Far-right concerns could harm Austria’s coalition

Subject Austrian intra-government relations. Significance Austria’s ruling coalition enjoys strong and stable support for its stance on immigration and tax reduction and its support for greater member-state autonomy within the EU. However, controversial immigration proposals from the Austrian Freedom Party (FPOe), the far-right junior partner in the coalition, have provoked a backlash from Chancellor Sebastian Kurz’s Austrian People’s Party (OeVP). He is now under pressure to crack down on some FPOe officials because of apparent indirect links to the Christchurch mosque killer. Impacts Austria’s relationship with Israel will remain uneasy, as Israel associates the FPOe with anti-Semitism. Austria is highly unlikely to join the UN migration pact while the FPOe is in government. Foreign intelligence agencies will be reluctant to share information with Austria as the FPOe controls the defence and interior ministries.

Subject The stability of Estonia's new coalition. Significance The new government took unprecedented criticism even before taking office, largely because of the inclusion of the far-right Estonian Conservative People’s Party (EKRE). However, Prime Minister Juri Ratas has proved a model of restraint in his own statements and EKRE's presence is balanced by his Centre party's positioning as the anti-nationalist party -- most of Estonia’s Russian-speakers vote for it. Impacts With government economic policy still unknown, weakening external demand is likely to slow GDP growth to around 2.5% in 2019-20. The new government will not block the Commission-funded Rail Baltica high-speed rail link joining the Baltic states with Poland. It has reaffirmed Estonia’s commitment to the EU and NATO, and the 2% of GDP allotted to defence.


Significance Government formation should have been relatively straightforward but a series of political controversies have damaged VVD leader and Dutch Prime Minister Mark Rutte’s credibility with the CU and some opposition parties. Impacts The collective rise of the far-right vote means the far right will continue to worry centrist parties and thus influence government policy. Investment in nuclear energy to meet climate targets is unlikely to be a priority for the new government. Dutch influence in the EU could grow with the departure of Merkel in September, and Macron’s focus on the 2022 election.


Significance The Central Electoral Commission has registered incumbent President Nursultan Nazarbayev as the candidate of the ruling NurOtan party. His candidacy is supported by two others, Ak Zhol and the Party of Patriots. The two other officially registered candidates are Turgun Syzdykov of the Communist People's Party of Kazakhstan, and the head of the Trade Union Federation, Abelgazi Kussainov (independent). The main unofficial reason for holding the election early is that Astana is worried about the economy and also needs to secure a stable political base in order to ward off any Russian adventurism in northern Kazakhstan. Impacts Nazarbayev's victory will further delay the succession, compounding long-term uncertainty about stability after his death. Nazarbayev will look to maintain close ties with Russia, but China and the EU will be his main economic partners. Following re-election, Nazarbayev will focus on economic issues and look to continue cutting spending.


Subject ISG infiltration of refugee flows. Significance Refugee arrivals in Europe in 2016, large if not at 2015 levels, will put yet more pressure on the EU, which is already struggling to address economic crises, political polarisation and inter-state divisions on how to address security crises in Ukraine and the Middle East. Suspicions have grown that among the refugees are operatives of the Islamic State group (ISG). Impacts ISG's foreign fighters in Iraq and Syria will seek to expand their relationships with existing extremist networks in Europe. Speculation over ISG's presence within refugee flows will continue, especially as far-right parties continue to perform well in elections. The EU-Turkey deal may slow refugee flows, but the existing numbers of refugees will continue to attract suspicion from authorities.


Subject Political and economic consequences of austerity in the Netherlands. Significance The popularity of the Dutch governing parties has declined steadily since they came into power in 2012. The absolute winner in the polls continues to be the far-right Freedom Party (PVV) led by Geert Wilders. There are signs, however, that mainstream parties are coming back into favour, thanks to a combination of promising economic prospects and relatively stable immigration levels. Impacts The EU, healthcare provision, integration and care of the elderly are likely to be key themes during the election campaign. Calls for a referendum on the withdrawal of the Netherlands from the EU -- a 'Nexit' -- are likely to intensify. Prospects for the Labour Party in the next election will depend on whom the party elects as its leader.


Subject EU-North Africa migration deals. Significance Large-scale migration movements from Sub-Saharan Africa, Turkey, and the Middle East and North Africa (MENA) region have challenged European governments in recent years, including stoking support for far-right/populist parties such as the French Front National, the Alternative for Germany, and the Austrian and Dutch freedom parties. Impacts EU member states’ ability to control the EU’s external borders is central to seeing off populist parties and restoring support for the EU. If Europeans believe their governments cannot control immigration, support for the extreme right will again increase. Were the far-right to come to power on the continent, the EU -- and its single market -- could be imperilled. However, high migration is unlikely to reorder EU politics to the benefit of the extreme right in the medium term.


Subject Proposed reform of the EU comitology procedure. Significance The little-known ‘comitology’ procedure plays a key role in EU regulation. In recent years, this process has been breaking down as member-state expert representatives in comitology committees often abstain from voting, forcing the European Commission to take controversial decisions on its own (and accept any blame for them). In response, the Commission has proposed reforms that would pressure member states to take a position on (and hence political ownership of) controversial regulatory decisions. Impacts Government representatives, interest-group representatives and corporate lobbyists will be most affected by comitology reform. Despite adding transparency and avoiding blame-shifting to Brussels, the reforms would probably not help the EU’s image with citizens. The European Parliament might demand -- as part of any final reform package -- an increase in its involvement in the comitology process.


Significance This does not mean reimposing pre-Schengen border controls, Dijkhoff said. However, last September, mobile patrols initiated random checks for smugglers and those ineligible for asylum. Amid increasing pressure to close its borders to control the entry of refugees, the Netherlands is meanwhile the only EU member state to hold a referendum on Ukraine's Association Agreement (AA). This springs from public discontent about what some consider further 'expansion' of Europe. Impacts A major rise in Ukrainian workers entering the Netherlands is unlikely post-ratification because employment permits would still be required. The AA would benefit Dutch investors, in the agri-food, horticulture, energy, logistics, water, hi-tech and retail industries in particular. Rejecting the AA could play into the hands of the Kremlin, by driving a wedge between Ukraine and the EU.


Subject Italy's government relations. Significance Italy’s coalition partners agreed on January 10 to take in a dozen stranded migrants from the Sea Watch 3 NGO ship in Malta after the two parties initially took divergent stands on the issue. Migration has been a source of growing division between the anti-immigrant League party and the anti-establishment Five Star Movement (M5S), among other issues such as the environment and tax. However, in the short-term, staying in government is in the interest of both parties. Impacts Government stability should see bond yield spreads between Italy and Germany stabilise. Longer-term structural reforms are likely to go unaddressed as the coalition partners turn their focus to European elections. The EU could be forced to accommodate Italy’s migration policy, particularly with respect to the redistribution of migrants.


Subject Spain's far-right party. Significance In Spain, the two mainstream centre-right parties see the far-right Vox party as an opportunity rather than a hindrance. The People’s Party (PP) and Ciudadanos co-rule the regional government in Andalusia, with support from Vox. If this governing arrangement proves stable and effective, it could represent the launchpad for Spain’s three right-wing parties to form the next national government. Impacts The consensus among centre-right parties over tax cuts suggests that these will be a central policy outcome of their collaboration. The prospect of continuous political instability will discourage investment in Spain. A right-wing government will see a deterioration in relations between Spain and Catalonia.


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