Fade to Grey

Last week, I was in Sevilla, the capital of Spain’s southern region, Andalucia, where a political earthquake is expected in March.  Recent polls suggest that the conservative Popular Party will win an absolute majority in the regional elections with 45% and hand the governing Socialists, the PSOE, a massive loss in the part of the country that has always been considered their stronghold and where they have governed continuously since 1982. This is on top of the PP’s big win nationally in November.

The mood among PSOE members in the south is rather grim. One former elected official told me he thought the party could disappear.  While such a fear is unwarranted – this is not a replay of the utter collapse of the governing UCD in 1983 – there are good reasons to be concerned about the state of the party.

The party is hemorrhaging members.  The latest party census shows that they have fewer than 220,000 members, about a fifth of what the PP has, a very different situation from Northern Europe where social democratic parties dwarf others in size as in Sweden or are roughly equivalent to their main conservative opponents as in Germany. Half of the PSOE’s members are between 46 and 65 years old while merely about six and a half percent are under thirty, suggesting that it is neither renewing itself generationally nor appealing to young people.

And while across Europe, the governing parties seen as responsible for the economic crisis have been thrown out of office, it is interesting that in Spain at least, the distribution of votes shows that the masses of unemployed Spaniards were just as likely to vote for the PP as everyone else.  Of course, maybe it's not surprising that the left, in this case the PSOE, did not get a slight bump as one would normally expect from those most affected by the crisis and cuts in social spending.  This is part of the prevailing 'throw the bums out' mentality everywhere on the continent.

Still, I think the implications of the crisis are somewhat different for social democrats in Southern Europe than in the North.  For the parties in the South, the road ahead, and back to power, is likely to be more difficult. The PSOE, the PS, and PASOK were formed after the democratic transitions of the late 1970s and do not have a history of being mass, class-based parties in the way, say, that the German SPD does.  Especially in Spain and Greece, where they came to power quickly, they have been electoral and patronage machines with few roots in civil society.  In Portugal, the PS's weak social ties are explained by slightly different factors but they nonetheless are a fact.

It is noteworthy in the Spanish data presented above that students are the one group where support for the conservative PP was well below average.  Students, of course, form one of the sectors hit hardest by both the crisis and potential cuts, given a high youth unemployment rate, rising university fees and a strongly dualistic labor market. But the PSOE did not pick up their votes either; indeed, students were also less likely on average to vote for the Socialists. Their votes went disproportionately to the communists and the recently formed UPD, a sort of liberal party. This rather highlights one of the problems the left in the south may face in terms of their social base. For reasons related to patterns of party formation and organization stemming from their transitions, the left in the South has a double task. In contrast to northern European socialists who must convince their members and supporters about the viability of a left program in an age of austerity, those in the South have the added complication of figuring out who their base is. 

Higher Education and the Crisis

Yesterday, on the way into town from the airport in Seville, where I am giving a series of talks, my university host and I were talking about the state of higher education and the economic crisis.  He was bracing for another round of pay cuts he and his colleagues fear are in the works on top of the 5-10% they took as the slowdown in the economy started.

Higher education in Southern Europe is an area ripe for reform.  University systems in the region tend to be inefficient, highly politicized and bureaucratic.  At the same time, the differences between the north and the south in terms of the relationship between unemployment and underemployment, and educational attainment are illuminating. A recent study by Gallup shows that at the highest levels of education, the same lower levels of unemployment characterize the citizens of both Northern and Southern Europe - about 5% - in both regions. It is at the lower levels of educational attainment (that describes a larger percentage of southern Europeans) where the big gaps exist.  Here, although those with lower educational levels have higher unemployment rates in both the north and south, unemployment rates of this group are roughly twice as high in the south as the north. The report concludes that in Southern Europe “there is an oversupply of labor for low-skill jobs, and a shortage of highly skilled workers …that limits their potential growth.”

This is related to the S&P’s conclusions in its latest round of downgrading the debt of many European countries that “problems are as much a consequence of rising external imbalances and divergences in competitiveness between the EMU’s core and the so-called ‘periphery’.” Reforming and investing in better higher education would be one way to help close the gap by raising the skill level and productivity in Southern Europe.

How likely is reform to happen? As Rahm Emanuel so famously said, ‘never waste a good crisis’ and some see in the current one a silver lining. In some ways, it may provide opportunities for reform that did not exist previously.  This month, Science published an article on the state of Greek higher education. It describes the precarious state of universities in a country where few institutions are internationally competitive. The crisis has caused the reduction in salaries by 20% and budgets halved.  However, it also has led to the passage of a new law restructuring the system, which is plagued by highly politicized university administrations that have always blocked reforms.  While university rectors have gone to the Supreme Court to block the law, it has wide backing in Parliament and a new law governing research is expected to have an easy passage next month.

