Germany, Europe’s biggest economy, could well be the first major industrial power to fall in a global recession, triggering a Far Right victory that could have a domino effect across the EU.
On Monday 2 September, the Far Right party, Alternative für Deutschland (AfD) won its strongest ever result in regional elections in eastern Germany, coming in a close second behind the major parties in the ruling coalition. In Brandenburg, the party doubled its share of the vote and almost tripled it in Saxony.
Some have rejoiced that the AfD did not grow as much as polls had predicted, falling short of becoming the top party in Saxony, but this point of view is delusional. The party continues to grow from strength to strength on a nationalist platform of racist exclusion that has targeted Muslims, migrants and foreigners – and is now the second strongest political force in Germany’s state parliaments.
In the words of Ines Pohl, chief editor of Deutsche Welle, “These results have brutally demonstrated to political leaders that something is going awry in the country, and they must look and listen more closely to what drives voters into the arms of populists.”
Yet this is precisely what Merkel and her coalition have failed to do. According to German sociologist Oliver Nachtwey, the German economy is far from stable. Since 2000, Germany’s average growth rate has declined to a tepid 2% compared to the 1960s boom era of 5%. Neoliberalism has seen a third of workers experience increasing levels of insecurity, temporary contracts and reduced rights. Now a fifth of the workforce is employed in the low-wage sector, earning less than 60% of the median wage, very close to the official poverty line.
The result is that more workers than ever before are simply struggling to make ends meet. And as purchasing power has declined, Merkel’s policies of austerity – reducing budget deficits by slashing spending on public services and hiking taxes – have boosted unemployment and heightened the sense of downward mobility many workers are currently experiencing.
On Merkel’s watch, Germany has had two successive quarters of economic contraction, and industrial output has dropped more than 5%. The automotive sector, which accounts for over one in nine jobs in Germany, faces decimation from the combination of both Brexit and the escalating US-China trade war.
It is within the cracks of this system that the Far Right have been able to fester, pointing at the influx of refugees as a threat to jobs. This is in spite of data evidence which shows that Germany is experiencing a major labour shortage, which only migrants can solve without really undermining German jobs.
The AfD has leveraged these anxieties using powerful ‘us versus them’ messaging. They focus on the jobless. They focus on the “have-nots.” They focus on those left behind.
The state elections therefore mark a turning point. Germany, Europe’s biggest economy, could well be the first major industrial power to fall in a global recession, triggering a Far Right victory that could have a domino effect across the EU.
Yet Merkel’s response is telling. Her ruling coalition has doubled down on a campaign platform calling for better education, transport and other public services – the very services her own government has squeezed. As such, the tone deaf messaging is increasingly failing to resonate with voters.
As I warn in my forthcoming book, ‘The Broken Contract,’ trust in the political institutions of Western democracies is in free-fall precisely because electorates are realising that their traditional voting efforts have not produced meaningful changes in policy that improve their lives. This is driving them to ‘enforce’ accountability by turning to a dangerous new politics of extremism and demagoguery.
But the truth is that as alarming as these developments are, the path forward is fairly simple. Yet, it requires Merkel and political leaders across the EU to first acknowledge that the old ways of doing things have failed. Having acknowledged this, the core of the problem must be faced head-on: the insular, bureaucratic establishment structures of power are proving too brittle to respond to complex global challenges, and that is because they aren’t designed to.
We don’t need more austerity-driven privatisation. What EU leaders should focus on is a crash programme of internal reforms to introduce more efficiency, agility, transparency and accountability. Many such practices can be adapted from the private sector, where if you waste money or perform poorly, heads roll immediately. More broadly, EU institutions need to be more representative and participatory, directly engaging with and empowering citizens in internal accountability processes.
We cannot defeat the demagogues simply by demonising them. The Far Right will only be defeated when we realise that democracy is in a crisis of our own making, which we can solve by making our democracies truly fit for purpose.
- Dr. Saqib Qureshi is a senior business strategist and expert on democratic policy development who has advised governments in Canada, London, Washington DC and Dubai. His forthcoming book is The Broken Contract: Making Our Democracies Efficient, Representative, and Accountable.
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