Revenge of Disaffected Europe Risks Crisis Sparked in Greece
Starting with elections this Sunday in Greece and heading west to Ireland via Britain and Spain, polls show Europeans will vent their anger over issues from widening income disparities and record unemployment to unprecedented immigration.
For Athens pensioner Irini Smyrni, the moment she’d had enough was when her younger daughter lost her job with the government last year. For Dublin florist Nicola Johns, it was when her business fell behind on rent.
“We pay, we pay, we pay,” said Smyrni, 73. “Our homeland unfortunately is taking us backwards -- paltry wages, miserable pensions -- and we’re looking for something better.”
English electrical technician David Liddle wants someone to stick up for people like him rather than immigrants and “scroungers.” Virginia Sanchez, an unpaid university researcher in Madrid, said she just grew tired of being failed by the usual politicians unable to improve her prospects.
“I keep going because there’s nothing else to do,” said Sanchez, 23, who graduated in biology last year.
Lost CitizensDisaffection with what is seen as a ruling elite and a sense of being left behind in an increasingly globalized world are complaints heard across Europe on varying points of the political spectrum as the continent struggles to recover from successive waves of financial and economic crises.
“Political elites have lost track of their citizens, who feel insecure amid all the economic and social pressures,” said Daniela Schwarzer, director of the German Marshall Fund’s Europe program in Berlin. “There’s a growing questioning of the political establishment across Europe.”
European Central Bank President Mario Draghi announced on Thursday the latest efforts by his monetary policy makers to foster economic growth in the euro region. The bank plans to inject about 1.1 trillion euros ($1.3 trillion) into the financial system. It’s unlikely to make enough of a difference to deter people from protesting at the ballot box.
People are abandoning parties used to being in government, those deemed safe to lead by creditors, investors and European bureaucrats.
Political Risk“If the moderates of Europe do not get together and change things in a meaningful way, I believe there is a risk that the political extremists will be the biggest threat to the euro,” Ray Dalio, founder and majority owner of the $160-billion hedge fund manager Bridgewater Associates, said in a panel debate Thursday at the World Economic Forum in Davos, Switzerland.
This weekend, Smyrni will vote for Syriza, which has pledged to halt the spending cuts that were tied to Greece’s financial rescue. The party looks like it could unseat the government after narrowly losing in 2012. Liddle has switched allegiance to the anti-immigration U.K. Independence Party before an election on May 7.
Disintegrating EuropeSanchez says Podemos in Spain is giving her hope as the party, founded only last year, tops opinion polls before a vote by the end of this year. Sinn Fein is doing the same for Johns. Irish elections are due by April next year at the latest.
“The underlying current of voter migration starts in Greece and is reflected elsewhere,” said Jens Bastian, an economist and former member of the European Commission’s Greek task force. “If you look at what may happen in Britain or Spain, and you still have a Syriza government in power by then, you’re looking at a completely different Europe.”
In the extreme, it’s a period that could lay the foundations for Greece leaving the euro and the U.K. ditching the European Union, unraveling decades of integration since World War II. At the least, it’s likely to send shockwaves through parliaments and financial institutions.
The euro has declined more than 14 percent against the dollar in the past year. In other currency markets, traders expect the pound to react to political wrangling after the U.K. election, with implied price volatility against the dollar for the next six months climbing to the highest since June 2012.