Workers abandoned by centre Left embrace economic nationalism

Amid the protracted battle by leading members of the EU Parliament to wrest more powers from the Council and Commission, few anticipated they would also acquire the power to transform national leaders into lame ducks over a single weekend.

Yet here we are. After the dire results recorded by their parties in the parliamentary elections, both Chancellor Scholz and President Macron carry the aroma of failure. European voters brought a variety of motivations to the ballot box, but boiled down many of them into a desire to stick it to their ruling parties.

Macron’s Renaissance tallied half the votes of Marine Le Pen’s National Rally, while Scholz’s Social Democrats fell to third place behind the AfD and the CDU/CSU.  Neither leader is likely to leave office before the end of their formal terms, but these elections cripple their ability to launch the sort of bold programmes needed by their domestic constituents and EU institutions.

The hyperkinetic French President responded by calling new National Assembly elections in a high-risk gamble to save his political mandate. Chancellor Scholz responded with his signature move when faced with a knotty problem: solemn words and little appreciable action.

Like Hemingway’s description of how families go broke “gradually, then suddenly,” the sudden drop in support for the mass parties of the Left happened after a long period of secular decline. The gradual process began after the European Left achieved its historic objective, the creation of the social welfare state, which was then embraced and defended by parties across the political spectrum.

The “then suddenly” commenced when the Left abandoned its traditional working-class support for the eco-nostrums of the Greens and the mass migration lunacy pushed by the “multicultural” Left.

Germany’s Social Democrats and France’s Renaissance became the parties of the educated urban elites and state employees. The traditional base of the centre Left, those industrial workers out in the provinces, were abandoned as energy prices surged, factories closed and migrants drained social welfare budgets across Europe.  The populist right eagerly scooped them up.

When the previous leader of France’s centre Left, Francois Hollande, visited the Socialist stronghold of Hayange in 2012 as part of his successful presidential campaign, he promised to protect the steel mill there from the nefarious plans of its owner ArcelorMittal.

But after his election, Hollande cut a deal with CEO Lakshmi Mittal that allowed him to close the works in Hayange in exchange for greater investments in other French mills. Hayange is now a bastion of support for Marine Le Pen.

Judging by the results of last weekend’s elections, Macron’s Renaissance cannot convince these French workers that it will defend their interests better than Le Pen’s National Rally can. 

Chancellor Scholz suffered for his apparent inability to manage an increasingly dysfunctional coalition at odds with itself over a range of sensitive issues. Germans like their politicians boring, and Scholz certainly is that, but they like competence even more, and by this measure, the Chancellor is failing and pulling the Social Democrats down with him.

Both the SPD and Renaissance are poised at the cusp of a dramatic shift in global politics away from free trade and toward protectionist regional blocs. 

China has spent decades pursuing national mercantilism, but now the United States is catching up, with vast subsidies directed to domestic industries and punitive measures aimed at inducing foreign companies to move production to American shores.

Whatever the economic merits of the protectionist proposals endorsed by Marine Le Pen and Donald Trump, they will only exacerbate a political trend already well underway. Workers in both the EU and the US are waking up to the price they have paid for cheap imports and now look to their governments to defend their economic interests.

Europe’s traditional left has long been in the thrall of the EU’s free trade liberalism, and must now weigh the damage imposed by this orthodoxy on their electoral prospects. 

Can Macron and Scholz use this moment to reclaim the working class for their parties?

Macron may have the dirigiste instincts of a (French) economic nationalist, but he still has the bearing of a Parisian elite, and has probably lost his chance to sway French workers.

Scholz simply does not possess the personal charisma needed to sell a programme of national industrial revival behind trade walls, especially one that risks Germany’s lucrative exports to China.

The coming conflict over imports of cheap Chinese EVs looms as a telling moment for both leaders. BYD is poised to flood Europe with cheap EVs, swamping German and French carmakers and thwarting their ability to produce EVs at a profit.

