January 31st 2015

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Articles from this issue:

CANBERRA OBSERVED Is time running out for Tony Abbott?

QUEENSLAND STATE ELECTION Choice facing Queensland voters on January 31

NATIONAL AFFAIRS Will Australia strengthen country-of-origin labelling laws?

GREAT THINKERS What Edmund Burke has to say to the modern world

SOCIETY Fatherlessness linked to increased risk of child abuse

LIFE ISSUES Assassinations should be 'safe, legal and rare'

LIFE ISSUES Shocking figures on Holland's euthanasia-fest

EDITORIAL Greek elections new threat to eurozone

Economic crisis polarises European politics

EUROPE Paris attack underscores a deeper malaise

UNITED STATES Dismay and outrage at Obama's Cuba policy

CHINA Flood of Chinese 'black money' distorts property market

FOREIGN AFFAIRS Behind Sri Lanka's vote for change

CULTURE What is the point of criticism?

BOOK REVIEW French sanctuary for endangered Jews

BOOK REVIEW Quaker forger who poisoned his mistress

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Economic crisis polarises European politics

by Patrick J. Byrne

News Weekly, January 31, 2015

The ongoing global economic crisis is breeding discontent and fuelling nationalist movements across Europe.

Nouriel Roubini

Europe went through an exceptional period of peace and prosperity after World War II. This was when West Germany’s Chancellor Konrad Adenauer, Italy’s prime minister Alcide De Gasperi and French president Charles de Gaulle laid the foundations of this extraordinary period that led to the formation of the European Union.

This period was “extraordinary” after Europe had suffered about 390 wars and conflicts following the start of the Hundred-Year War in 1337.

The bloodiest wars occurred over the past two centuries, as Europe formed into nation-states capable of mobilising whole populations and economies for war.

Indeed, Europe was the cradle of “nationalism”, which was particularly notable for the sheer scale of death and destruction it brought to the continent.

While the European Union brought peace, prosperity and a degree of unity, many regard the common currency, the euro, as a “bridge too far”.

In the wake of the 2007 global financial crisis, the euro has tied the worst-affected countries (Portugal, Ireland, Italy, Greece and Spain) to a high-valued currency that has made their exports dearer, their imports cheaper and their economies uncompetitive. This has destroyed local industries and led to high levels of unemployment, making it impossible for the countries concerned to bring down their huge levels of national debt.

In some of these states, youth unemployment is over 40 per cent, and could stay at that level for a generation.

Nouriel Roubini, a professor at New York University’s Stern School of Business, has warned: “If income and job growth do not pick up soon, populist parties may come closer to power at the national level in Europe, with anti-EU sentiments stalling the process of European economic and political integration.”[1]

Extremist parties are on the rise. Sweden has seen the emergence of a far-right anti-immigration party, the Sweden Democrats.

In Greece, the left-wing Syriza Party opposes the EU austerity measures supported by the mainstream parties.

In Spain there has been a dramatic rise in popular support for Podemos,[2] described by Stratfor, the Texas-based private intelligence and security think tank, Strategic Forecasting, Inc., as “a populist left-wing protest party that wants to renegotiate the European Union’s debt and deficit targets and restructure the Spanish debt”.[3]

Even in the United Kingdom, the rise of the anti-immigration UK Independence Party (UKIP) is challenging the main political parties.

The editor of Stratfor, George Friedman, has commented: “The economic decline is … leading to a crisis of representation; a growing number of citizens no longer feel represented by mainstream political parties, unions and other traditional institutions.”[4]

Confronted with high unemployment, Europe is also struggling with high levels of immigration.

The enlargement of the EU in the mid-2000s opened the door for immigration from countries in the formerly communist Eastern bloc. Germany, the United Kingdom and the Netherlands, in particular, have faced immigration from southern and eastern EU countries.

Later, coinciding with Europe’s deepening economic crisis, chronic instability in the Middle East has led to hundreds of thousands of asylum-seekers arriving in Europe every year,[5] creating a political backlash.

