Tag Archives: social democrats

Czech Republic

With Nečas out, the future of Czech government is in Zeman’s hands

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In his first 100 days in office, Miloš Zeman, the former social democratic prime minister who became the Czech Republic’s first elected president, made it clear that he intends his role to be much more powerful than a merely ceremonial head of state, pursuant to a Czech constitution that gives somewhat more power to the presidency than in neighboring countries like Germany, Poland or Italy.czech

But with the resignation of prime minister Petr Nečas, Zeman has an opportunity to imprint his vision of government on the Czech Republic beyond what he might have expected when he was elected in January 2013 over the aristocratic center-right foreign minister Karel Schwarzenberg.

Nečas’s resignation on Monday capped a fast-moving weeklong drama in Czech politics that has plunged the country of 10.5 million citizens into a period of uncertainty.

The crisis began last week with an unprecedentedly wide police raid of government offices that resulted in the arrests of eight government officials, including Nečas’s chief of staff, Jana Nagyová.  Though corruption has long been issue in Czech government, it often goes unpunished, and when corrupt officials are charged, they are rarely arrested in such a sweeping and high-profile manner.  Milan Kovanda, head of Czech military intelligence, and his predecessor Ondrej Páleník, were both arrested as well.

Nečas (pictured above) announced last week that he is divorcing Radka Nečasová, his wife of three decades and mother of his four children. But he has long been rumored to have had a romantic relationship with Nagyová, who is accused of bribery and abuse of power for allegedly having military spies follow Nečas’s wife.  The widespread belief that Nagyová is believed to have committed crimes that are associated with her relationship with Nečas made his position as prime minister increasingly difficult.  That, in turn, led to Nečas’s capitulation on Monday when he announced he would step down as prime minister and as leader of the Czech Republic’s main center-right party, the Občanská demokratická strana (ODS, Civic Democratic Party).  Nečas will remain as a caretaker prime minister until a new government is formed.

The center-right ODS has governed in coalition with Schwarzenberg’s liberal Tradice Odpovědnost Prosperita 09 or ‘TOP 09′ (Tradition Responsibility Prosperity 09) and with various members of a third, minor conservative party, Věci veřejné (VV, Public Affairs), since the May 2010 election, though the government nearly lost power when its smallest partner Public Affairs nearly imploded in 2012 over its own corruption scandals.  Despite Nečas’s resignation, Schwarzenberg’s allies want to try to form a new government under deputy ODS chairman Martin Kuba, the current trade and industry minister, that will continue to govern through the end of the current parliamentary term in May 2014.

ČSSD leader Bohuslav Sobotka, however, is calling for early elections and has promised that any new ODS-led government will meet with a vote of no confidence that Kuba is not certain to win.

The decision rests entirely in Zeman’s hands — he can give Kuba a mandate to form a new government, he can call early elections, or he could try to give the mandate to Sobotka or, more likely, a technocratic government that would be expected to do Zeman’s bidding for the next 11 months.

Though ODS holds 53 seats and TOP 09 holds 41 seats, the Česká strana sociálně demokratická (ČSSD, Czech Social Democratic Party), with 56 seats, has the greatest number of seats in the 200-seat Poslanecká sněmovna (Chamber of Deputies), the lower house of the Czech parliament.  Zeman, a former  ČSSD leader and prime minister from 1998 to 2002, broke with the ČSSD in 2009, and the ČSSD sponsored an alternative candidate for president earlier this year in Jiří Dienstbier Jr., a young senator, rising star and son of a famous Czech dissident.  But since becoming president, Zeman has taken steps to realign himself with the ČSSD, speaking to the party’s annual congress in March 2013 and otherwise worked to bridge the gap between with the current ČSSD leadership.

Though Schwarzenberg emerged as a surprisingly strong contender for the presidency in January, the ODS candidate finished in eight place with less than 2.5% of the vote in the first round of the presidential election.  The party remains relatively unpopular after implementing an all-too-familiar austerity program of tax increases, budget cuts and reductions in government services alongside an economy that contracted by an estimated 1% in 2012 and that features a rising unemployment rate that’s currently at 7.3%. The fantastic scandal over the past week that’s now ended Nečas’s career came when the ČSSD was already in a strong position in advance of the next parliamentary elections — polls show the ČSSD with a wide lead.  One poll last month gave the ČSSD 24% support, with the more leftist (though increasingly a potential ČSSD coalition ally) Komunistická strana Čech a Moravy (KSČM, Communist Party of Bohemia and Moravia) far behind in second place with just 10.5% support, with TOP 09 at 9.5% support and the ODS with 9% support.

Zeman, who passed the 100-day mark of his presidency just last week, has taken an aggressive posture as president, convinced that the fact of his direct electoral mandate (unlike past presidents Václav Havel and Václav Klaus, who were elected indirectly by the Czech parliament) gives Zeman more authority to assert himself over the Czech government.  He immediately set out to boost Czech ties with the European Union by flying the EU flag at Prague Castle, the presidential residence, and signing amendments to the EU Treaty of Lisbon, both of which marked a 180-degree turn from the relatively antagonistic EU policy of Klaus, his immediate predecessor.  He’s also tangled with Schwarzenberg over the right to name the country’s ambassadors.