Yet Scholz will not defend the European car market if it prompts Chinese restrictions on Volkswagen’s sales in China.  Dire budgetary realities will deter Macron from taking a page out of President Biden’s playbook and proposing massive subsidies for EVs made in the EU. 

Any real help in the face of Chinese EV imports will need to come from the EU, which has the power to protect the Single Market with tariffs after a finding of dumping by Chinese manufacturers. 

But the new EU Parliament is unlikely to save the Renaissance or the SPD from their economic populists at home by urging the Commission to undertake a radical reformulation of Single Market trade policies. For all the hue and cry over the votes for the far Right, the new EU Parliament will remain dominated by the same “uniparty” of S&D and the EPP who together with the centrist Renew Europe will have 400 votes in the 720 seat chamber. 

As the preferred candidate of the dominant EPP, Ursula von der Leyen will likely return as Commission President and will continue her support for the Green New Deal, albeit with some tactical delays on particularly controversial policies. Stasis rather than reform will mark her second term. An EU Parliament unable to initiate legislation is unlikely to challenge her programme.

In addition to the lack of the powers enjoyed by legislative assemblies elsewhere, the EU Parliament suffers from the absence of directly elected legislators. In all but a few member states, voters select a party, who in turn sends their allocation of representatives to Strasbourg based on their individual rank in the party list. Which means that the average EU constituent does not vote directly for his representative, and often does not know how to register his concerns with one of his elected Parliamentarians.

Your average German farmer is not going to scrutinize the list of 96 German Parliamentarians for someone he hopes might take his concerns over the EU’s Green New Deal seriously. Tractor convoys are more effective.

Anyone who has endured a job with the US House of Representatives knows how responsive directly-elected Congressmen are. They are never more than two years away from an election that can end their careers, and tend to be highly sensitive to their constituents, who know exactly who they are.

Imagine if Germany were divided into 96 EU constituencies with parties fielding candidates in each. These Parliamentarians would arrive in Strasbourg (or more often Brussels) with a direct electoral mandate and constituents who expect them to deliver on their campaign promises.

Rather than the diffuse anger at ruling parties that motivated last weekend’s elections, voters would pick from specific electoral platforms and expect victorious candidates to push them at the European level.  Directly elected representatives would have greater standing to demand enhanced powers for the EU Parliament.

Unfortunately, the big beasts in the EU Parliament prefer things the way they are. Parliamentarians today are less concerned with their voters than their status in their party, which determines their positions on the party list and thus their chances of re-election. Leaders of the major party groupings do not want to broker complex compromises between dozens or hundreds of directly elected Parliamentarians, each with constituents at home to satisfy.

Far easier to keep power up at the party group level, nicely insulated from angry farmers and laid-off workers at home. Individual parliamentarians are not much more likely to embrace single-member constituencies. They now enjoy all the perks of life as an elected legislator, but few of the burdens of constituent service. A sweet deal, but one that beggars the democratic legitimacy of the assembly.  

Meaning Europe’s centre Left cannot expect the help of the EU in its struggle to reclaim its traditional voters. The SPD and Renaissance will remain torn between a demand for economic populism from their domestic constituents and an EU leadership still committed to free trade abroad and economically ruinous Green policies at home.

“More Europe” has been the slogan of the centre Left for decades now, but loyalty to the EU’s preferred policies has pitted centre Left parties against the interests of their traditional base.

While the “responsible” Right in the form of the CDU/CSU will likely reap the rewards of working-class support in next year’s Bundestag elections, France is increasingly likely to see a true economic populist in the form of Marine Le Pen as the next president. Le Pen will not only call for new tariff walls around the Single Market, but will seek to return many of the powers exercised by Brussels back to the member states.

The effective abandonment of the working class by the centre Left in France has opened the door for a ferocious economic nationalism likely to accelerate the decline of the global free trade regime and the emergence of regional trading blocs. After last week’s elections, no one on the traditional Left can say they weren’t warned.