Friedman comments, “In times of economic hardship, people tend to look for simple answers to complex problems, and ‘foreigners’ are usually the easiest target. It is not a coincidence that the [anti-Muslim] Pegida protests emerged in Saxony – one of the German states with the lowest rates of immigration but with some of the highest rates of unemployment.”[6]

Radical Islamists are also exploiting the situation. The objective of the recent shocking terrorist attacks in France was to provoke European states into cracking down hard on local Muslim communities, inciting conflict between local Muslims and their host countries.

This allows radical Islamists to further their narrative that the West is waging war on Muslims, and to help them recruit disaffected youth.

Non-Muslims are deliberately targeted as a means to gain ground in what is essentially an expanding war between extremist Muslim groups, such as the Islamic State and al Qaeda, over what it means to be a Muslim.

Friedman adds: “While Western states go to great lengths to demonstrate that no such clash of civilisations is occurring, [Europe’s] right-wing forces engage in rhetoric that reinforces these fears among many common Muslims across the world.”[7]

The states of the old Soviet empire and the Middle East are also suffering from crippling economic problems.

Nouriel Roubini points out: “In Russia and many parts of Eastern Europe and Central Asia … the fall of the Berlin Wall did not usher in democracy, economic liberalisation, and rapid output growth. Instead, nationalist and authoritarian regimes have been in power for most of the past quarter-century, pursuing state-capitalist growth models that ensure only mediocre economic performance.”

In the Middle East, where half the population is under the age of 24, the Arab Spring was triggered by high levels of youth unemployment and economic desperation.

Roubini goes on to warn that “economic failure and a lack of opportunities and hope for the poor and young are fuelling political and religious extremism, resentment of the West and, in some cases, outright terrorism”.[8]

There is no fast solution to the problems that have left these countries in political chaos and reverting to authoritarian strongmen. The three conditions for the rise of groups such as the Islamic State are a failed political system, huge inequalities and a radical ideology.

In Europe, says Friedman, behind the rise of new nationalistic parties “is a growing resistance to globalisation, understood as the free movement of goods, services and, most important, people”.

He continues: “From the Italian shoemaker who cannot compete with cheap Chinese imports to the British factory worker who believes that Polish immigrants are threatening his job, many Europeans believe globalisation is a menace to their way of life.

“The fact that the European Union was built on many of the principles of globalisation explains why the bloc is becoming increasingly fragmented and why the promise of a ‘United States of Europe’ probably will never be achieved.”[9]

Patrick J. Byrne is national vice-president of the National Civic Council.

[2] “Europe’s anti-establishment wave reaches Spain”, Stratfor, November 3, 2014.
URL: www.stratfor.com/sample/geopolitical-diary/europes-anti-establishment-wave-reaches-spain

[3] “Europe: when the unthinkable becomes possible”, Stratfor, December 3, 2014.
URL: www.stratfor.com/geopolitical-diary/europe-when-unthinkable-becomes-possible

[4] “Europe rediscovers nationalism”, Stratfor, January 11, 2015.
URL: www.stratfor.com/analysis/europe-rediscovers-nationalism

See also: “Europe: a crisis of representation”, Stratfor, November 15, 2013.
URL: www.stratfor.com/sample/analysis/europe-crisis-representation

[5] “In Europe, a rise in asylum-seekers”, Stratfor, August 14, 2013.
URL: www.stratfor.com/sample/analysis/europe-rise-asylum-seekers

[6] “Europe rediscovers nationalism”, Stratfor, January 11, 2015.
URL: www.stratfor.com/analysis/europe-rediscovers-nationalism

[7] “Paris attack underscores a deeper malaise”, Stratfor, January 8, 2015.
URL: www.stratfor.com/geopolitical-diary/paris-attack-underscores-deeper-malaise

[8] Nouriel Roubini, op. cit.

[9] “Europe rediscovers nationalism”, Stratfor, January 11, 2015.
URL: www.stratfor.com/analysis/europe-rediscovers-nationalism

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