Shane Markowitz
Despite prevailing early sentiment that the coronavirus pandemic and the anxieties associated with it could further fracture the European Union as a tumultuous Brexit process wound to a close, the bloc now finds itself more integrated and united than it has been in years.
As COVID-19 spread across the continent last year, mainstream EU leaders overcame their differences and found compromises on politically sensitive issues, ranging from pandemic recovery to climate change to the rule of law—and even a last-minute post-Brexit trade agreement with the United Kingdom. The many populist and euroskeptic parties that enjoyed surging support in the aftermath of the financial and migration crises of the past decade now find themselves increasingly marginalized.
For more traditional and mainstream parties, caution still remains warranted in light of continued economic tumult forecast for the years ahead. But if EU leaders use their political leverage prudently, pursuing further economic cohesion and integration while enhancing social well-being, the bloc could see a return to a more staid and conventional politics.
Even as some Europeans protested their governments’ stringent lockdown measures, opinion surveys showed a broad rallying of support for leaders across the continent in March, as COVID-19 fatalities climbed and the gravity of the pandemic became apparent. Although initially expected to be short-lived, those spikes in approval for mainstream leaders have largely remained intact. German Chancellor Angela Merkel currently enjoys a 71 percent job approval rate (up 18 points from a year ago), while Italian Prime Minister Giuseppe Conte is at 57 percent (up 12), and French President Emmanuel Macron is at 49 percent (up 9).
Mainstream political parties continue to benefit, too, across the political spectrum. Center-right ruling parties in the Netherlands and Austria, and center-left governments led by the Social Democrats in Denmark and the Socialist Party in Portugal, for example, all enjoy commanding leads in opinion polls in their respective countries.
Governments led by populists, meanwhile, are in the doldrums. Poland’s ruling party, Law and Justice, has seen its support plummet to 34 percent (down 8 points from a year ago) amid domestic policy disputes and a mishandling of the pandemic by Prime Minister Mateusz Morawiecki’s government. In Hungary, Prime Minister Viktor Orban’s Fidesz is still far and away the most popular party in the country, but its polling has been slipping, falling below 50 percent in recent months, its lowest numbers since 2017. The next parliamentary elections are scheduled for 2022, and while they are still far off, multiple opinion polls have indicated that a recently formed united opposition list could give Fidesz a run for its money.
With migration mostly out of the headlines, far-right opposition forces are faring no better. Matteo Salvini’s stridently anti-immigrant League is still the most popular party in Italy, but its support has nosedived to 24 percent (down 8 points from a year ago). Likewise, the anti-immigrant and euroskeptic Alternative for Germany is at a meager 9 percent (down 5 points). The Sweden Democrats, a hard-right party with neofascist roots, is at 20 percent (down 4 points). The Dutch Party for Freedom—now backed by 16 percent of the population, up 4 points from a year ago—stands out, but only because another, newer populist party, the Forum for Democracy, has collapsed to just 2 percent support (down 9 points).
Beyond this reversal in opinion polling fortunes, European leaders also achieved a string of policy victories over the past year. On pandemic recovery, the picture looked bleak in March as COVID-19 ravaged Italy and Spain. The resistance of Christine Lagarde, the president of the European Central Bank, to proposed joint aid and stimulus programs for the highly indebted economies of southern Europe sparked fury in Rome.
The many populist and euroskeptic parties that surged in the aftermath of the financial and migration crises of the past decade now find themselves marginalized.
EU leaders, however, were spurred into action by the depth of the crisis and the need to assuage citizens’ fears of a prolonged recession. At a summit meeting last month, EU leaders approved a $1.3 trillion budget and a separate $916 billion pandemic recovery fund, the details of which had been fleshed out in July and later tweaked by the European Parliament and European Council. At the time, European Commission President Ursula von der Leyen hailed the bloc’s achievement in overcoming long-standing disagreements on joint borrowing to invest in health care and a green and digital economy.
While the deal was not perfect—like all true compromises, it left no single party completely satisfied—it was an impressive feat of dealmaking. On the key issue of democratic backsliding in Hungary and Poland, the EU succeeded in incorporating a compromise mechanism on the rule of law into the budget, staving off a threatened veto of the budget from Warsaw and Budapest. In the wake of the deal, the recovery package, the mechanism on the rule of law, and the budgetary focus on climate are all widely popular, according to opinion polls.
Against this backdrop, the coming year is likely to provide further scope for policy innovation that could both advance EU integration and ward off a populist revival. However, political leaders will need to remain laser-focused on identifying pragmatic areas for compromise among European governments and more ambitious “man on the moon” moments like the European Green Deal.
The recently unveiled Digital Services Act, for example, could see the EU reinforce its position as a global leader in digital regulation by putting major tech companies under greater scrutiny and imposing transparency requirements on content curation and advertising.
The timely election of Joe Biden in the United States, meanwhile, will prompt a fresh look at foreign policy cooperation with Washington. The EU and the U.S. are, for example, likely to rejuvenate attempts at securing ambitious carbon target pledges from other countries. Biden and his European counterparts also agree on the need for carbon border taxes that can prevent carbon-intensive imports from undercutting domestic products that adhere to more stringent emissions standards. A joint EU-U.S. pact on a “green level playing field” could help incentivize a global shift to clean energy.
More broadly, on global trade, a reform drive could see Brussels and Washington partner to bring labor standards, environmental protection and respect for human rights to the foreground at the World Trade Organization. A revamp of the World Health Organization may also now be in order, given the lessons learned from the COVID-19 pandemic.
The recovery plan and the need to pay for it have also sparked momentum for the EU developing its own revenue sources, which could see the bloc directly taxing agreed economic activities. This would represent a notable shift from the arrangement currently in place, where the EU largely relies on proportionally weighted national contributions from member states for its seven-year budgets.
In addition to a carbon tax, EU leaders could close the deal on a digital levy, an expansion of the bloc’s Emissions Trading System, a financial transaction tax and a corporate tax. These new revenues could help the EU maintain its budgetary prowess beyond the pandemic era and become more agile in combating long-term problems like youth unemployment and inequality, which tend to feed populist movements. There have already been calls for a second round of EU recovery funding, though these proposals have so far been spurned by EU officials.
Lessons from the economic crisis of 2008, nevertheless, are a reminder that trust in political institutions can falter and populism often thrives during times of financial distress. If the economy takes a turn for the worse, the EU must be ready to confront the challenge with appropriate resources, lest illiberalism rear its ugly head again.
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