Tag Archives: social democratic party

Sweden

Swedish far-right could inadvertently deliver 3rd term to Reinfeldt

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reinfeldt

When Swedes finish voting on Sunday in general election, they might find that, to their astonishment, the only party with the seats to deliver a majority coalition is the one that both the right and left have treated as politically radioactive for years.Sweden

In the final days of the campaign, the race has tightened between the four-party center-right alliance headed by two-term prime minister Frederik Reinfeldt (pictured above) and the loose confederation of social democrats, greens and socialists that would rally behind Stefan Löfven, the former labor union leader who now heads Sweden’s center-left Sveriges socialdemokratiska arbetareparti (Swedish Social Democratic Party), which essentially created the Swedish social welfare state in the 20th century.

If the results are close, it could leave the balance of power in the hands of the far-right, anti-immigrant Sverigedemokraterna (SD, Sweden Democrats), even though the party entered the final week of the campaign crippled after news reports revealed racist online commentary of several of the party’s candidates.

Though Löfven’s Social Democrats (and the left, generally) have held a polling lead for much of the the past year, a September 1-4 Sifo poll from showed the left’s generic lead falling to less than 4.9%. A more recent September 8-9 Sifo survey showed the left recovering a greater margin of 7.8%. But up to one-third of the Swedish electorate may still be undecided going into the election on Sunday, making predictions difficult.

Despite Löfven’s lead, many voters approve of Reinfeldt’s performance over the past eight years, most especially as his record relates to the Swedish economy. Sweden has emerged from both the 2008-09 global financial crisis and the 2010-12 eurozone crisis with stronger economic growth than much of the rest of the European Union. While unemployment is still probably too high at around 8%, the rate is slowly declining. But Swedes don’t dislike Reinfeldt. It’s that that Swedes are ready for a change, and Löfven’s moderate social democratic approach would bring more continuity than rupture.

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RELATED: One month out, Löfven and Social Democrats lead in Sweden

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Though the two Sifo polls this month showed support for the Sweden Democrats dropping from 10.4% to 8.9%, even a ‘poor’ showing would eclipse their previous high point in the 2010 election, when they won 5.7% of the vote. The 2010 breakthrough was a watershed moment for Sweden’s far right — much to the dismay of the rest of the political spectrum. Suddenly, a far-right party that had never held any seats in the Riksdag, Sweden’s parliament, now held 20.

So even if the Sweden Democrats under-perform in the 2014 election (they won around 9.7% in the May European elections), they could still hold a large enough bloc of seats to deny either the Reinfeldt-led right or the Löfven-led left a majority.

Though the current center-right government has only a minority in the Riksdag, it has often unofficially leaned on the Sweden Democrats for support, though it’s also turned to the Miljöpartiet (Green Party) as necessary on issues like refugees and asylum.

Continue reading Swedish far-right could inadvertently deliver 3rd term to Reinfeldt →

Brandenburg, Germany, Saxony, Thuringia

Left hopes to make eastern breakthrough in German state elections

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bodo

Bodo Ramelow (pictured above) isn’t a Stasi throwback intent on socializing Thuringia into a communist hellhole.Germany Flag Icon

Instead, he’s a rather boring Lutheran born in West Germany, but he could also become the minister-president of the former East German state after state elections on September 14, which could give Die Linke (Left Party) control of its only state in Germany. Thuringia is just one of three eastern states voting throughout the next month, joining Brandenburg on September 14 and Saxony two weeks earlier on August 31.

The Left Party, in particular, has a strong following in the former East Germany, given its roots as the former Partei des Demokratischen Sozialismus (Party of Democratic Socialism), the successor to the Socialist Unity Party that ruled the eastern German Democratic Republic during the Cold War. As such, the traditional Western parties have been wary of partnering with the Left Party.

That’s beginning to change as the German left increasingly considers a more unified approach, and eastern Germany has been a laboratory for so-called ‘red-red coalitions’ between the Left and the center-left Sozialdemokratische Partei Deutschlands (SPD, Social Democratic Party). As such, the Left Party served as the junior partner in Berlin’s government for a decade between 2001 and 2011 and in the state government of Mecklenburg-Vorpommern between 1998 and 2006. Furthermore, a red-red coalition currently governs Brandenburg, and its leaders hope to renew a second term for the government in September’s election.

