The Populist Wave: What the Austrian and Italian Elections Mean

Next year will be a test for whether Europe’s leading parties can withstand the populist revolt that has already shaken the continent. There are national elections in France, Germany, the Netherlands and Norway. Populist parties are running ahead in the polls in France and the Netherlands. In Germany, the Alternative for Germany could upset the grand coalition of Social Democrats and Christian Democrats. What’s at stake would be the cohesion of the European Union – a political alliance that was already dealt a serious blow this year by Great Britain’s decision to leave the EU.

Last Sunday, two elections occurred that while not significant in themselves were seen as harbingers of what might occur next year. The Austrian election was for president, a largely ceremonial job; that in Italy was a referendum that would have strengthened the federal government at the expense of the regions. In both cases, populist parties – one more associated with the right and the other with left – were challenging the prevailing balance of power.

In Austria, the Freedom Party, founded by ex-Nazis in 1956, but now pretty much a standard anti-immigrant populist party without a pan-German ideology, has been threatening for two decades to displace either the left-center Social Democratic or right-center People’s Party as one of Austria’s two major parties. In the last 2013 parliamentary elections, it came in a close third with 21 percent behind the People’s Party with 24 percent and the Social Democratic with 27 percent. As has happened before, the two leading parties formed a “grand coalition” with a Social Democratic chancellor.

Austria’s economy largely escaped the Great Recession, but the influx of asylum seekers from the Middle East during the last two years created a political crisis, particularly among non-urban working class voters whose standards of living, like those in the U.S., has stagnated. Austria’s Chancellor Werner Faymann initially joined German Chancellor Angela Merkel in backing open borders for the migrants. Austria became a transit point as well as a destination for the several million migrants from wars and devastation. The migrants committed some very high-profile crimes, including a gang rape.

Faymann reversed course in the spring and closed Austria’s border, but the political damage was done. In the first round of the presidential elections, the Freedom Party candidate Norbert Horfer finished far ahead of the field with 36 percent. Behind him was Alexander Van der Bellen of the erstwhile insignificant Green Party with 22 percent. The Social Democrats and People’s Party were running fourth and fifth with 11 percent each. That suggested massive public displeasure with the Grand Coalition.

In the final round of the presidential election in May, there was a virtual tie, and the Constitutional court ruled there would have to be a re-vote. In this election, Van der Bellen came out well ahead with 54 to 46 percent. It’s hard to say why, but with the border closed, the asylum-seeker issue probably receded in importance. Donald Trump’s victory may have scared some voters from backing even the relatively mild-mannered Horfer.

The Freedom Party could make a comeback in the more important 2018 parliamentary elections, when the vote is numbered proportionately, and when the party getting over 30 percent could win an election. Still, the Freedom Party has been part of the Austrian government before, and has proven ineffectual. It is center-right in its economics, and is mainly distinguished from the other parties by its stand against immigration, but as long as Austria does not enjoy a huge influx of immigrants, the party doesn’t have a lot to offer voters.

Italy is a different matter. It’s Europe’s fourth largest economy, and the third largest in the precarious Eurozone. Its unemployment rate climbed to over 13 percent during the Great Recession and is still 11.6 percent. Its youth unemployment was 44 percent in March 2014 and is still close to 40 percent. Its banks have remained saddled with bad loans, and its industries are treading water. In addition, Italy continues to suffer from pervasive political corruption, which in the early 1990s discredited and destroyed the leading Socialist and Christian Democrat parties. Billionaire Silvio Berlusconi, whose sexual exploits and intermingling of politics and business foreshadowed the election of Donald Trump, was finally forced to resign in 2011 during the economic downturn.

After two years of a technocratic caretaker government, the Democratic Party, founded in 2007 out of older socialist, social-democratic and centrist parties, became in the 2015 elections the largest party in parliament and formed a government headed first by Enrico Letta and then by Matteo Renzi, the current prime minister. But Renzi and the Democrats have proven no more successful than Berlusconi is pulling Italy out of recession. That left an opening in Italy, as it did in Spain and Greece, for a leftwing populist party.

