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Le Pen at l'Opéra in Paris
Reuters/Charles Platiau
Take it easy, Europe.

The rise of Europe’s fringe political parties will only make a bad situation worse

Antonio Barroso
By Antonio Barroso

Senior vice president, Teneo Intelligence

Europe is in economic disarray. Recent data have once more pointed to the fragility of the European recovery, and countries like Spain and Greece are still saddled with unacceptably high unemployment figures.

Yet, as French economist Jean Pisani-Ferry points out, citizens have so far refused to embark on a political “journey to the unknown.” In each national election, European voters have tended to stay away from non-mainstream political forces, instead electing governments supported by conventional political parties. These have pushed for fiscal consolidation and (sometimes) structural reforms.

But things might be about to change.

In Greece, the left-wing SYRIZA might be poised to grab power if the government collapses next spring over the election of a new president. In Spain, the newly-emerged PODEMOS is currently polling in second position at the national level ahead of legislative elections in late 2015. In France, the latest polls are for the first time showing the leader of the extreme-right National Front (FN) Marine Le Pen beating socialist President Francois Hollande in a potential presidential run-off in 2017.

Europe is about to face an explosive cocktail of poor economics and fractious politics. How did we get here? What are the implications?

These are five things to know about Europe’s upcoming political earthquake:

1. Mainstream parties brought this on themselves

Conventional political parties should be blamed for their own decline. To be sure, Brussels’s economic straitjacket, which narrows the political playing field, is not helping them. But the high number of corruption cases, widespread funding scandals, and a general sense that traditional parties are no longer responding to popular anxieties have all contributed to their decay.

Even worse, mainstream parties have done little to counter this trend. Economic recessions seem to spark substantial debates about democratic reforms but recent research suggests that actual political reforms (e.g. changes to the electoral system, the size of elected chambers or the privileges of politicians) rarely tend to be enacted. Conventional parties have been banking on a substantial economic rebound that so far has failed to materialize.

2. Anti-establishment strategies pay off

Non-mainstream parties have been able to exploit this opportunity structure by adopting anti-establishment messages and proposing unorthodox economic policy measures. They present themselves as the true representatives of “the people” against the allegedly corrupt elites of mainstream parties and the business community. This is a classic feature of populist forces, although there is a raging debate about whether newly-emergent fringe parties are really just catering to the part of the electorate that has been worst hit by the economic crisis.

The rise in support for fringe parties poses a significant challenge for European democracies. The emergence of populist forces can be an opportunity, as it can force mainstream parties to open up more to society, but the increased relevance of parties whose policy proposals tend to be rather vague or outright unfeasible certainly creates room for concern.

3. Each country is different, but the outcomes are similar

Given the variety of electoral systems in Europe, the populist shock is likely to affect each country differently. SYRIZA in Greece and PODEMOS in Spain will have to strike coalition deals with other parties if they want to govern, while in France and UK the rise of radical right-wing parties may be contained by an electoral system with a strong majoritarian bias, though this doesn’t mean they won’t increase their presence in their respective parliaments in the future as mainstream parties lose support.

These are two common outcomes of the rise of fringe parties:

  • In the countries where they will be able to govern, their ability to implement their agenda will be constrained by the need to negotiate with other coalition partners;
  • Even if non-mainstream parties aren’t elected, their popularity and the collapse of mainstream parties will lead to increased political fragmentation in a number of European countries.

4. The risk is policy uncertainty

Governing Europe is set to become much more difficult. Take Spain as an example. Not only has the country never had a coalition government at the national level since its transition to democracy, but the increasing fragmentation of the party system might make forming a coalition quite challenging. In France, if President Hollande were to lose the support of his own socialist majority, a potential dissolution of the National Assembly could cause gains for the FN, which would remain an isolated force, but make it much more difficult for either of the two main parties to form a cabinet.

Meanwhile, the past failed government experiences of right-wing populist parties do not suggest a promising policy outlook. Non-mainstream parties lack any governing experience, which is an essential precondition for transforming an electoral program into policy; worse, they will also hold power at the same time that they fight to consolidate themselves as political organizations. The potential for internal divisions will probably increase the level of policy improvisation and limit the ability of countries to respond to economic shocks.

5. It might get (market) nasty

As the recent sell-off demonstrates, financial markets are not ready for the new political uncertainty in Europe. In fact, political turmoil could trigger a return of the same crisis that originally seemed to have abated: the lack of investor confidence. The economic fundamentals in the troubled countries have improved since the beginning of the crisis, but as the ongoing debt and growth crises remain unresolved and the economic outlook is deteriorating, 2015 could be the year where politics take Europe back to the future.