Though the outcomes aren’t roughly in doubt, the elections take place under the backdrop of news that the eurozone could be sinking back into economic contraction. Initial numbers from the second quarter of the year showed the economy contracting by 0.2% — the first contraction since 2012 — after first-quarter growth was revised down from 0.8% to 0.7%.

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RELATED: Has the first Ossi chancellor been
good or bad for the former East Germany?

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That’s in addition to the income gap that still plagues eastern Germany, where economic growth lags significantly behind the states of former West Germany, nearly a quarter-century after reunification:

Primary_income_of_private_households,_in_purchasing_power_consumption_standard_(PPCS),_by_NUTS_2_regions,_2011_(1)_(PPCS_per_inhabitant)_RYB14

The east’s lagging economic growth, the strength of Die Linke, and  growing unity between the SPD and Die Linke are common themes in all three state elections over the next month.

Saxony: August 31

saxony

Saxony is the most populous of the three eastern states voting over the next month, making it the biggest prize. But it’s also where the governing Christlich Demokratische Union Deutschlands (CDU, Christian Democratic Union) of chancellor Angela Merkel are most assured of winning reelection. Continue reading Left hopes to make eastern breakthrough in German state elections →

Sweden

One month out, Löfven and Social Democrats lead in Sweden

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Löfven

Voters go to the polls in Scandinavia’s largest country on September 14, and if he can hold onto the lead that his party has enjoyed for over a year, former labor leader Stefan Löfven (pictured above) will become Sweden’s next prime minister. Sweden

That’s slightly surprising because most Swedes don’t necessarily give center-right prime minister Frederik Reinfeldt poor marks. In two terms, Reinfeldt has earned praise, domestically and abroad, for his government’s economic stewardship, bringing Sweden out of the 2008-09 financial crisis with some of the strongest growth in the European Union. In that time, Reinfeldt has reduced the size of Sweden’s public sector, while nevertheless retaining the character of his country’s renowned social welfare state.

Reinfeldt’s governments amassed an impressive series of legislative accomplishments over the past eight years. Under his watch, Sweden privatized several public interests, including the maker of Absolut vodka, and otherwise deregulated the pharmaceutical, telecommunications and energy industries. Reinfeldt introduced the  earned income tax credit to reduce taxes on the poorest Swedes while instituting a series of tax cuts, including the abolition of the wealth tax in 2007 and a reduction in the VAT rate on restaurants from 25% to 12%. His government also passed a law to permit same-sex marriage in 2009 with wide support from the opposition.

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In his government’s second term, Reinfeldt avoided the recession that otherwise afflicted much of the rest of the eurozone. Though Reinfeldt and his finance minister, Anders Borg (pictured above, right, with Reinfeldt, left), have resorted to deficit spending to boost Sweden’s economy, their budget deficits haven’t fallen much below 1% of GDP. That’s a much better fiscal record than the average eurozone member, and it’s kept Swedish public debt at the relatively low level of around 40% of Swedish GDP.

It’s arguable that by reforming, privatizing or abolishing the least efficient areas of the Swedish public sector, Reinfeldt’s governments updated for the 21st century the existing welfare state that the long-dominant Sveriges socialdemokratiska arbetareparti (Swedish Social Democratic Party) built in the 20th century. Continue reading One month out, Löfven and Social Democrats lead in Sweden →

Estonia

Who is Taavi Rõivas? A look at Estonia’s likely new prime minister

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taavi

Last week, when Estonia’s nine-year prime minister Andrus Ansip stepped down, virtually everyone thought that Estonia’s European commissioner Siim Kallas (himself, briefly, a former prime minister) would step into Ansip’s shoes as the Eesti Reformierakond (Estonian Reform Party) prepares to put itself on a stronger footing for expected March 2015 elections.estonia

After all, Kallas helped found the Reform Party in the mid-1990s, served as a highly regarded president of Estonia’s central bank in the early 1990s, and held several posts in government before leaving for Brussels in 2004, where he’s amassed plenty of additional experience — as a vice president of the European Commission since 2010.

