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29 April 2023

Will the centre hold in Europe?

Centrist political parties have been struggling in many parts of Europe. There are two opposing literary images that spring to mind. Tolstoy's unhappy families is the narrative of political journalism. It explains the decline of the centre in terms of national stories: French pension reforms; German energy policy; Italian stagnation. Each failure is an unhappy story on its own.

The opposing view that of a unifying force behind the chaos in European politics, the spiritus mundi in Yeat's poem The Second Coming: "Things fall apart; the centre cannot hold".

France is the most interesting example because it is the only country that tried to re-invent the political middle ground through Emmanuel Macron's radical centrism. That came and went. The pension reform debacle has once again strengthened the forces on the left and the right, but in particular Marine Le Pen.

Italy last year elected a prime minister of the far right. In Spain, the radical forces operate in more insidious ways: the far left and the far right have formed alliances with the centrist parties and pushed them to more extreme positions. The centre still holds in Germany, but it, too, has weakened in the wake of the pandemic, the war, and inflation.

All this begs the question: why is this happening in so many countries at the same time? What is happening, I believe, is that the social fabric that supported the centre has come unstuck. It's partly an economic story, but you can't it reduce it to a series of numbers. In post-war Europe, industry provided life-long employment, guaranteed pensions, and stable social structures. Industrial plants were surrounded by sprawling neighbourhoods. People were rooted in their communities. This is why the Germans, for example, talk about Industriegesellschaft - industrial society - as opposed to industrial economy. It is a way of life.

The decline of the centre and de-industrialisation are closely related. Support for Brexit was at its highest in northern English industrial towns that used to belong to the UK's rust belt. In Germany, the two parties invested most heavily in the industrial society were Olaf Scholz' SPD and the centre-right CDU/CSU. In the 1998 elections their combined share of the vote was 77%. By 2021 that had fallen to just under 50%. In France and Italy, more voters are now supporting parties of the hard right and hard left than the classic centrist parties.

Italy was hit by de-industrialisation first, and has gone further down the line of political radicalisation. Since the start of the euro, Italy's has generated almost no productivity growth. Over the last 20 years, I have spent much time in Liguria, a once prosperous coastal region in north-western Italy, bordering France. It is still one of the most beautiful spots in Europe. The most outwardly visible sign of economic decline is abandonment - dereliction of shops, houses and farmland. It is a dying land.

The European Commission (https://www.europeandatajournalism.eu/eng/News/Data-news/Italy-is-stuck-in-a-European-brain-drain) classified Liguria as one the European regions worst affected by brain drain. Smallhold olive farming has been one of the main agricultural sectors, but has become progressively less lucrative. Your best bet to find a job in Liguria is through family connections. Not many people there have a rational reason to vote for centrist political parties, who have allowed this decline to happen over several decades.

The story of Liguria is not unique. Neighbouring Piedmont to the north is also on the Commission's list of regions in seminal decline. This is the land of Fiat, wine and truffles. Another northern Italian province affected is Friuli-Venezia Giulia in the north east. It's capital is Trieste. It had previously been one of Italy's most developed parts, with lots of small and medium-sized enterprises.

Three German states, all in the east, are also on the European Commission's list of despair. These are the strongholds of the Left Party and of the AfD, the far-right party.

Germany has been relatively lucky. It benefited from cheap labour from east Europe and cheap gas from Russia. But this is over now. The decline of German industry there is as foreseeable as the lack of a political willingness to address the consequences.

In Germany, like in France and Italy before, the extremists are gaining ground. Sahra Wagenknecht, probably the most prominent politician of the hard left, is currently contemplating launching a new party that seeks to renew ties with Vladimir Putin, and that opposes Nato membership and weapon deliveries to Ukraine. Polls have shown that a Wagenknecht party would have support of 20% of the electorate. I see the potential of a combined far-left, far-right right vote in Germany at around 30%. The costly Green energy transition is also driving voters away from the centre. The latest is a law to force home owners to upgrade their heating at an immense cost.

There is still a centrist majority in Germany, and there will be after the next election. But it will take progressively greater effort to govern from the centre. Germany has a three-party coalition for the first time. The Netherlands has four parties. Belgium has a seven-party coalition. If society fragments, so does the political system.

Is the decline of the centre reversible? In theory, yes. In practice, I do not expect this to happen, because the centre is not addressing the causes of why it is losing support: the addiction to the short-term fix. This is how we ended up with quantitative easing, fiscal austerity, lockdown, and economic sanctions, all with massive, unaccounted for long term consequences. What appears right in the short-term is rarely the right thing in the long run. From the perspective of all of those policies, we are already living in the long run.

I am with Yeat's on this. "Mere anarchy is loosed upon the world."

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