Populists Keep EU on Edge as Focus Shifts to 2019 Elections

(Bloomberg) -- With the European Union gearing up for legislative elections in 2019, the battle between EU supporters and opponents is shaping up to be a lot like many of the contests in this summer’s soccer World Cup: back and forth, passionate and down to the wire.

Last year’s election of French President Emmanuel Macron and fourth-term victory of German Chancellor Angela Merkel put a brake on an anti-EU trend exemplified by Brexit. But just as the EU ship was steadying itself, Italy acted as a buffet by producing a populist government composed of parties far from the European mainstream.

So there’s all to play for in the European Parliament elections in May.

“There will be a lot of things happening in terms of the more anti-European parties and I think they will have quite a strong percentage overall,” said Guntram Wolff, director of the Bruegel think tank in Brussels. “The question is: will these get organized and unify in one party group? If so, they could become the largest or the second-largest group in the Parliament.”

The legislative elections will be a barometer of the anti-establishment forces at play in the developed world. Those forces already brought about two watershed events in 2016, when Britons voted to leave the bloc after four decades of membership and Americans sent Donald Trump to the White House with an “America First” agenda that challenges an even longer history of U.S. international engagement.

Political Theater

Beyond the political theater, the ballot has implications for how the EU is governed. In addition to passing laws along with EU national governments, the 28-nation Parliament approves the leadership of the European Commission, the bloc’s executive arm. The commission proposes EU legislation on everything from auto-pollution limits to mobile-roaming fees, acts as the bloc’s antitrust authority, administers its 140 billion-euro ($160 billion) annual budget, negotiates trade accords and runs a foreign service.

A very strong showing by populist forces in the Parliament, where no faction enjoys an absolute majority, could put them in a position to complicate or even block the formation of a new commission. European parties nominate candidates for commission president and national capitals propose appointees for the rest of the leadership team, whose individual members get scrutinized by the Parliament before its vote on the whole formation.

Populists Keep EU on Edge as Focus Shifts to 2019 Elections

While the twice-a-decade elections to the EU Parliament have traditionally revealed more about the direction of national politics than of European policies, next year’s vote may end up being a verdict on the bloc itself. That’s because, after a decade of debt-crisis firefighting and a three-year battle to curb refugee waves from the Middle East and Africa, the EU’s role in national life has become a central part of domestic political debates.

“Europe may be on the verge of a more trans-national form of democracy -- one that is polarized around very basic pro- and anti-EU positions,” Alberto Alemanno, a professor of EU law in Paris, wrote in a June paper for Carnegie Europe evaluating the upcoming European legislative elections. The paper’s title: “Europe Up for Grabs.”

In a sign of the stakes, Steve Bannon, an architect of Trump’s election victory and his White House strategist until a year ago, has set up an organization in Europe to rally anti-EU forces. It’s called the Movement.

‘Right-Wing Revolution’

Europe’s pro-business Liberal party, a traditional staunch supporter of the EU, called Bannon “our opponent” in a petition earlier this month. “This is urgent,” said the party known as ALDE, the EU Parliament’s fourth largest. “Steve Bannon plans to spark a right-wing revolution in Europe.”

For that to happen, anti-EU forces may have to overcome a handicap that can make them seem like their own worst enemies: division. In the EU Parliament, where the Christian Democrats and Socialists are the two biggest factions, the bloc’s opponents are scattered.

Nigel Farage, the U.K. Independence Party member who helped engineer the Brexit vote, heads a faction that competes for anti-EU attention with an alliance that includes the French party of Marine Le Pen.

Less United

The two Italian parties that form the country’s ruling coalition are less united in the EU Parliament, where Luigi di Maio’s Five Star Movement is part of Farage’s group and Matteo Salvini’s League belongs to the faction with Le Pen’s allies.

Complicating the overall picture is the presence of EU skeptics within the Christian Democrats -- also known as the European People’s Party -- and within the assembly’s No. 3 group, the European Conservatives and Reformists, or ECR.

The EPP includes the Fidesz party of Hungarian Prime Minister Viktor Orban, who has faced criticism across Europe for backsliding on democratic standards. The ECR is home to members of Poland’s ruling Law & Justice party, which has provoked even stronger alarm on the continent by pursuing Orban-like policies.

Sharply Right

The Christian Democrats as a whole have shifted sharply right in their rhetoric, seeking to lure voters who have drifted to more nationalist parties. The future of the ECR, often a key player in EU Parliament votes on draft legislation, is up in the air because the group’s largest national contingent is made up of U.K. Conservatives slated to be absent after Brexit in March.

Brexit itself may end up hurting the populists because of the political divisions it has sown in the U.K. government of Prime Minister Theresa May and the economic uncertainty it has created for the country.

“The political mess in the U.K. tends to support the EU establishment forces," said Bruegel’s Wolff.

©2018 Bloomberg L.P.