Thursday, April 19, 2012

Will the European economic crisis lead to the rise of new dictatorships?

In the early 1920s Europe was mostly democratic. Germany, Spain, Portugal, Italy and Greece all had democratic systems. They were all doomed to be replaced by dictatorships. The rise of the extremists who overthrew democracy was greatly aided by the Depression. The current downturn in Europe is the worst since the Great Depression. Budget difficulties have lead to austerity, which has lead to high unemployment. Extremists are once again on the march across Europe.

In Greece, support for the centrist parties that have ruled the country since the end of dictatorship in 1974 has collapsed. In 2009 the right-wing New Democracy and the left-wing PASOK won a combined 77% of the vote. The most recent opinion poll for the upcoming election shows these parties have collapsed to 38% of the vote. Voters have rallied to the far left parties like the communists, and anti-immigrant right-wing nationalists. As the New York Times reports, even neo-Nazi parties like Golden Dawn may pick up enough votes to get into Parliament. While illegal immigrants have replaced the Jews as the favored scapegoat, Golden Dawn has the paramilitary wing, fascist ideology and Holocaust denial typical of neo-Nazis.

However, the biggest risks to European peace and stability come from an extremist take over of a major European country.  The German Nazi Party got going amid the economic chaos of the early 1920s. Germany had been humiliated by defeat in World War One, and the Versailles Treaty demanded huge payments be made to the victors. The German government resorted to printing money and wild hyperinflation resulted. In 1924  the Nazis won 6.5% of the vote. Then, in the late 20s, the economy recovered and their appeal faded. In 1928 they won only 2.6% of the vote.

That might have been the end for them. However, in 1929 the Great Depression hit. Chancellor Bruning adopted austerity policies and the German economy suffered terribly. The popularity of extremist parties like the Nazis and the Communists surged. By 1933 the Nazis won 44 % of the vote.  Shortly afterward the Nazis outlawed other political parties and German democracy was dead.

Today in 2012, France is electing a new President and the center parties  are under enormous pressure. Under the euro, France has suffered from years of poor economic performance.  A double dip recession looks possible, with a growth forecast of only 0.4% for 2012. On the far right, the anti-immigrant, anti-euro Front National is lead by Marine Le Pen. They are polling at 16%. However the real story of the election has been the rise of the America hating Jean-Luc Melenchon. The leader of the neo-communist left front is at 16% in the polls. He is sometimes seen as a French version of Venezuela's Hugo Chavez.  Neither Melenchon nor Le Pen will win the first round of voting on April 22nd. However, it looks as if about a third of the vote will go to extremist parties. Their future chances are excellent if economic conditions don't improve.

The first European democracy to fall may well be Hungary. Like Greece, Hungary has a full on neo-Nazi party called Jobbik, which won 12% of the seats in Parliament in the last election. Meanwhile, the ruling Fidesz party is using the old Fascist trick of winning an election, and then changing the Constitution in order to entrench themselves in power. Professor Scheppele of Princeton writes about them here. The changes don't appear to be as far reaching as those pushed through by Mussolini's Fascists in early 1920s Italy or Hitler's Nazis in 1930s Germany, but the reappearance of this tactic is deeply disturbing. 

The European Central Bank, headquartered in Frankfurt, is currently focused on preventing inflation in Germany. To achieve that end, they have been willing to tolerate very high unemployment in the rest of Europe. Unemployment has reached 21% in Greece, 24% in Spain and 10% in France. This is politically dangerous.

It is true that 2012 is not 1930. The humiliation of defeat in World War 1, together with the Treaty of Versailles,  left some Germans wanting revenge. Nobody in today's Europe is interested in fighting another war.  European democracy today is better established today than it was in the 1920s. However, if the European Union, capitalism and democracy fail to deliver jobs, then people will look to other systems.

Forcing the rest of Europe to adopt austerity will force change, but it may not be the change that the ECB or Germany seeks.

Greek election opinion polls
French election opinion polls
Frum on the French election

No comments:

Post a Comment