollande presidency and will try to buy him off with a growth and jobs pact in exchange for keeping the treaty intact.

Merkel has also taken pre-emptive action to shore up her position by paving the way for her Finance Minister, Wolfgang Schauble, to take over from Luxembourg’s Jean Claude-Juncker as chair of the eurogroup – the eurozone’s 17 finance ministers. Schauble, like his boss, is an austerity-hawk.

Moreover, Hollande’s room for manoeuvre is not that great. While the French economy is not in crisis like the rest of Club Med, with unemployment nudging 10 per cent

and debt repayments amounting to more than the education spending after the country lost its AAA credit rating, it is hardly in rude health. His ability to bargain at EU level is also hampered by the economic governance package forced through by the conservative/liberal majorities in the European Council and the European Parliament. This forms the centre-piece to the EU’s austerity drive, locking EU countries into strict rules on overall budget deficit and debt levels, with fines for non-compliance.

However, the mood of the public and politicians has moved decisively. Hollande has promised to offer an alternative to a diet of cuts and to re-balance tax system, and he will need to sketch out a coherent economic programme in the first few months of his presidency. He should also try to make allies of Italian Prime Minister Mario Monti and the President of the European Central Bank, Mario Draghi, who have also made recent demands for economic growth and job creation to be prioritised over spending cuts.

But while the future for France is exciting, the future for Greece now looks even more uncertain. A country brought to its knees by bankruptcy and austerity now has a full-blown political crisis to cope with following a complete fragmentation of the party system.

The complete destruction of the two dominant parties is quite staggering. For the centre-right New Democracy party, which topped the poll despite winning less than 20 per cent of the vote the result is merely dismal. Their long-time rivals, the socialist Pasok party, which won the last election in 2009 with 43 per cent, fared even worse - annihilated with just 13 per cent. The two parties which have dominated Greek politics since the end of military rule in the 1970s, and which secured nearly 80 per cent of the vote in 2009, took just 32 per cent between them. By any yardstick the Greek electorate has given its political class a good kicking and the old status-quo will not be the same again.

If it was hard to see how Greece was going to cope with the terms of the second €140bn bail-out package with a relatively stable coalition, it now appears almost inconceivable that the deal will survive as it stands. All parties bar Pasok supported either re-negotiation of the terms or rejection even though moves to re-negotiate would be met with hostility by most EU countries.  If New Democracy’s leader Antonis Samaras, as expected, becomes Prime Minister, there are no obvious ways for him to cobble together a majority without accommodating parties on the far-left and right which want to tear up the bail-out agreement. New elections in a few months cannot be ruled out, although this is unlikely to make much difference. It is hard to see what possessed New Democracy and Pasok to agree to early elections. 

In the meantime, we can expect calls for the out-going technocratic Prime Minister, Lucas Papademos, to remain in government. Untainted by the debt crisis, Papademos enjoyed high personal ratings throughout his six months in charge and, if he can be persuaded to put his wish to return to teaching in the US on the back-burner, he would make a popular Finance Minister.

There was, however, one country where voters did not reject a governing party promising fiscal austerity – Germany. Angela Merkel’s CDU still topped yesterday’s poll in the German Lander elections in Schleswig-Holstein. Even though the CDU vote fell to 31 per cent, their lowest score in 60 years, they still narrowly beat the SPD. The real losers were Merkel’s coalition partners, the free-market Free Democrats, who collapsed to just 6 per cent, well beaten by the Greens and the Pirate party. Nonetheless, it is clear that Merkel still commands support and respect in Germany and, as an experienced leader of Europe’s strongest country, she is still the strongest force in EU politics.

For all that, however, there are two big messages that voters across Europe sent to their politicians on Super Sunday – they rejected austerity and they rejected the political establishment. Mainstream parties of the left and, particularly, the right should watch, listen and learn from these results. But those who have despaired at the right's obsession with self-defeating spending cuts have a reason to be optimistic again. Now it's up to you Francois.

Ben Fox is chairman of GMB Brussels and political adviser to the Socialist vice-president of economic and monetary affairs.

Financial markets in Greece have tumbled by eight per cent. Photograph: Getty Images.
Getty
Show Hide image

Find the EU renegotiation demands dull? Me too – but they are important

It's an old trick: smother anything in enough jargon and you can avoid being held accountable for it.

