The Consequences Of The Rise Of European Nationalism

Tyler Durden's picture

Nationalism, like any political idea, is a spectrum of views not an absolute. As UBS notes in an interesting article today, the policies of Golden Dawn are not the policies of the True Finns of Finland, or the Freedom Party of Austria. However, there is undoubtedly a trend within the Euro area in favour of those parties that promote nationalistic policies (perhaps defined as the aggressive pursuit of domestic or indigenous interests over regional interests) and this trend raises considerable questions over the future of the Euro. The first and most obvious consequence of a rise of nationalism within the Euro area is that it will make managing the Euro crisis ever more complex to resolve. The other issue that arises from the rise of nationalist parties in the Euro area takes us away from the specifics of the Euro integration. Nationalism very readily turns into prejudice against others. UBS' Paul Donovan adds that the Euro area will work best when it recognises and uses its economic resources (people in this instance) to the best advantage. Festering resentment and nationalism is unlikely to produce that sort of a climate. Given how important it is to restore competitiveness to the Euro area economy, this is not a negligible economic cost.

 

UBS - Paul Donovan: My country, right or wrong

The noise around Greek politics and indeed European politics in general is not likely to dissipate any time soon. Indeed, the cacophony seems only likely to increase. Investors who expected to spring from their beds on Monday morning to find a Greek government in place, stable, and willing to carry on with the Troika’s memorandum of understanding are sadly (if predictably) disappointed. Ahead lies a lot more politics, which financial markets are singularly ill equipped to factor in to asset prices, and which media and markets alike are more likely to be misled or misinformed about. Beneath the political noise about negotiating coalitions and renegotiating bail outs, there is a sub-current in Euro politics that markets might wish to examine.

Recent elections have brought with them an undercurrent of political nationalism. Golden Dawn in Greece captured almost 7% of the vote in the 17th June elections, having held onto their popular support levels from the earlier poll this year. One can readily argue that, from the other end of the spectrum, Syriza has also campaigned on a nationalist platform. In France, the Front Nationale has achieved national assembly representation for the first time in decades, and established itself as the third party of France with 14% of the popular vote in the assembly first round. The True Finns are already the third party of Finland, with over 19% of the vote in the last parliamentary election. Ireland’s Sinn Fein lies in second place in recent opinion polls. Nationalist or nationalist inclined parties have gained and retained support in the Euro area as the Euro crisis has developed.

Nationalism, like any political idea, is a spectrum of views not an absolute. The policies of Golden Dawn are not the policies of the True Finns of Finland, or the Freedom Party of Austria. However, there is undoubtedly a trend within the Euro area in favour of those parties that promote nationalistic policies (perhaps defined as the aggressive pursuit of domestic or indigenous interests over regional interests).

Why nationalism now?

The question of why nationalist parties are gaining electoral support is important, as it may help to understand the potential impact on more mainstream political thinking. It may also give some guidance as to the longevity of any nationalist movement. While nationalist parties have often had high profile, charismatic leaders it is clear that leadership alone is not the deciding factors. Many Euro area nationalist parties have maintained electoral support after the loss of their leaders.

There appear to be two common factors that characterise the supporters of Euro area nationalist parties. The first, and perhaps the least surprising, is that they tend to come from the economically insecure. This is not (necessarily) the same as the lowest income groups in society – though that is the case in some instances. Rather, it is more likely to be those in society who feel themselves as being most at risk in economic terms. That implies that they have something to lose (thus are not the lowest income groups) and that they feel threatened The global financial crisis, and the particularly protracted nature of the Euro financial crisis, has facilitated the growth of the economically insecure as a political class. It also helps to explain why nationalism is as prevalent (if not more prevalent) amongst the non-peripheral economies than it is amongst the periphery. The better off economies contain voters who fear for their existing prosperity, and who turn to nationalism as a defender of that prosperity.

The second common characteristic of the supporters of nationalist parties in the Euro area would appear to be hostility to immigration. This is often characterised as economic hostility, and very often the sentiment is expressed in terms of a country being “full” – which has economic overtones and feeds into the economic insecurity. However, cultural concerns also appear to have played a role in fostering Euro area nationalism, at least in the run up to the global financial crisis. Supporters of nationalist parties are fearful that their own culture is being “overrun” by immigrants, and unique national characteristics are being homogenised, or even replaced by alien cultures.

This cultural concern of course resonates particularly strongly in some parts of the Euro area where the national interests are viewed as being subordinated to Euro policy prescriptions. As the Euro crisis encourages further common policy approaches with occasionally painful economic side effects, this trend could very well continue.