Beppe Grillo was a popular political comedian who had made his name by getting kicked off the government television channel for making jokes about the corrupt practices of a Socialist Prime Minister who ended up fleeing the country to avoid jail. In 2009, Grillo, who had become a crusader against Italy’s political corruption, and web designer Dianroberto Casaleggio, founded the Five Star Movement. The movement, which Grillo refused to call a “party” for fear of being associated with Italy’s parties, operated out of Grillo’s blog and social media and promoted “direct democracy” – Casaleggio’s software program was called “Rousseau” – through the internet, which would be used to nominate and elect candidates and to support or oppose legislation. Some people on the far left and in the center have described the Five Star Movement as “right-wing,” but that is definitely a misnomer.

The “five stars” in its title refer to public water, sustainable transportation, sustainable development, universal access to the internet and environmentalism – all planks that one would associate with the Greens. It’s for same-sex marriage – a controversial stand in Italy. The party favors term limits, a ban on convicted criminals serving in office – a big deal in Italy – and other political reform measures. And it advocates making unemployment insurance universal and providing some kind of guaranteed annual income – proposals that one would associate with the left rather than the right. It probably gets its reputation as a rightwing party from its opposition to open borders and its skepticism about the Euro. Neither are official positions, but are associated with Grillo.

Grillo wants Italy out of the Eurozone, but the movement itself only advocates a referendum. Many leftwing economists including Joe Stiglitz blame the inflexibility of the Euro for the plight of Italy and other countries in Southern Europe who, because of the Euro, have been unable to reverse their trade deficits by devaluing their currency, but instead have been forced to impose austerity upon their population. The Five Star Movement also doesn’t have an official position on immigration, but Grillo has denounced the government for opening Italy to a flood of asylum seekers from north Africa many of whom are economic migrants and don’t qualify for economic assistance from the European Union. And he has sometimes spoken harshly of the migrants.

But is that really a rightwing position? Italy has averaged about 160,000 such illegal migrants over the last three years. Proportionately, that would be as if the United States had annually welcomed each year for three years about 900,000 unskilled migrants who don’t speak the language and will require state support at a time when it had depression-level unemployment, especially among the young. Franklin Roosevelt, it should be recalled, opposed large-scale immigration during the Great Depression.

The Five Star Movement has enjoyed meteoric success in the polls. In the 2013 parliamentary elections, it got 26 percent in the polls, second only to Renzi’s Democrats. In the European parliamentary elections in 2014, it again came in second. It recently elected mayors in Rome and Turin. This year it led the opposition against Renzi’s constitutional referendum.

The referendum was originally ahead in the polls, but as it became associated with Renzi himself, who promised to resign if it lost, it fell in the polls and was soundly defeated last Sunday by 60 to 40 percent. Renzi has resigned, but it’s not clear what happens next. The next parliamentary elections aren’t scheduled until 2018. In the interim, the Democrats could still choose a prime minister to replace Renzi, or Renzi himself could have a change of heart, but the election showed that the Five Star Movement could win in 2018.

What it could do is another question. Grillo, 68, won’t run for office out of adherence to its own parties’ platform. He was convicted of manslaughter in 1980 when three people were killed in a car that he was driving. The Five Star Movement’s star politician, Rome Mayor Virginia Raggi, has had a checkered record in office. And like Greece’s populist Syriza party, the Five Star Movement may prove better campaigning than governing. But it nonetheless represents a striking rejection of Italy’s political status quo and a threat to the perilous reign of the Euro. It would be a thorny constitutional process, but if Italy were to perform its version of Itexit, that could doom the EU itself and plunge Europe into a deep political and perhaps economic crisis.

In sum, Austria’s election represented a reprieve from fears that the elections next year could represent an upheaval comparable to Trump’s election in the United States. But the vote on the Italian referendum was a warning sign that Europe’s prevailing powers-that-be could be in for a rude awakening.

John B. Judis is author of The Populist Explosion: How the Great Recession Transformed American and European Politics.