From the TUC

Can voting change anything (in Britain, France, Germany, Greece…)?

07 May 2012, by in International

Sunday’s elections in France, Germany and Greece (Presidential, regional and Parliamentary respectively) are being pored over to determine what they mean for the future of the European economy (as well as European democracy itself): interestingly, the much clearer anti-austerity messages from the UK’s local elections aren’t being seen in that light at all, perhaps further evidence of the UK’s distance from the rest of Europe. Learning from Mitterand’s victories in the 1980s, socialism in one country is unlikely to be tried in France, and Hollande (the ‘other Francois’?) has few allies for his upcoming stoush with German Chancellor Merkel. And whilst the Greeks voted in the main for parties opposed to the outgoing Government’s austerity deal with the troika, parliamentary arithmetic makes it likely that a New Democracy-Pasok coalition is likely to return to power one way or another. The Schelswig-Holstein elections in Germany, meanwhile, offer even less clarity, with the main change being the replacement of the left wing Die Linke by the libertarian Pirate Party.

So what has voting achieved over the weekend? Well, the voters have sent a fairly clear message in Britain, France and Greece that they are not at all happy about austerity (and even in Germany, that case can be made, but more weakly). It’s not yet clear whether that message will be heeded in Berlin, Brussels or Frankfurt (home of the European Central Bank). 

In France, Sarkozy stressed the dangers of having an untested President dealing with the economic crisis, but he barely defended the austerity that he implied was the only sensible reaction to that crisis. He was, after all, almost alone in the first round in supporting austerity, with extreme right, centre left and far left opposing it to varying degrees. Hollande is, as people are now making clear, in favour of balancing the budget only a year later than Sarkozy, although he plans to do so differently, with higher taxes on the rich, and more growth. But he’s not in a position to be much more radical than that even if he wanted to be, because so few other European governments share his opposition (several smaller countries like Austria and Denmark have arguably only gone along with EU austerity because they were outnumbered, but Hollande needs one or two more of the big 5 economies – Germany, Italy, Spain or the UK- on board to really change Europe’s direction and he will need to wait for that).  Hollande will therefore most likely seek to nudge Germany towards a more sensible approach to growth, with support from those like Mario Draghi at the ECB, Angel Gurria at the OECD and Sarkozy’s former Finance Minister Christine Lagarde at the IMF, all of whom have twigged that growth must be reprioritised.

In Greece, voters expressed their opposition to the bailout overwhelmingly, but the split left means that New Democracy gets the “winner-takes-all” extra 50 seats reserved for the largest single party. Even with that boost, their partnership with PASOK would not provide a Parliamentary majority, although I suspect the most likely outcome of the next few days of negotiation will be a New Democracy-led coalition including PASOK again but also including the centre-right Independent Greeks, but pledged to bargain for some relaxation of the bailout. Parties to the left of PASOK, who are unlikely to consider PASOK an acceptable coalition party), have nowhere near the Parliamentary seats needed to form  a government, and they are unlikely to be able to construct a majority by reaching out beyond the left. A further election is not unlikely, and an outbreak of left unity could see the left overtake New Democracy. But neither the German government nor the markets will be keen on that and are likely to punish Greece accordingly, something that would be deeply worrying for democracy.

Germany is of course the key to all this, and the Schleswig-Holstein elections don’t offer much in the way of answers. Merkel’s CDU clearly lost badly, although her more free market coalition partners the FDP did less worse than was expected (essentially returning to the result from the election before last). The SPD and the Greens may be able to form a government with the support of the Danish minority party the SSW, or even the uber-social libertarians of the Pirate Party which replaced Die Linke (the party to the left of the SPD). But a CDU-SPD grand coalition may result, and that is also at the moment quite likely to be the outcome when Germany holds its General Election in 2013. A red-black German coalition would be more growth-friendly than the current government, and therefore more helpful to Hollande, but would not amount to the rejection of austerity in the heart of fiscal conservatism that we’ve been hoping for. (And the forward march of Labour in the UK, which has seen the Liberal Democrats collapse further but UKIP being the main recipient of lost Conservative votes, is unlikely to result in a change of Government economic policy for some while yet.)

So, the weekend didn’t change everything. Although there are worrying implications for democracy in that, clearly we live in a world where one or two countries’ electorates cannot (and probably shouldn’t, as Merkel has inexpertly argued) change the EU’s direction. But after spending 2010 and 2011 punishing left of centre parties at the polls (eg UK, Portugal, Spain), European elections do now seem to be heading in a different direction. Anti-austerity campaigns have achieved a lot – but there’s a lot more to do.