Consequence 1: The Euro

The first and most obvious consequence of a rise of nationalism within the Euro area is that it will make managing the Euro crisis ever more complex to resolve. Weaker countries that need to receive assistance will resent the conditions imposed upon them from outside (and may seek to cast the domestic problems as being caused by foreign forces). This very much characterises the Greek attitude at the moment, but arguably is evident in some of the political comment in economies like Ireland.

At the same time, stronger economies that are called upon to provide economic aid for the common good are likely to resent the fact that their relative prosperity is being diverted from national uses – and that their economic outlook could potentially be made more insecure by association with the weaker economies. 

This unhappy combination then leads to resentment against the Euro or European institutions – despite the fact that the Euro’s crisis can ultimately only be resolved by choosing to “integrate, or die” (with the fragmentation of the latter option generating economic consequences that are likely to be very severe indeed). The resentment seems to be stronger amongst the weaker economies – the latest Pew Research Center survey on European attitudes reported that 83% of Greek’s believe that the power of European nations is a major threat to their economic welfare, and 70% that European integration has weakened their economy. This sentiment is seen elsewhere – 63% of the French thought integration had weakened their economy in the same poll.

The challenge is that if the Euro is to hold together (and we believe it will) these nationalist sentiments must be subsumed into a regional sentiment. Fiscal confederation should not be about “German money” going to “Greece”, or whatever combination1. Instead fiscal confederation should be about wealthier Euro citizens funding assistance to less wealthy Euro citizens. To get beyond the national boundaries implicit in the current national sentiment is essential to the eventual and necessary integration of the Euro area.

For the time being the presence of nationalism in the Euro area, and the impact it has on mainstream politics, is likely to lead to “red lines” in Euro area negotiations. There are some issues that negotiating governments will not be able to compromise over, in the current more nationally inclined environment. This applies to all sides of the negotiating table, stronger as well as weaker. Distinguishing between those points that are genuinely “red line” issues, and those that are simply bargaining positions to be surrendered for other concessions will be important to investors.

Consequence 2: Competitiveness

The other issue that arises from the rise of nationalist parties in the Euro area takes us away from the specifics of the Euro integration. Nationalism very readily turns into prejudice against others. Indeed the hostility to immigration that is a common characteristic of Euro area nationalism is something that arouses considerable concern amongst economists. Prejudice is something that is economically undermines competitiveness.

The issue here is that prejudice is irrational discrimination against a group in society (for whatever reason – but hostility on the grounds of nationality is one of the commoner forms). As such, it is economically inefficient. Economic efficiency is meritocratic, and has no room for irrational discrimination – effectively prejudice is a manifestation of Luddite behaviour in the twenty first century – rather than destroying physical capital, prejudicial behaviour wastes human (intellectual) capital.

 

There is a real risk that by fostering an environment where political nationalism develops, the ensuing prejudice will undermine competitiveness and productivity in the Euro economy. The Euro area will work best when it recognises and uses its economic resources (people in this instance) to the best advantage. Festering resentment and nationalism is unlikely to produce that sort of a climate. Given how important it is to restore competitiveness to the Euro area economy, this is not a negligible economic cost.

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Vampyroteuthis infernalis's picture

Europe if full of 20+ cultures that behave in different ways and speak different languages. They even look different. The United States of Europe is another flight of fantasy dream.

AldousHuxley's picture

in order for global elites to cement their status, they must mix the non-global elites to compete each other. classic union breaking tactic.

 

in mergers and acquisitions, only the acquiring top elites WIN....

 

acquired execs and employees are laid off and remaining are poured into the acquiring company's employee pool to increase competition for less wage.

 

 

 

 

 

LowProfile's picture

So unions are the solution to the forces of fascist globalism?

I think not.

AnAnonymous's picture

In US citizenism, the king class is the US citizen class.

You know, as I am reading some books at the moment, by coincidence, I noticed that troubles in a society seems to start when a middle class emerges.

It is funny. I've taken this with caution as the definition of middle class can be delicate in other societies than US citizen societies.

But the thought itself is funny, isnt it?

TheFourthStooge-ing's picture

.

But the thought itself is funny, isnt it?

Most of your thoughts are worth a good laugh.

AnAnonymous's picture

Maybe because they come from the observation of US citizenism?

TheFourthStooge-ing's picture

.

Maybe because they come from the observation of US citizenism?

No, I think it's because your form of insanity is amusing.

AnAnonymous's picture

Free Tibet!Free Taiwan! Free the US of A!

N. B. Forrest's picture

Free the states from the Federal Autocrats. 

Ar-Pharazôn's picture

that's true now..... but in the past they got rich riding the nationalism wave.....

Waffen's picture

Indeed, as a Texan I want no part and have no interest in New York or
DC's wars, banking, interest and laws.

Balkanize this Bitch!

Or alternatively return to the Articles of confederation.

