Euro blues

The first thing to say about the elections to the European parliament is that the turnout across Europe was almost exactly the same as in the last time in 2009 at 43%. Despite the campaigns of anger by the Eurosceptic and far right parties against the EU, voters continued to show a lack of interest in the EU parliament and doubt that EU institutions were relevant to their lives. The NO VOTE party won again. Voter turnout has steadily fallen since 1979 when it was 62% with the no vote party starting to win from 1999 when the euro emerged.

Voter turnout is not uniform across Europe, however. Around 90% Belgian/Luxembourgists eligible to vote turned out (although that figure was the lowest so far). Belgians have a vested interest in the EU, with the Commission based in Brussels and with the country’s unity partly dependent on the continuation of the Union. The only other countries with a turnout greater than 50% were Italy, Malta, Denmark, Greece and Ireland. Significantly, of these, only Greece experienced an increase in voter turnout over 2009. Also countries with strong Eurosceptic parties like the UK, France or Finland saw an increase in turnout, but in all cases with still an abysmally low turnout. What was shocking was the very low turnout in most countries of Eastern and central Europe: only 13% of eligible Slovakians voted.

Of course, all the media hype is about the roaring success of the anti-EU, anti-immigration parties in France and the UK. UKIP has polled about 27% of the vote (only 36% turned out), beating Labour, which will end up with about 26%, and pushing the governing Conservatives into third place for the first time at 24%. So UKIP’s share has jumped about 11% pts from 2009, Labour’s is up about 10% pts and the Conservatives have dropped about 4% pts. The junior partner in the UK’s governing coalition, the Liberal Democrats, halved their share to about 7% and finished behind the Greens.

It was a similar story in France, where the racist, ex-fascist party, Front National (FN) took 25% of the vote on a reduced 43% turnout, beating the opposition centre-right parties (21%) and governing socialists (just 14%). There were also good results for Eurosceptic, anti-immigration parties in Denmark and Finland. But there were also defeats for such parties in Belgium, the Netherlands and in Italy, where the Five-Star movement under Beppe Grillo finished well behind at 21% compared to the governing centre-left Democrats under new shining star, Matteo Renzi, with over 40%. And in Ireland, Sinn Fein did better, but not as well as expected and the two large centre parties held their own comfortably.

The overall outcome for the European parliament is still going to be business as usual. The centre-right and centre-left groupings combined took more than 50% of the EU vote, but their share has declined. Together they will have about 400 seats out of 751, but that is down on the last time, especially for the centre-right. The success of some of the rightist parties and the fragmentation of politics in Europe will be expressed in a large increase in smaller party groups and independents.

Those parties left of the social-democrats generally did better than in 2009. In Spain, a leftist party came from nowhere to poll 8% along with the Communists with 10%. Of course, the biggest success was the win for Syriza in Greece, with nearly 27% of the vote over the ruling New Democrats with 23%. Yes, the fascist Golden Dawn also did well with just under 10% but the combined anti-austerity vote (Syriza, Communists etc) was over 50%.

Why did the likes of UKIP or the FN do so well? Well, I reckon there are several reasons. The most obvious one is that European capitalism has been through a major economic collapse in 2008-9 that has continued with a depression in incomes, employment and public spending. So for five years or more, the majority of households in Europe (including the likes of the Netherlands, Sweden and the UK) have suffered a loss in living standards not seen since the 1930s. In Greece, Spain, Portugal and Ireland, unemployment has broken records, particularly for young people.

EU unemployment

Governments in Europe have imposed austerity across the board and when defeated in elections, the opposition parties have continued those anti-labour measures. France is the clear example. The socialists under Francois Hollande won an election on promises to tax the rich and preserve pensions and wages. It has done the opposite. Disillusionment with the government is overwhelming.