It is also possible that just as we hear that ‘more Europe’ is the solution to Europe’s financial woes, ‘more Europe’ may become part of the debate about investments in the area of higher education and research. A very recent paper by Jo Ritzen and Luc Soete for the EU think tank, Notre Europe, notes that European institutions have existed along side national ones for a while now to help promote research and that they had already begun to overshadow them before the crisis hit.  The authors view the crisis as a way to further the process and move more authority to European funding institutions. One change they call for is the transfer of public funding in basic and applied research from the national research councils of the member states to the European Research Council. They view the national organization of research as inefficient and stifling of innovation.  

Whether member states would willingly cede their funds to a European agency remains to be seen. I think it is clear, however, that with the crisis in many countries, scientific research will need to rely more heavily on European funds; Greece, for example, is already almost entirely dependent on European structural funds for its research budget. So, whether we or national governments who have strongly held the view that higher education is their, not Europe’s domain, see this shift as a good or bad thing, I think there is likely to be some momentum toward more Europe and more coordination in research investments.

We Have Lift-off

At least that was the hope for yesterday’s speech by Ed Miliband, the head of the British Labour Party.  It was hyped for days as his re-launch by the media, who see his poor standing in the polls and rumors in the party as evidence that his days as leader are numbered.

Many of the post-mortems on the speech are obsessing about whether it was a strong enough performance to get his leadership back on track.  For what it’s worth, the consensus in the press is no, not really. That seems, though, at this point – 16 months into his leadership and three years before the next election- to somewhat miss the point: Labour is marginally ahead of the Conservatives even if Miliband’s own popularity is currently low and they should be doing better, the party does not jettison its leaders easily and it’s not clear who else in the party would gain enough support to replace him.

More to the point, this was an attempt to re-launch the Labour Party and more boldly, the politics of the Left in general.  The speech buries New Labour. By focusing on the fact that the days of Labour victories during boom times are over, Miliband laid out a program (admittedly shorter on specifics than one might hope) for a new progressive politics in harsh times.  He acknowledged that a Labour government in 2015 would need to make cuts but his is a rejection of the austerity sweeping Europe. He argues that the deep cuts that the Chancellor has imposed to lower the deficit (and that most of the other European countries with debt crises are doing) have not grown the economy but simply made the problem worse.

Miliband’s argued for a fairer distribution of economic rewards and a combination of higher taxes at the top as well as cuts. Some of his main points; “First, reforming our economy so we have long-term wealth creation with rewards fairly shared. Second, acting against vested interests that squeeze the living standards of families. And third, making choices that favour the hard-working majority.”

Will it work? Hard to say.  Many of the points in the speech such as the emphasis on the famous ‘squeezed middle’ or attacks on crony capitalism are ones that he’s been pushing for some time but his thunder on them has been stolen as the coalition has embraced them as their own.  It’s unclear whether the still strong Blair wing of the party will support what they see as attacks on business. He still needs to provide some specifics of actual policies that will lead to the job creation he envisions or how you encourage companies to ignore the short term interests of their shareholders.  In this respect, it was not nearly as strong a speech as the one recently delivered by Obama in Kansas. And who wins the British election in three years time will have more to do with whether the economy is recovering at that point.  But, it is the beginning of a conversation in Europe about both the limits of austerity and the old politics of the Left.  For that reason, it’s worth listening to.

Is Social Democracy Dead?

Although the financial crisis has caused a fair number of casualties for incumbent governments, with voters holding governing parties of whatever political stripe responsible for the crisis, these are especially hard times for social democracy.  Since Lehman declared bankruptcy in 2008, social democrats have lost 19 of 24 elections in Europe, prompting a lot of speculation about whether social democracy is dead.

Reports of its death are certainly premature and some feel on the left that publics will inevitably tire of austerity and may bring them back to power in those countries experiencing tax hikes and stark cuts in services and entitlements. But there is no denying the sense of malaise with respect to the social democratic project and its identity. Where social democratic parties are blamed for the crisis and have been voted out, they’ve lost credibility as stewards of the economy, making it essential that they regain the confidence of voters by offering a convincing argument that the can indeed be trusted again with the keys to the Treasury.

But how? This clearly takes time, the articulation of a viable alternative and possibly an admission to the public that some of their policies while in power were flawed. All of these can exacerbate internal party tensions.  These dynamics are playing out in several countries.

