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Can Australia avoid Europe’s populist fate?

By Gabriele Gratton & Richard Holden  April 09, 2018

A populist pall has been cast over European democracies, and there are reasons to be concerned that Australia is not immune from a similar fate.

In the latest instalment of this European tragedy, Italians went to the polls on March 4 and sent a strong signal to the European political system.

Almost one-fifth voted for the Northern League party of Matteo Salvini, a man who, referring to the recent refugee crisis, said that Italy needs "a mass cleaning – home by home, street by street, neighbourhood by neighbourhood".

His post-fascist allies of Brothers of Italy (a reference to the Italian national anthem) garnered 4.4% of votes.

Even more shockingly, fully one-third of the Italians' votes went to the 5 Stars Movement, a party founded by stand-up comedian Beppe Grillo and tech consulting company founder Gianroberto Casaleggio, which based its consensus on initiatives such as the Vaffa Day, where "vaffa" refers to the most well-known of Italians' many vulgar insults.

In total, more than 18 million voters, out of less than 33 million, voted for parties that openly reject the EU, the Italian transatlantic ties with Western democracies, or even Italy's long-standing democratic traditions. Or all of the above.

Italy's political crisis is not a surprise. Its economy has stagnated for almost 25 years. Hit hard by the global financial crisis, it has yet to fully recover. Youth unemployment skyrocketed to almost 45% during the crisis and has barely recovered, standing at 33%.

With the mining boom over, Australia is no longer immune from the tectonic economic forces that have shattered European democracy

The Democratic Party (a labour alliance of progressive Catholics and social-democrats) in government since 2013 failed to strike a significant deal with the EU and asked the Italian voters to patiently wait for its economic reforms to kick in.

Its leader Matteo Renzi, once the new face of the Italian left, was humiliated when attempting to change the constitution in a referendum in 2016. Now broadly seen as the establishment of old politics, the Democratic Party's campaign was finally tainted by its attempt to pass a compassionate law giving citizenship to Italy's immigrants' sons wholly grown and educated in the country.

Voters exasperated by unemployment and corruption, in the country most heavily hit by the Mediterranean refugee crisis, responded with a resounding "Ciao". Renzi and his party plummeted from 40% in the 2014 European elections to less than 20%. Immigrants' sons remain without political rights.

The Italian election result is not an outlier. Last year one-third of French voters supported the xenophobe Marine Le Pen and her National Front.

A few months later, Alternative for Germany, a right-wing populist to far-right party which never had a seat in the federal parliament before, became the third German party, almost doubling its vote tally to 7.9%. And then there are the two biggies: Brexit and Trump.

Populism in Europe has many roots: xenophobia, islamophobia, the Kafkaesque bureaucracy of the EU and its states, to cite a few. The generation that witnessed the brutality of fascism and dictatorship has passed, leaving their grandchildren with little or no memory of that era. But the leading cause seems clear: globalisation.

In the UK, a close look at how people voted shows that UKIP and Brexit were most successful not where immigration was higher, but where jobs were hit harder by Chinese imports.

Similarly, support for populist parties across Europe is driven by economic insecurity. Even in Italy, a first look at the data suggests that the 5 Stars Movement was most successful in the poorest regions of the country, and where voters were less educated and more likely to be unemployed.

The rise of populism in Europe is accompanied by the disappearance of its traditional social-democratic parties. From Italy to Germany and France, the traditional leftist parties were hit hard by voters' dissatisfaction in the past two years.

In the UK, the Labour Party is now led by its hard-left fringe and its lunatic leader, Jeremy Corbyn. There seems to be no space anymore for the economically liberal, socially progressive left of Tony Blair and Bill Clinton of the 1990s.

Nor Bob Hawke and Paul Keating – pioneers of the third way – for that matter.

With the mining boom over, Australia is no longer immune from the tectonic economic forces that have shattered European democracy.

We, too, have stagnant wages for average workers. Our young people feel there is little chance of ever owning their own home. The robot revolution seems certain to destroy many of the jobs of today, while nobody knows what the jobs of the future will be.

Major parties in the lower house have begun to take a populist turn on trade, taxes, and retirement incomes. And Keating's description of the Senate as "unrepresentative swill" now sounds like a generous tribute. One Nation's nasty nationalist rhetoric resonates with many disaffected voters.

Australia is not Europe. Yet. But we face the same economic forces that have led to Europe's present, desperate, position. And where the European left failed – by not redistributing the gains from globalisation and promoting the youth's future by investing in more and better education – our nation's politicians have done little better.

We need politicians who can respond to those actual forces and address the root causes, rather than exploit populist desperation for their own political gain.

The real question for Australian voters is who those politicians are.

Gabriele Gratton is a senior lecturer, and Richard Holden a professor, in the school of economics at UNSW Business School.

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