Lednbrass's picture

Quite so, I am not in Texas but would like to be allowed to vote on this.  A large portion of the US would do just fine under that system.

 

Dr. Engali's picture

Balkanization of the U.S. is inevitable. You can't have one central authority trying to cram one identity and one philosophy down our throats. I for one look forward to that day.

Mercury's picture

Quite the opposite.

You can't have one central authority trying to cram multi-culturalism down your throats. 

A mutually agreed upon set of shared values (see: e pluribus unum) with explicitly defined individual civil liberties and limits on state powers, yes. That works.

But that ship has sailed.

AldousHuxley's picture

balkanization only happens under foreign invasion around border states, but even then, the original power nation-state  in an empire remains in tact......

Iran = Mesopotamia

Iraq = Persian Empire

Turkey = Ottoman Empire

Germany = Prussian Empire

USA = American Empire

 

US has geographically advantageous coasts on each side.

 

only balkanization US is going to have is over some stupid shit like civil war over disagreement on MTV video music award winner.

Dr. Engali's picture

You don't think there Isn't a foreign invasion around the border states now? Call it immigration , illegal immigration, call it the world's slowest invasion, whatever you want. The bottom line is the make up of the country is changing at a rapid pace. Balkanization will be the outcome... Book it.

AldousHuxley's picture

of course,

 

Mexicans are doing what Americans did prior to the Mexican Cession of Texas......they flooded the border (back then Texas belonged to Mexico), with American whites, so that when it was time for war, royal soldiers are already behind the enemy lines.

 

but the interesting thing is,

 

illegal aliens could have been born "americans" if US had annexed Mexico when they were occupying MExico City during Mexican-American war.

 

Imagine US having Mexico as 51st state.....

Waffen's picture

"Mexicans are doing what Americans did prior to the Mexican Cession of Texas"

No they arent. Americans were invited into Texas and given land grants because the Indians were such a problem in the area and the area wasnt populated by very many "mexicans"

dumbengineer's picture

Yes they are. Mexicans are invited into Texas and Cali to pick-up  fruits, mow the lawn and clean-up the pool. Because hard-work is such a problem and those area are not populated by very many 'hardworkers'

Dr. Engali's picture

To me it matters little. Borders ebb and flow over time. Anybody who believes things can remain static is a simpleton. One thing I know for sure is all this will come to a head very soon and the empire with no money will be no more. My guess is the invasion of Iran is the catalyst that will break the empire.

N. B. Forrest's picture

I hope you're right, however, never underestimate the ability of bureaucrats and statist politicians to hold the empire together, long after it should have been split apart. 

Waffen's picture

You forgot the USSR. (not invaded)

The USA is only a unified country because the south was forced back in.

When our country goes broke, I pray that the states will look to themselves and not the fed that created the mess to begin with.

We may watch the same shows and speak the same language, but culturally we are not all the same and our interests under stress will be very different.

AldousHuxley's picture

our country is broke, but like during civil war, military is what unites the empire.

 

US military is so strong that allows banksters to be careless. they can always make it up by stealing oil from somewhere else. however, like a huge hedge fund who can't unload toxic shares due to lack of buyers, US empire is so big that it is running out of countries to colonize.

ThirdWorldDude's picture

Not quite right! Your logic on balkanization of empires works only on a few of your selected cases. In the case of USSR and The Ottomans, the states collapsed from inside due to false policies and economic unsustainability. The military is the last instance to collapse, because dying empires are a parasite with a terminal illness - unable to fix the internal problems, they cling to brute force and extracting resources from the outside. History also shows that the military power is last to go, usually as a result of the empire destroying it's own currency.

Read Toynbee or Spengler for a better grasp on the subject.

AnAnonymous's picture

the states collapsed from inside due to false policies and economic unsustainability.

_________________

Or maybe the other empires were stuffing the resources from the exterior faster than USSR and Ottoman empires. Attrition.

Ummmm, rings somehow a bell here.

TheFourthStooge-ing's picture

.

Ummmm, rings somehow a bell here.

Auditory hallucinations, a symptom of schizophrenia.

AnAnonymous's picture

So that is the new fantasy.

Contrary to facts, both fantasy and propaganda wear out. From time to time, new versions have to emerge.

akak's picture

 

Contrary to facts, both fantasy and propaganda wear out. From time to time, new versions have to emerge.

Hence your bigoted and nonsensical fantasy of
"US Citizenism".

N. B. Forrest's picture

The "military" is not a homogenious machine.  The military is full of a few million people many of whom think for themselves.  Plus, the "military" just might become a loose cannon when there's not money to pay them. 

Bobbyrib's picture

Even if the moron who started the wars career started in your state?