Instead, Kallas faced renewed controversy over $100 million in loan guarantees that he signed while central bank governor in 1994.  Moreover, the concept that Kallas could wage a shadow campaign for prime minister while still officially a member of the European Commission ruffled feathers in both Tallinn and Brussels — even more so in light of open rumors that Kallas and Ansip would simply trade jobs, with Ansip stepping into Kallas’s shoes at the Commission.

Kallas formally ruled out a return as prime minister on Wednesday, and the Reform party nominated instead Taavi Rõivas (pictured above), social affairs minister since just December 2012.  At age 34, he would be the youngest head of government in Europe, and notably, the first Estonian leader who was just a child when the Soviet Union collapsed — Estonia won its independence just five days short of Rõivas’s 12th birthday. Continue reading Who is Taavi Rõivas? A look at Estonia’s likely new prime minister →

Estonia

Considering Andrus Ansip’s legacy in Estonia

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ansi

Earlier this week, Estonia’s prime minister Andrus Ansip stepped down after nine years leading the tiny Baltic country of just 1.3 million.estonia

His departure brings even more change to the Baltic states — Laimdota Straujuma became Latvia’s new prime minister in January following the resignation of Valdis Dombrovskis over the collapse of a supermarket roof near Riga, the Latvian capital, that killed 54 people.

Ansip and Dombrovskis share a lot in common, both in terms of politics and the policy trajectories of their governments.

Like Ansip, Dombrovskis stepped down having presided over difficult economic reforms that stabilized their country’s respective credit ratings and credibility with global debt markets and that helped unleash economic growth after the immediate downturn of the global economic crisis and the European debt crisis.  Both prime ministers, uncharacteristically, won reelection in the middle of implementing some fairly hefty budget cuts (enough to lower Estonian public debt to just 5.7% of GDP as of 2012) — Ansip most recently in the March 2011 elections, when Reform actually gained two seats (for a total of 33) in the 101-member Riigikogu, the Estonian parliament.

Ansip ushered his country into the eurozone in 2011, the first of the Baltic states to do so, and Dombrovskis’s government followed, with Latvia acceding to the eurozone on January 1 of this year.

Just as Latvia’s governing center-right Vienotība (Unity) faces a difficult election in October later this year, Ansip’s own center-right Eesti Reformierakond (Estonian Reform Party) faces a similarly difficult challenge in elections expected to take place in March 2015.  Continue reading Considering Andrus Ansip’s legacy in Estonia →

Switzerland

Swiss immigration vote threatens access to EU single market

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2007SVPAn infamous campaign poster from the 2007 Swiss election that depicts a flock of white sheep inside Switzerland, with one kicking a black sheep outside — the implication being that the right-wing Swiss People’s Party (SVP, Schweizerische Volkspartei in German; UDC, Union démocratique du centre in French) would tighten immigration policies to keep out migrants and perhaps reverse the trend of greater immigration to Switzerland in recent years.  Critics pointed out the nastier racist undertones of the poster.swiss

It’s that advertisement that I had in mind today as Swiss voters elected by a narrow 50.3%-to-49.7% margin to adopt an initiative ‘against mass immigration’ that would introduce quotas to Swiss immigration, despite the wishes of the Swiss government and Swiss business interests and the warnings of top EU officials.  The result threatens the existing treaties between Switzerland and the European Union that guarantee the free movement of persons, one of the four ‘core’ EU freedoms.

It’s a significant victory for the SVP, which has emerged as a major force in Swiss politics through its forceful advocacy of a nationalist, conservative agenda to restrict immigration and oppose greater EU integration.

The result means that the Swiss government now has three years either to renegotiate or revoke the bilateral agreement finalized in 2002 with the European Union over free movement of persons.  That treaty is part of a larger package that provided Switzerland access to the EU single market in exchange for enacting certain aspects of EU policy, and it’s part of a wider process that has more closely integrated Switzerland with the European Union over the past decade.  The country’s historic independence means that it’s never seriously pursued EU membership — Switzerland joined the United Nations only in 2002, after all.   Continue reading Swiss immigration vote threatens access to EU single market →

Croatia

Was it a mistake for the European Union to admit Croatia earlier this year?