I don’t know about you, but I found the details of Britain’s European Union renegotiation demands quite hard to read. Literally. My eye kept gliding past them, in an endless quest for something more interesting in the paragraph ahead. It was as if the word “subsidiarity” had been smeared in grease. I haven’t felt tedium quite like this since I read The Lord of the Rings and found I slid straight past anything written in italics, reasoning that it was probably another interminable Elvish poem. (“The wind was in his flowing hair/The foam about him shone;/Afar they saw him strong and fair/Go riding like a swan.”)

Anyone who writes about politics encounters this; I call it Subclause Syndrome. Smother anything in enough jargon, whirr enough footnotes into the air, and you have a very effective shield for protecting yourself from accountability – better even than gutting the Freedom of Information laws, although the government seems quite keen on that, too. No wonder so much of our political conversation ends up being about personality: if we can’t hope to master all the technicalities, the next best thing is to trust the person to whom we have delegated that job.

Anyway, after 15 cups of coffee, three ice-bucket challenges and a bottle of poppers I borrowed from a Tory MP, I finally made it through. I didn’t feel much more enlightened, though, because there were notable omissions – no mention, thankfully, of rolling back employment protections – and elsewhere there was a touching faith in the power of adding “language” to official documents.

One thing did stand out, however. For months, we have been told that it is a terrible problem that migrants from Europe are sending child benefit to their families back home. In future, the amount that can be claimed will start at zero and it will reach full whack only after four years of working in Britain. Even better, to reduce the alleged “pull factor” of our generous in-work benefits regime, the child benefit rate will be paid on a ratio calculated according to average wages in the home country.

What a waste of time. At the moment, only £30m in child benefit is sent out of the country each year: quite a large sum if you’re doing a whip round for a retirement gift for a colleague, but basically a rounding error in the Department for Work and Pensions budget.

Only 20,000 workers, and 34,000 children, are involved. And yet, apparently, this makes it worth introducing 28 different rates of child benefit to be administered by the DWP. We are given to understand that Iain Duncan Smith thinks this is barmy – and this is a man optimistic enough about his department’s computer systems to predict in 2013 that 4.46 million people would be claiming Universal Credit by now*.

David Cameron’s renegotiation package was comprised exclusively of what Doctor Who fans call handwavium – a magic substance with no obvious physical attributes, which nonetheless helpfully advances the plot. In this case, the renegotiation covers up the fact that the Prime Minister always wanted to argue to stay in Europe, but needed a handy fig leaf to do so.

Brace yourself for a sentence you might not read again in the New Statesman, but this makes me feel sorry for Chris Grayling. He and other Outers in the cabinet have to wait at least two weeks for Cameron to get the demands signed off; all the while, Cameron can subtly make the case for staying in Europe, while they are bound to keep quiet because of collective responsibility.

When that stricture lifts, the high-ranking Eurosceptics will at last be free to make the case they have been sitting on for years. I have three strong beliefs about what will happen next. First, that everyone confidently predicting a paralysing civil war in the Tory ranks is doing so more in hope than expectation. Some on the left feel that if Labour is going to be divided over Trident, it is only fair that the Tories be split down the middle, too. They forget that power, and patronage, are strong solvents: there has already been much muttering about low-level blackmail from the high command, with MPs warned about the dire influence of disloyalty on their career prospects.

Second, the Europe campaign will feature large doses of both sides solemnly advising the other that they need to make “a positive case”. This will be roundly ignored. The Remain team will run a fear campaign based on job losses, access to the single market and “losing our seat at the table”; Leave will run a fear campaign based on the steady advance of whatever collective noun for migrants sounds just the right side of racist. (Current favourite: “hordes”.)

Third, the number of Britons making a decision based on a complete understanding of the renegotiation, and the future terms of our membership, will be vanishingly small. It is simply impossible to read about subsidiarity for more than an hour without lapsing into a coma.

Yet, funnily enough, this isn’t necessarily a bad thing. Just as the absurd complexity of policy frees us to talk instead about character, so the onset of Subclause Syndrome in the EU debate will allow us to ask ourselves a more profound, defining question: what kind of country do we want Britain to be? Polling suggests that very few of us see ourselves as “European” rather than Scottish, or British, but are we a country that feels open and looks outwards, or one that thinks this is the best it’s going to get, and we need to protect what we have? That’s more vital than any subclause. l

* For those of you keeping score at home, Universal Credit is now allegedly going to be implemented by 2021. Incidentally, George Osborne has recently discovered that it’s a great source of handwavium; tax credit cuts have been postponed because UC will render such huge savings that they aren’t needed.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 11 February 2016 issue of the New Statesman, The legacy of Europe's worst battle