And so another centre-left government bites the dust in Europe: Portugal’s Socialist prime minister Jose Socrates conceded defeat after elections on Sunday delivered a clear majority to the likely centre-right coalition of the (confusingly named) Social Democrats and the People’s Party. Social Democrat leader Pedro Passos Coelho will be the new prime minister.
The election was called after Socrates failed to win a parliamentary majority for his austerity plan to address Portugal’s economic crisis. The opposition has promised that it will cut government waste, bring down debt and basically do what the EU and the financial markets say it has to. According to the BBC, Passos Coelho said “I want to guarantee to those who are watching us from abroad that Portugal does not intend to be a burden for the future to other countries.”
Voters seem to have believed him, and to have been unpersuaded by Socialist warnings that he would pursue a “radical right-wing agenda”.
This has been the pattern now for the past two years: left-wing governments have been falling like ninepins, and European voters have been flocking to free-market and centre-right parties. Spain is the the only major EU economy where the left is still in power, and local elections there last month confirmed what was already likely, that the right will take power when the next general election is held (it has to be by next March).
While Europe is a diverse place, the common theme across most of it has been economic troubles and the choice of an appropriate strategy to tackle them. Voters have given a clear verdict that they oppose the Keynesian strategy of deficit spending and want governments that will embrace sound finance and cut debt — and that they are willing to wear the resulting austerity measures provided they think the government knows what it is doing.
It’s hard to think of an occasion where the European public has spoken so clearly with one voice before. It may or may not be the right economic strategy (although I happen to think it usually is), but running against debt and deficits is proving the path to political success.
That provides an explanation for why Julia Gillard and Wayne Swan have stuck so doggedly to their strategy of deficit reduction. They know that, regardless of the economic merits of additional debt (and Australia, having come through the global financial crisis mostly unscathed, is in a different position to the European economies), allowing the opposition any opening in that direction would be suicidal.
But it also raises interesting questions in relation to the future of the world’s largest economy, the United States.
Last year’s congressional elections delivered big gains to the Republicans on a campaign against deficits and debt, painting the Obama administration as high-spending and irresponsible, and they hope to repeat the success in next year’s presidential contest. And there is no doubt that America’s economic woes are in some ways as serious as those in the EU’s troubled southern tier. But there important differences between the Republicans and their European counterparts.
The Republicans simply have no tradition of being serious about balanced budgets and debt reduction. Deficits in the US ballooned under the Bush administration, and Republicans’ claim to have turned over a new leaf is not entirely credible. They are hard to pin down to realistic ideas on spending cuts, and the cuts they do propose are pretty clearly driven by political rather than economic imperatives (and as a result are much less popular than the idea of debt reduction in the abstract).
Unlike the centre-left in Europe, Barack Obama came to power facing an economic crisis that was clearly of his opponents’ making. While he inevitably now has to take ownership of it to some extent, he might reasonably hope that voters will still be wary of turning back to the GOP to fix things.
Moreover, the European centre-right parties have also shown themselves to be — to put it bluntly — sane. Reasonable people can disagree about their economic policies, but on a range of other issues they are well within the political mainstream. The Republican party, however, has put itself in hock to the fundamentalists: anti-choice, anti-science and anti-modernity. They may yet succeed in imposing on it a platform or a candidate that the American public will be unable to embrace.
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