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What Iceland’s election tells us about post-crisis European politics

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Iceland was supposed to be different.Iceland Flag IconEuropean_Union

In allowing its banks to fail, neo-Keynesian economists have argued, Iceland avoided the fate of Ireland, which nationalized its banks and now faces a future with a very large public debt.  By devaluing its currency, the krónur, Iceland avoided the fate of countries like Estonia and others in southern Europe trapped in the eurozone and a one-size-fits all monetary policy, allowing for a rapid return to economic growth and rapidly falling unemployment.  Neoclassical economists counter that Iceland’s currency controls mean that it’s still essentially shut out from foreign investment, and the accompanying inflation has eroded many of the gains of Iceland’s return to GDP growth and, besides, Iceland’s households are still struggling under mortgage and other debt instruments that are linked to inflation or denominated in foreign currencies.

But Iceland’s weekend parliamentary election shows that both schools of economic thought are right.

Elections are rarely won on the slogan, ‘it could have been worse.’ Just ask U.S. president Barack Obama, whose efforts to implement $800 billion in stimulus programs in his first term in office went barely mentioned in his 2012 reelection campaign.

Iceland, as it turns out, is hardly so different at all — and it’s now virtually a case study in an electoral pattern that’s become increasingly pronounced in Europe that began when the 2008 global financial crisis took hold, through the 2010 sovereign debt crisis in the eurozone and through the current European-wide recession that’s seen unemployment rise to the sharpest levels in decades.

Call it the European three-step.

In the first step, a center-right government, like the one led by Sjálfstæðisflokkurinn (Independence Party) in Iceland in 2008, took the blame for the initial crisis.

In the second step, a center-left government, like the one led by Jóhanna Sigurðardóttir and the Samfylkingin (Social Democratic Alliance) in Iceland, replaced it, only to find that it would be forced to implement harsh austerity measures, including budget cuts, tax increases and, in Iceland’s case, even more extreme measures, such as currency controls and inflation-inducing devaluations.  That leads to further voter disenchantment, now with the center-left.

The third step is the return of the initial center-right party (or parties) to power, as the Independence Party and their traditional allies, the Framsóknarflokkurinn (Progressive Party) will do following Iceland’s latest election, at the expense of the more newly discredited center-left.  In addition, with both the mainstream center-left and center-right now associated with economic pain, there’s increasing support for new parties, some of them merely protest vehicles and others sometimes more radical, on both the left and the right.  In Iceland, that means that two new parties, Björt framtíð (Bright Future) and the Píratar (Pirate Party of Iceland) will now hold one-seventh of the seats in Iceland’s Alþingi.

This is essentially what happened last year in Greece, too.  Greece Flag IconIn the first step, Kostas Karamanlis and the center-right New Democracy (Νέα Δημοκρατία) initially took the blame for the initial financial crisis.  In the second step, George Papandreou and the center-left PASOK (Panhellenic Socialist Movement – Πανελλήνιο Σοσιαλιστικό Κίνημα) overwhelming won the October 2009 elections, only to find itself forced to accept a bailout deal with the European Commission, the European Central Bank and the International Monetary Fund.  In the third step, after two grueling rounds of election, Antonis Samaras and New Democracy returned to power in June 2012.

By that time, however, PASOK was so compromised that it was essentially forced into a minor subsidiary role supporting Samaras’s center-right, pro-bailout government.  A more radical leftist force, SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς), led by the young, charismatic Alexis Tsipras, now vies for the lead routinely in polls, and on the far right, the noxious neo-nazi Golden Dawn (Χρυσή Αυγή) now attracts a small, but significant enough portion of the Greek electorate to put it in third place.

The process seems well under way in other countries, too.  In France, for examFrance Flag Iconple, center-right president Nicolas Sarkozy lost reelection in May 2012 amid great hopes for the incoming Parti socialiste (PS, Socialist Party) administration of François Hollande, but his popularity is sinking to ever lower levels as France trudges through its own austerity, and polls show Sarkozy would now lead Hollande if another presidential election were held today.

It’s not just right-left-right, though. The European three-step comes in a different flavor, too: left-right-left, and you can spot the trend in country after country across Europe — richer and poorer, western and eastern, northern and southern. Continue reading What Iceland’s election tells us about post-crisis European politics →

Austria

Stronach’s much-heralded Austrian effort falls flat in Lower Austria and Carinthia

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It takes some brass for anyone, even a billionaire, to come to Austria after a lifetime in Canada thinking he can revolutionize politics, least of all as a know-it-all North American running against the euro — a monetary project infused with much more emotional and social content than just economics. austria flag

But brass runs strong in the Stronach family, and although Belinda Stronach took Canada by storm a few years ago — first as a candidate for leader of the Conservative Party and later as a minister in Paul Martin’s ill-fated Liberal government before she crashed and burned when the Liberals lost the 2006 federal election — her father, Frank Stronach, mostly seemed content as the chairman of Magna International, the hugely successful Canadian auto parts company that he founded.