In the UK, Labour Party leader Ed Miliband is struggling both with growing internal criticism of his leadership and getting his vision for a radical rethinking of Labour politics across to the public.  Yesterday, Lord Glasman, one of the leaders of Blue Labour and ally and close supporter of Miliband, published a piece in New Statesman that ignited the Twittersphere and sent conservative-leaning media into a frenzy.  Glasman’s claim that Miliband, who already trails Cameron in polls, has “no strategy, no narrative and little energy” comes on top of weeks of relentless pounding by the press that the party leader is not up to the task and whispers of discontent within the party.

But in many ways, when read in context, Glasman's piece is not the act of treachery many are making it out to be, even if this loose cannon academic ought to have known how it would be portrayed. Marc Stears, also aligned with Miliband, defends Labour’s leader as having to navigate what is essentially new territory for the Left: coming up with a program in an age of austerity when the traditional toolbox of the Left is empty.

It is true that Miliband has been slow to articulate his vision for reconfiguring Britain and addressing the ‘squeezed middle’ and he may have waited too long to dispel the view that he is unelectable.  And aside from any missteps by the leader, Labour may simply have to wait it out until they are no longer blamed for the crisis in Britain by voters, something that would be true no matter whom the party had selected as head. 

But the next few weeks will be interesting as Miliband does try to connect with voters with his vision for a non-Blairite, non-Brownite Labour program. There are hints of that vision in various recent speeches: his focus on responsible rather than predatory capitalism­­, addressing the anger and hopelessness of many in the middle, but so far there have been few concrete policy formulations around these.  If he is able to articulate some, he may set a tone and agenda for the European left, and in the process perhaps even save his job.

Next post, I’ll look at some of the internal leadership struggles in Spain as the Socialists there grapple with electoral defeat and a crushing economic situation.

Magyar Mayhem

One of the questions prompted by the Eurocrisis, notably with respect to Greece, is whether there are mechanisms for a country that is not complying with the obligations of membership to be sent packing from EMU. Today, though, Hungary makes us wonder what might happen to a country that isn’t living up to expectations of EU membership, such as being a democracy.

Trouble has been brewing for some time. A number of constitutional changes that were passed by the Hungarian Parliament last year went into effect yesterday that have not just the opposition and human rights groups worried about their non-democratic nature but also the EU and the State Department concerned as well.  The ruling party, Fidesz, led by Prime Minister Viktor Orbán, governs with a two-thirds majority (but received only 53% of the vote) and pushed through a constitution that has been called a clear departure from shared European standards for liberal democracy.

Most alarming to observers are changes to electoral rules and the independence of the judiciary, limits on the freedom of religion, and restrictions on the press. The cumulative effect of these is to ensure that Fidesz will be very hard to remove from power, even as they lose support from 40% of those who voted for them. Even if they were to be voted out of office, the bars for future changes will now be impossibly high for a government with anything but a super majority, an unlikely electoral outcome. These constitutional reforms are on top of other measures such as the law passed in the last parliamentary session of the year last week that effectively destroys the independence of the Central Bank and which caused EU and IMF officials to break off talks on an aid package for Eastern Europe’s sickest economy.

But its not just about ensuring that Fidesz has a vice grip on power; they are waging a culture war that is at odds with many contemporary European and cosmopolitan values by acts such as enshrining the definition of marriage as the union of a man and woman in the constitution or the appointment of outspokenly anti-Semitic management at one of the country’s leading theaters who have banned non-Hungarian works from the New Theater’s repertoire.  Even the official name change of the country from the Republic of Hungary to simply Hungary has a somewhat ominous feel.

While the current Constitutional Court (whose sitting members will surely change with the new measures) two weeks ago unexpectedly struck down certain parts of the constitutional changes like withdrawal of official recognition of all but fourteen Churches and some aspects of the press restrictions, both the US and the EU are clearly worried.

Hillary Clinton has been voicing her concerns about Hungary’s drift away from democracy for six months and just last week sent a letter to Orbán. The US Ambassador and other State Department officials have also been publicly expressing frustration and dismay with the country’s trajectory. For its part, the EU is plainly apoplectic about the changes to the Central Bank.  Before the passage of the laws restructuring the bank’s authority, EU Commission head José Manuel Barroso sent Orbán a letter urging him to withdraw the bills, saying the Commission had serious doubts about whether these laws would be compatible with the EU treaty.

But aside from burying the Prime Minister in correspondence, it’s not clear what options the US and the EU have.  Too much pressure and they play into the hands of Orbán who will use the interference from foreigners in his nationalist rhetoric. And, while it has in no way come to it in the case of Hungary, kicking a country out of the EU would be as hard as out of EMU, which is to say, pretty much impossible as a widely cited ECB paper has argued. 

Yet for the EU, Hungary raises the question of what to do with countries that behave badly in terms of their politics rather than simply their finances. If Hungary continues down a truly non-democratic path as its critics fear, one hopes that the EU will be capable of providing some meaningful answers to that question.