May 20, 2019
The disgrace of Heinz-Christian Strache, the former FPÖ leader in Austria, may have come at an opportune time. While it will almost certainly turn Austrian politics upside down, its impact on the wider EU is harder to assess, including on this week's European elections.
The anti-EU forces have had a good election campaign so far in several countries. This is most extreme in the UK, where the Brexit party is now eating into the voters base of both the Conservatives and Labour. But even in Germany, we are now getting reports that the SPD's campaign is not getting any traction despite a generally well-liked candidate. The far right is also doing well in France and Italy. Over the weekend, Matteo Salvini and Marine Le Pen were leading a rally of far right parties in Milan, a group of which Austria's now disgraced FPÖ is also a member. While the German media is still celebrating Strache's well-timed political decapitation, the Italian media have already moved on - following Salvini's lead. In his position as Italy's interior minister he is proposing a decree to close Italy's ports to ships from refugee NGOs. The concrete trigger has been the request by Sea Watch, a German maritime rescue organisation, to seek permission to enter the port the Lampedusa with 47 immigrants on board. It is a big controversy within the Italian coalition, pitching Salvini and Luigi di Maio at opposite ends of the debate. But no matter whether this decree will actually get issued or not, we suspect it has already done the job for Salvini. With a few days to go before the European elections, he managed to get immigration back onto the agenda.
Over the weekend, we also noted another Salvini outrage. Salvini was quoted by Corriere della Sera as saying that he wants to go back to the pre-Maastricht situation with "standard economic rules". This is not about euro exit. This is about busting the rules.
So how will the FPÖ scandal play out? After his resignation, the Austrian government collapsed. President Alexander Van der Bellen order new elections for September. Once again, the political experiment of an ÖVP/FPÖ coalition has failed, which will leave, as ever, the old grand coalition between ÖVP and the SPÖ, the centre-left social democrats, as an unpopular but inevitable fall-back option. This is an environment in which the extremes do rather well. So this already creates a platform for the FPÖ to re-emerge in opposition. The party survived leadership crises before. Its former leader, Jorg Haider, was also involved in serial scandals before his death in a car accident in 2008.
Outside Austria, we suspect the impact will be limited if only because Strache was trapped. It was not a recording of real attempted Russian influence-peddling. We also like to draw to attention to the experience from the US where successive scandals failed to sink Donald Trump. As one of us wrote before: the fundamental choice facing centrist establishment parties is whether to seek to solve the problem or the crime. It appears to us now that the focus has unfortunately been on solving the crime. Strache has been a successful outcome of that strategy, but only a limited one.
We also noted that Germany was in a state of shock over the weekend, as the realisation of the rise of the nationalists in the European elections was slowly sinking in. Tagesschau interviewed Heiko Maas, who informed German TV viewers that right-wing nationalists could do rather well at the elections, adding this must be stopped - using a revealing passive tense. A Sunday evening talk show also hyperventilated on the theme. What always strikes us is the failure of the German establishment in particular to see any connections between fiscal austerity - as promoted by successive German as a financial crisis response - and the rise of far-right parties in other EU countries.
The far-right will, of course, not win the European elections. Salvini's and Le Pen's Europe of Nations and Freedom group is currently one of three groups in the European Parliament that would fall under the broad category of populist. Poland's Law and Justice Party is not part of it, and have resisted several overtures by Salvini. But once Brexit is enacted, it will deprive them of their main partner in the European Parliament, the British Conservatives. Having split off from UKIP, Nigel Farage is also unlikely to join Salvini's crowd. If Farage gets 30% in the European elections, his group could be one of the largest national factions in the newly elected parliament. One of the things to watch out for after the elections is to what extent the far right parties will seek and manage to consolidate or at least co-operate.
We also have stories on Macron's accusations of a plot against the EU; about Juncker's succession; about the big Brexit issue that is not on most people's radar screen yet, but soon will be; on Carige missing a deadline; and on the ECB's first potential loss on its asset purchases.