Public opinion pollsters have found that, of those who voted for the likes of UKIP or the FN, about one-third were just fed up with all the main parties and another 10% were protesting against the existing government. In France, apparently over 40% of white working class voters went for the FN. Yes, there is a layer of voters who are anti-immigrant, nationalist and even racist. But this layer remains relatively small in the broad sweep of things. Take the UKIP vote in the UK. Of those who voted in the UK EU election, nearly three-quarters voted for other parties and less than one in ten who could have voted did so for UKIP. Similarly even in France, only one in nine voted for the FN.

When it gets to national general elections, with higher turnouts and electoral systems not based on proportional representation, these nationalist anti-immigration parties will do less well. Indeed, the local election results in the UK did not produce the same success for UKIP as the EU elections did – the EU does not seem relevant to most people (except UKIP supporters) and so a vote against the ruling elite is easy to make.

The crisis in the Eurozone has been blamed on the rigidity of the single currency area and on the strident ‘austerity’ policies of the leaders of the Eurozone. But the euro crisis is only partly a result of the policies of austerity being pursued, not only by the EU institutions, but also by states outside the Eurozone like the UK. The Euro crisis is a product of the slump in global capitalism and the subsequent failure to recover is the same. Profitability in most capitalist economies is still well below the peak of 2007 and for economies like Italy and Slovenia, it is still heading downwards.

In all these countries, governments are implementing an agenda of ‘labour market reform’, spending cuts and privatisations designed to hit labour’s share in the national output – there is more misery to come. But it is not just the politicians of austerity that have driven or aim to drive down labour’s share. Government policy based on the Keynesian ‘alternative’ of debt restructuring and devaluation of the currency has led to the same result. Iceland’s supposedly Keynesian policies have produced a larger fall in labour’s share than in austerity Spain or Portugal.

Restoring profitability is key for economic recovery under the capitalist mode of production. So which pro-capitalist policy has done best on this criterion? Let’s compare Greece and Iceland. Iceland’s rate of profit plummeted from 2005 and eventually the island’s property boom burst and along with it the banks collapsed in 2008-9. Devaluation of the currency started in 2008, but profitability in 2012 remains well under the peak level of 2004, although there has been a slow recovery in profitability from 2008 onwards. Greece’s profitability stayed up until the global crisis took hold and then it plummeted and only stopped falling last year. Profitability in ‘austerity’ Greece and ‘devaluing’ Iceland is now about the same relative to 2005 levels. So you could say that either policy has been equally useless.

ROP compared

Europe’s economy is still not recovering. Indeed, deflation as in Japan is now a serious risk.

EU deflation

The ECB is now under pressure to launch an injection of credit into the Eurozone economy similar to the measures adopted by the Bank of Japan in the last year, designed to stop deflation and boost growth. Such ‘quantitative easing’ measures will not succeed in restoring trend growth. But they may keep the stock market and bonds buoyant and weaken the euro so that deflation is avoided as import prices and dollar-based profits rise. The European election results will not lead to any break-up of the EU or the Eurozone, but they don’t help to sustain the EU or the euro either.

9 thoughts on “Euro blues

  1. *** 90% in Belgium: Belgians are OBLIGED to vote. (+ EU elections were organized together with regional and federal elections) l

    Met vriendelijke groeten, Hilde Princen V A N L O O V E R E N & P R I N C E N • grafische communicatie tel. 0498 111 477 |

    Op 26-mei-2014, om 11:25 heeft Michael Roberts Blog het volgende geschreven:

    > >

  2. People keep playing down UKIP and keep highlighting their so called faux pas episodes.

    But they keep on making ground regardless.

    If the word on the street is anything to go by we should be taking their threat seriously and we should recognise that on immigration and welfare at least UKIP speak for I would say an overwhelming majority.

    And when some New labour politician says, yes but look at their record on sick pay, we should remind New Labour that under their watch most peoples labour rights were trashed, along with their pensions. So by voting for UKIP they are not exactly losing much!

    New Labour deserve much of the blame for the appeal of UKIP, and all those on the left who have given New Labour an easy ride.

