The fall of Europe and of the liberal order?

The New York Times has an op-ed by Roger Cohen on the “Unmaking of Europe”. All over the Western world the institutions that identify liberal democracies – such as free press and an independent judiciary – are under attack from populist, xenophobic and nationalist parties. Cohen highlights that mainstream parties and media have been bypassed as social networking tools enabled populist political leaders to communicate directly to people. Cohen ends on a negative note, arguing that democracies have to adapt and to confront their inner adversaries.

Populist politicians pledges are totally unrealistic, according to the Director of the Munich based Institute for Economic Reseach (IFO) Clemens Fuest: populist leaders promise expansionary macroeconomic policies without taking into account unintended consequences on inflation or public debt. In order fight the populist tide, the author argues, mainstream parties need to incorporate populists into governing coalitions. Moreover, Fuest pledges for more investment in education and vocational training to the benefit of low earning individuals, who are most likely to vote for populist parties.

On the Harvard Gazette Christina Pazzanese interviews Bart Bonikowski and Grzegorz Ekiert. Bonikowski claims that the rise of populist forces poses indeed a meaningful threat to the Old Continent and to US-Europe relations. According to Ekiert, especially a success of Marine Le Pen in France would plunge the EU into chaos. The two scholars highlight as well that a fragmented EU could undermine the stability of the Middle East. According to Michael Ivanovitch (CNBC), as fragmented as European politics might look at the moment, the monetary policy decisions are in the hand of a solid European Central Bank and the stability of the euro is not at stake. Moreover, some of the threats to the stability of the EU might be overestimated: Marine Le Pen is bluffing when she calls for the exit from the Eurozone and the European Union, as she does not have enough voters to back this position. The world-wide political scene is experiencing a clash between liberal and illiberal forces: on Die Welt, however, August Winkler warns against excesses of pessimism, and argues that there might be space for a renewed defence of the liberal values that forged the establishment of modern liberal societies.

Focusing on the French Presidential debate, Satyajit Das (The Independent) writes that the right wing Front National has an appeal to left wing voters. Le Pen’s economic policies are close to those of the centre left and that her French nationalism attracts voters from both the left and the right. Similarly, on The Guardian Josh Bornstein focuses on the responsibility of the Left when it comes to the rise of populist forces. Over the past ten years of crisis progressive forces have been unable to come up with a concrete alternative to neoliberal policies. Meanwhile, “the right’s capacity to jettison its principles, exploiting racism and xenophobia […] cannot be matched”, Bornstein claims.

Grexit: the clash between the IMF and Germany

On Bruegel, Silvia Merler discusses the clash between the International Monetary Fund (IMF) and the European institutions on the sustainability of the hellenic debt. One of the main points of divergence lies in the different assessment of the health of the banking sector. Merler suggests that the high ratio of non-performing loans (NPL) and non-performing exposures (NPE) in the balance sheets of financial institutions raises worries and gives credit to the IMF’s position.

On The Independent, IndyVoices recalls that the Greek debt disaster keeps being a humanitarian issues as much as a financial one. The authors argue that, as of today, Greek society can’t bear any more cuts to the medical sector or to pensions: to accomplish the path of economic reset, besides structural reforms, the country would need both, a debt relief and a devaluation of its currency.

On Social Europe, Björn Hacker and Cédric Koch take issue with Wolfgang Schäuble, Germany’s Finance Minister, as the latter recently referred again to the possibility of a Grexit. The authors investigate the “stubbornness” of the German élite to insist on austerity and financial stability. According to Hacker and Koch, the policy focus must be explained by the fact that the majority of actors –  in academia and in the economy – share indeed the economic vision of the government. Moreover, they argued that over the past few years, any alternative proposal couldn’t find a proper backing within the political landscape.

However, The Economist underscores that with the showdown of Martin Schulz into the German national political arena, the country might experience a clear ideological clash in the upcoming electoral campaign. According to the British magazine, the candidate of the SPD will try to score emphasising European solidarity and more labour market regulation.

This Ideas Monitor is by Carlo Burelli and Alexander Damiano Ricci

Photo Credits CC Arvell Dorsey Jr. 

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