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CROATIA-GAY-RIGHTS-RELIGION-REFERENDUM

It hasn’t been an incredibly distinguished first six months for the European Union’s 28th member.croatia

Croatia, which entered the European Union on July 1, is only the second state to do so from the former Yugoslav union, but it’s already proving to be somewhat of a problem child — as some Europeans feared openly before its accession.

Most of those fears relate to economics and, given the eurozone’s economic crisis over the past four years, you might have thought that Croatia’s growing pains would be economic in nature, but that’s not the case.

Instead, Croatia’s difficulties have more to do with social issues and historical legacies — in its first six months of EU membership, Croatia caused a showdown almost immediately with EU leaders over the potential extradition of Josip Perković, the former Yugoslav-era director of Croatia’s secret police, and it signaled to the world its relative intolerance for LGBT freedom by conducting a referendum that resulted in a constitutional amendment banning same-sex marriage at a time when much of Europe is embracing equal marriage rights for LGBT individuals.

Those experiences could shape future EU appetite for further expansion in the Balkans, at a time when the European Union has deftly dangled the carrot of EU membership in exchange for a more permanent peace between Serbia and Kosovo, and at a time when EU membership might be the only thing that can save the triple-fractured union of Bosnia and Herzegovina, while also integrating smaller countries like Macedonia and Montenegro into the global economy.

The most serious rupture began three days before Croatia even joined the European Union when it passed the ‘Perković law,’ which purported to prevent the extradition of anyone for crimes committed before August 2002.  That caused an almost immediate backlash against Croatia from EU leaders and the other 27 EU member-states, and by September — less than 90 days after Croatia had joined the European Union — EU justice commissioner Viviane Reding, was threatening economic sanctions.  Germany, in particular, is interesting in extraditing Perković in relation to his role in the assassination of Croatian defector Stjepan Đureković, who was killed in 1983 in what was then West Germany.

Ironically, it’s the center-left government of Zoran Milanović, who leads the four-party Kukuriku coalition and its largest member, the Social Democratic Party of Croatia (SDP, Socijaldemokratska partija Hrvatske), that dug in its heels over the Perković law, not the more conservative, nationalist opposition party, the Croatian Democratic Union (HDZ, Hrvatska demokratska zajednica), which governed Croatia through much of the EU harmonization period, from 2003 through the December 2011 election.  The HDZ, as well as several top government officials opposed the law from the beginning, including Croatia’s foreign minister and deputy prime minister Vesna Pusić, the leader of the second-largest party in the Kukuriku coalition, the Croatian People’s Party/Liberal Democrats (HNS, Hrvatska narodna stranka/liberalni demokrati).

Milanović and the Croatian government eventually backed down in late September by amending the law in a way that complied with EU requirements, but only after Reding instituted formal EU proceedings, needlessly undermining Croatian credibility almost immediately after its EU accession.

Yet almost as soon as the extradition crisis ended, Croatia found itself embroiled in another difficult debate in holding the December 1 constitutional referendum on same-sex marriage.   Continue reading Was it a mistake for the European Union to admit Croatia earlier this year? →

Portugal

Portugal is set for a center-right government

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passoscoehlo

Twenty-two days later, Portugal is set to return to its center-right government, capping a month of twists and turns in a political crisis that began with the resignation of Portugal’s finance minister Vítor Gaspar and, then, the resignation of foreign minister Paulo Portas over the austerity program that Gaspar had been in charge of implementing as a condition of Portugal’s €78 billion bailout. portugal flag

Portugal’s prime minister Pedro Passos Coelho (pictured above) reached a deal over a week ago to continue the center-right government led by prime minister and his Partido Social Democrata (PSD, Social Democratic Party) in coalition with the more socially conservative party Portas leads, the Centro Democrático e Social – Partido Popular (CDS-PP, Democratic and Social Center — People’s Party), soothing the mercurial Portas by appointing him deputy prime minister and giving him additional input over future bailout discussions and the course of Portuguese economic policy.