    The defeat of New Labour is THE task for the left. UKIP are merely the symptom.

  3. From a correspondent: Podemos, the radical left platform in Spain which came out of no where, were the initiative in which Izquierda Anticapitalista was involved (one is now an MEP as she was number 2 on the list).

    With a 4 month history they got 1.240.000 votes an 5 seats. United Left with more than 25 years of history, accumulated publicity and developed financial apparatus got just 1more seat!

    In Madrid Podemos became the third most important electoral force, polling 11% and more than 15.000 votes ahead of United Left.

    They ran an amazing self-financed (they didn’t ask for a loan from banks on principle) grass roots campaign in which over 400 local circles of Podemos activists were formed across the country within months. They had election rallies all over the country in which it was normal for more than 1.000 people to show up at each of them and they were able to tap into the 15 May generation of newly politicised youth. The official vote intention electoral polls did not include them until weeks ago…and they were completely excluded by the media coverage of the election campaigns. The only coverage they got was that received by its charismatic front runner Pablo Iglesias who is a participant in several TV talk shows but was almost never given the chance to directly make electoral publicity for Podemos.

    It is time to reconsider the boundaries of what is possible for the left in Spain.

    The leader of the PSOE also announced that he will resign in July and call an extraordinary congress to elect a new leadership. It was the worse electoral result of the PSOE in its history, a 41% decline compared to 2009 or a loss of 2.6 milion votes.

  4. It appears that the left does best when it campaigns against capitalism, against social-democratic fog, and against the EU, hence for socialism that will not be gained by elections and street demonstrations alone. Conversely, where such a left is absent, the far right parties gain most.

  5. “It appears that the left does best when it campaigns against capitalism, against social-democratic fog, and against the EU”

    Actually, no. By far the best Left performance was by Syriza, which have from the beginning campaigned on the basis of being against austerity, but for the EU and for the Euro! In Britain, NO2EU campaigned on the basis you suggest and got completely crushed with less than 1% of the vote, which was even way down on the pathetic vote it got in 2009.

    People keep talking about UKIP, but it got 27% of a vote of only 35%, in other words only about 10% of potential votes and only around 13% of the normal vote for a General Election. Its no different than the way they and the BNP won seats in very low polls in the past.

    If people really are opposed to the EU, why did only 35% bother to vote? Most people say they don’t see that the EU affects them, which is also true about Local Council elections, which is why most people don’t bother to vote in either.

    In reality, as Syriza have realised, and as socialist internationalists realised going back to Marx, campaigning for “Socialism in One Country”, which is what opposition to the EU amounts to, is reactionary. If you want to campaign against capitalism, and provide workers with a socialist alternative it cannot be done on a reactionary nationalist basis of a defence of existing nation states. It can only be done on the basis of an advance of workers economic and social power across Europe, which is why Trotsky and later the Comintern advanced the slogan of a United States of Europe as an algebraic formula, within which they could argue for such workers advance, including a struggle for such reforms, and the establishment of a Workers Government.

    1. Syriza are from a country with a traditionally strong left, from a country that is relatively backward and therefore see salvation in belonging to something bigger and were more affected by Austerity than anywhere else.

      Britain should not be compared with Greece!

      Even among potential UKIP supporters the EU does not top their concerns, and I suspect if there were a referendum that the vote to stay in the EU would win narrowly. I also suspect that UKIP exist not to leave the EU but to pull it in a more Neo-liberal direction.

      No the main pull of UKIP is their rancid immigration policies and populist racism. All a front I am sure to appeal to the cretins.

      UKIP are on a roll at the moment, and that is cause for concern at the very least. It is also a cause for concern that there are very real economic factors that provide a basis for their support, for example, the trashing of workers rights and the economy of poundland and KFC etc. When you are employed in those jobs UKIP’s threat of removing labour rights seems like natural justice, the mentality of “Why should they get sick pay when I don’t!”

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