Waffen's picture

George bush is not Texan, the guy is a new England liberal skull and bonesmen.

Tourist2008's picture

I dont agree. I have been in every European country except Moldova and Lichtenstein and we behave the same and largely look the same (can you tell a cambodian from a vietnamese?). If you sit in a restaurant in the tourist district of brussels you have no idea where someone is from unless you hear them speak.

In my view, a United States of Europe is indeed very challenging to achieve ....but worth to try.

Tirpitz's picture

Seems you didn't really get a chance to compare the attitude to work quality of let's say a Swiss citizen to a Yugoslavian. Nor might you have noticed a difference in driving style between a Finnish and an Italian car driver. Nor the typical German penchant for order and obedience, which is about the opposite of the Greek laissez-faire chaos. What again were the similarities between la vie francaise and the goals of a Russian citizen?

FeralSerf's picture

Yugoslavian -- actually there is no united slavic people anymore -- so say, e.g. Serbian or Slovenian working in a Swiss factory will after a proper amount of training from his Swiss superiors will be working to Swiss quality.  BMW has many non-Germans building their cars too.

Finns and Italians are culturally different.  So are northern and southern Californians for that matter (not as much i admit).  I have no problem driving in either Finland or Italy.  Both are better drivers than most Americans.

The average Greek works much harder than he/she is alleged.  Crime at the top in Greece is common.  There's a reason that Goldman Sachs found fertile ground in Greece to plant their (allegorical) opium poppies.  Goldman is just as guilty as the Greek politicians in their grand theft scheme.  Those debts for that stolen money should not be paid.

Western's picture

He was obviously referring to the work ethic of someone of Serb/Bosnian/Croatian ethnicity working somewhere in Yugoslavia, with a Swiss-born citizen working somewhere in Switzerland. Please update us with a new comparison now...

ThirdWorldDude's picture

Does that make every American a drunken fat white trash who spends the days shopping in Walmart?

Fail, chimney pot! Every generalization is wrong.

tobus's picture

The exception does not disprove the rule. Every trend will have outliers, but that doesn't mean that you should ignore the trend completely.

Yes there are similarities and that's great, but it doesn't mean that all nations should be forced to operate in the same way. That kind of monoculture is consistently catastrophic in nature and it is proving to be catastrophic for us having adopted a global financial monoculture.

People like the guy in the article who have seen this monoculture cause real hardship and who's only solution is "more monoculture!" are positively dangerous, not to mention stupid.

Western's picture

twd you're pretty fucking stupid

dumbengineer's picture

FYI : most high-quality German and Swiss work is now outsourced in former Eastern-block countries (e.g. serbian).

As for driving style, if you were refering to Finnish-style as 'safe' and Italian as 'unsafe', you are mostly wrong. Finland has much crazy driving too, including kids doing ice driving contest in the wild.

LetThemEatRand's picture

This article leaves out another reason for the rise in nationalism -- the realization that multi-national companies, bankers and other oligarchs are raping their societies and enslaving the populations.

reTARD's picture

Remember the National Socialist Party from Germany...

Conrad Murray's picture

The NAZI party was socialist? I thought they were facsist and that made any comparisons to the administration and ideology of Barry Soetoro (or Barack O'Romney) immature and irrelevant.

You're not saying Statists are one and the same in the the grand scheme of things are you?

Vampyroteuthis infernalis's picture

Communists and Nazis are evil, ugly step-sisters. Not much difference.

Waffen's picture

Granted, although both were authoritarian, their interests were very different.
Nazism was highly nationalistic and volk "folk" centered, supports the family etc.

Communism basically is destruction of everything but the state. Basically the state is your family.

Very different, but yes both are authoritarian and thus enemies of liberty. If given the choice however communism is by far the most evil anti human state institution there is.

Conrad Murray's picture

Volkswagen...vehicle of choice for the douchebag commie hipsters.

Apple...Authoritarian manufacturer of choice for the douchebag commie hipsters.

I don't have my black rimmed hipster glasses on, but, if I'm reading this right, I must disagree that their is a choice between Nazism and Communism. Either, one if for individual liberty, or communal serfdom; there is no middle ground.

Live free or die trying.

Waffen's picture

Just stating how one leaves room for family and culture while the other takes everything from you. Both are evil but communism is the greater of the two, IMO.

Peter K's picture

What also needs to be mentioned here is that the National Socialists went on their killing sprees as a result of the war going badly, but not because they couldn't feed themselves. Whereas the Communists went on there killing sprees because they couldn't feed themselves and needed to find a scapegoat. And they have been doing it to this day.

N. B. Forrest's picture

Communists went on killing sprees just because they could.  10 million dead Ukranians, just because Stalin could kill 10 million Ukranians.