But Portugal’s president Aníbal Cavaco Silva, formerly a PSD prime minister from 1985 to 1995, and himself often the subject of Portas’s barbed criticism, refused to approve the deal, instead asking the two parties to bring the opposition center-left Partido Socialista (PS, Socialist Party) into government for a ‘grand coalition’ that would govern through June 2014, the end of the current bailout program.

Read more background here.

Despite talks over the past week, the three parties have failed to come to an agreement, and Cavaco Silva will now approve the government, a move that’s already pushing down Portugal’s 10-year bond yield:

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Obviously, the Socialists would never join a government when they lead polls by nearly 10 points, despite the fact that it was the decision by Socialist prime minister José Sócrates to seek a bailout that led to snap elections in June 2011 that brought Passos Coehlo and Gaspar to power.

The challenge for Passos Coehlo is now three-fold: Continue reading Portugal is set for a center-right government →

Portugal

Coalition crisis brings Portugal back to center-stage in eurozone bailouts saga

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Cavaco Silva

Until today, Portgual’s beleaguered government looked like it would avoid crisis — just barely.portugal flag

But the decision by Portugal’s president to seek a broad unity government to carry out the terms of Portugal’s bailout program has cast doubt again on whether the center-right government led by Pedro Passos Coelho will be able to serve through the end of its natural term of government in 2015 or at least long enough to see through the termination of the €78 billion bailout program in June 2014.

Despite a deal last week that saw Passos Coelho’s more conservative coalition partners agree to return to government, Portuguese president Aníbal Cavaco Silva, who served as prime minister of Portugal from 1985 to 1995, is now pushing for a broader coalition in light of risks that the government might falter again.  Cavaco Silva’s top priority is that Portugal has a reliably strong government to see through the bailout program next year and to avoid snap elections now in favor of early elections sometime next June.

But that appears to have backfired, and it remains unclear just what will happen next in Portugal’s governing crisis — Cavaco Silva’s ploy may have made early elections even likelier, which are certain to become a referendum on further austerity measures in accordance with Portugal’s bailout.  The political crisis comes at a time when Lisbon was set to host International Monetary Fund and European Union officials next Monday for a review of the bailout program and amid reports that Portugal will require a second bailout when the current one runs out next year.

Portugal’s most recent crisis began when finance minister Vítor Gaspar resigned on July 1 after rising complaints over the implementation of the bailout program.  Gaspar, a technocratic economist first appointed after the June 2011 elections that swept Passos Coelho and his center-right Partido Social Democrata (PSD, Social Democratic Party) into power.  He had become the poster child for austerity and widely reviled as Passos Coelho’s party has fallen up to 10 points behind the main center-left opposition, the Partido Socialista (PS, Socialist Party) in polls.

Passos Coelho immediately appointed treasury secretary Maria Luís de Albuquerque as Gaspar’s replacement, but the following day, his foreign minister Paulo Portas resigned.  Portas, also the leader of his more socially conservative coalition partner, the Centro Democrático e Social – Partido Popular (CDS-PP, Democratic and Social Center — People’s Party), indicated that he would pull his party’s support from the coalition in opposition to the new finance minister’s appointment, arguing that it marked a continuity of policy with which Portas and his party now disagreed.

Nonetheless, a weekend deal between Passos Coelho and Portas appeared to have healed the rift — Portas would become deputy prime minister and take a larger role in steering the country’s finances, though de Albuquerque would remain as the new finance minister.  Though the deal required Cavaco Silva’s approval, it seemed likely to win it this week, given that Cavaco Silva (pictured above) had been crucial in bringing Passos Coelho and Portas back together.

Instead, Cavaco Silva’s call for a unity government to include the Socialist Party as well has renewed the Portuguese political crisis, given that the Socialists and their new leader, António José Seguro, continue to push for early elections rather than join a unity government.

Though Portuguese 10-year bond yields have fallen from a recent July 3 high of 7.47%, they edged up to a still-worrying 6.77% today after Cavaco Silva’s gambit.

While Cavaco Silva may have failed, his logic isn’t unreasonable.  Cavaco Silva’s goal was to steer Portugal between what he viewed as two poor alternatives — one in which he’ll have to trust  Portas and the conservative Christian Democrats to see through the bailout program, and another in which Portugal faces snap elections that could result in a hung parliament (or worse, if the two major leftist blocs outperform already robust expectations).

Continue reading Coalition crisis brings Portugal back to center-stage in eurozone bailouts saga →

Portugal

Gaspar defends Portuguese economic program at Brookings

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vitor

Portuguese finance minister Vítor Gaspar (pictured above) spoke to a small audience at the Brookings Institution Tuesday, notably less than 36 hours after Cyprus and the ‘troika’ of the European Commission, the European Central Bank and the International Monetary Fund agreed on the terms for a Cypriot bailout — the fifth such eurozone bailout during the currency zone’s sovereign debt crisis.portugal flag

Of course, Portugal is one of those of other five countries, and Gaspar, for the past 21 months, has been responsible for implementing the terms of Portugal’s own bailout program.

Gaspar presented as optimistic a case as possible for Portugal’s current economic state on Tuesday. But he admitted that despite gains in lowering the country’s budget deficit, restoring Portuguese banks to greater health, and boosting the growth of Portuguese exports (the latter as much a sign of painful ‘internal devaluation’ of wages and incomes within Portugal as any sign of newfound productivity or competitiveness), Portugal’s GDP growth and employment rate remain problematic.  The Portuguese economy contracted by 1.6% in 2011 and 3.2% in 2012, and is expected to contract by a further 2.3% in 2013, while its unemployment rate, as of the last quarter of 2012, is 16.9%, its highest level yet.

As Gaspar noted, Portugal’s economy — second only to Italy’s — was already on the ropes when it entered the eurozone.  In particular, from 1990 to 2012, he claimed that the Portuguese economy marked a poorer performance than either Japan during its ‘lost decade’ or the United States during the Great Depression.  Regardless of whether that’s exactly right, there’s no denying that Portugal has faced long-term structural problems — since 2000, it’s notched GDP growth in excess of 2% just once (in 2007, when it grew by 2.37%, and that was at the height of the eurozone and global credit boom).

Gaspar placed much of the blame on Portugal’s failure to pursue macroeconomic stability in accordance with ‘best practices’ — i.e., Portugal simply failed to adjust properly upon accession to the eurozone 14 years ago.

Gaspar serves under prime minister Pedro Passos Coelho, whose liberal, center-right Partido Social Democrata (PSD, Social Democratic Party) came to power in the last election in coalition with the more socially conservative Centro Democrático e Social – Partido Popular (CDS-PP, Democratic and Social Center — People’s Party).

Among his solutions are greater EU-level banking union as a means of reducing the risk premium associated with peripheral economies such as Portugal’s — Gaspar added that the higher borrowing costs that constitute financial headwinds, especially in the context of budgetary adjustment.

But it was surprising not to hear any mention of the emigration of up to 1 million Portuguese from the country over the past 14 years — and nearly 250,000 since 2011 alone.  Passos Coelho in late 2011 was criticized when he suggested that young, enterprising Portuguese citizens should emigrate to Portuguese-speaking countries, such as Brazil in South America, or to Angola in southeastern Africa, still in the throes of an oil boom.  Angolan visas issued to Portuguese nationals jumped from just 156 in the year 2006 to nearly 150,000 by mid-2012.

Mozambique, another former Portuguese colony, apparently issues 200 visas a day to Portuguese nationals.

Invariably, that escape valve has kept Portuguese unemployment lower than the rates over 25% recorded in Spain and Greece.

Edward Hugh at A Fistful of Euros has made a very compelling case that the emigration of younger, working age Portuguese, combined with a decreasing birth rate and greater longevity has resulted in relatively fewer workers contributing to pensions and health care for relatively greater numbers of retirees, placing extraordinary long-term fiscal pressure on Portugal, given the lackluster expectations for future growth: Continue reading Gaspar defends Portuguese economic program at Brookings →