Stronach, a citizen of both Canada and Austria, came to Canada at age 18 from Austria and, while he’s had an incredibly philanthropic footprint in Austria, he’s always been better known as an international businessman and billionaire than as a politician.

Until last year, when, after retiring as Magna’s chairman in 2011, Stronach founded a new party in Austria, Team Stronach, that had its first test in local elections Sunday in Lower Austria and Carinthia, two of Austria’s nine states.  The party, which promotes classical liberalism, supports an all-volunteer army (despite a January 2013 referendum in which Austrians voted 60 to 40% to retain its current conscription force), a 25% flat tax on national incomes and, most controversially, the reintroduction of the Austrian shilling.  Unlike many far right parties in Austria and in Europe, however, Stronach’s party is pro-immigrant and, except as regards the euro, fairly pro-Europe.

The name of Frank’s new party, ‘Team Stronach’ tells you everything you need to know about the movement — it’s more an 80-year-old man’s legacy project than a protest movement like, say, Beppe Grillo’s near-revolutionary Movimento 5 Stelle (Five Star Movement) in Italy.  Even in Prague, foreign minister Karel Schwarzenberg is taken more seriously despite charges of carpetbagging — he lost the recent Czech presidential election in part because he spent over four decades of his early life outside Czechoslovakia / the Czech Republic (in Austria, of all places).

Despite a colorful collection of small parties, politics in Austria, a relatively wealthy Central European country of 8.5 million, remains essentially dominated by two parties — the center-left Sozialdemokratische Partei Österreichs (SPÖ, the Social Democratic Party) and the Christian democratic Österreichische Volkspartei (ÖVP, the People’s Party).  The SPÖ and the ÖVP have governed in a ‘grand coalition’ since 2006.

Two additional parties have historically held significant influence as well — the Freiheitliche Partei Österreichs (FPÖ, the Freedom Party), a right-wing populist party, well-known for its fiery former leader Jörg Haider, who led the party to government in 1999 and in 2002 (as a junior partner with the ÖVP), and the Greens (Die Grünen).

Austria will vote at the end of September 2013 to elect the 183 members of its lower house of parliament, the National Council (Nationalrat) — polls show the SPÖ, led by Austria’s chancellor, Werner Faymann, holds a narrow, but steady, lead (25% to 28%) over the ÖVP (with around 22% to 24%), with the FPÖ a bit behind (19% to 22%) and the Greens even further behind (13% to 15%).  Team Stronach is in fifth place — although its support is growing, it has peaked at around 8% to 12% of the vote.

Austria, unlike most European countries, is still posting economic growth — between 0.5% and 1.0% in 2012 and nearly 3.0% in 2011, despite an increasingly relentless recession throughout Europe that is now threatening to affect even Germany.  Austrian unemployment remains relatively low as well — around 9%, but still less than Italy’s unemployment.

So how did Stronach’s new party do on Sunday in Lower Austria and Carinthia? Continue reading Stronach’s much-heralded Austrian effort falls flat in Lower Austria and Carinthia →

Czech Republic

Zeman and Schwarzenberg to face off for Czech presidency

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Human Rights Council, High-Level

This weekend’s Czech presidential election resulted in something of a surprise, with center-right foreign minister Karel Schwarzenberg (pictured above) surging to a very close second place against front-running center-left candidate and former prime minister Miloš Zeman.czech

Zeman and Schwarzenberg will now compete in a runoff to be held on January 25 and 26 in the Czech Republic’s first direct presidential election in its post-Cold War history to succeed Václav Klaus, the Czech Republic’s president since 2003, an outspoken conservative and euroskeptic.

Schwarzenberg won a surprisingly high 23.40% of the vote, trailing less than 1% behind Zeman, edging out a statistician and former caretaker prime minister Jan Fischer, who won just 16.35% and nearly finished in fourth place behind another center-left candidate, Jiří Dienstbier Jr.  Fischer led polls as recently as a week or two ago, though his performance in a debate against Zeman in early January was seen as lackluster, fueling a boom for Zeman’s poll support heading into last weekend’s vote.

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Ominously for the current Czech government, the candidate of the governing Občanská demokratická strana (ODS, Civic Democratic Party), Přemysl Sobotka, a senator, finished in 8th place with just 2.46% of the vote, likely a result of his relatively obscurity in a field of longtime titans of Czech political life and of the brutal austerity measures that the current ODS-led government of Petr Nečas.

Schwarzenberg won throughout the center of the country in his native Bohemia and in Prague and other urban areas; Zeman dominated much of the rest of the country, including rural Moravia in the east and rural areas in the north.

So what should we expect in the final runoff?  Continue reading Zeman and Schwarzenberg to face off for Czech presidency →

Czech Republic

Czech prepare for first direct presidential elections

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Unlike most countries with a parliamentary-based prime minister as head of government, the Czech Republic’s president holds more than ceremonial powers — and that makes this weekend’s Czech presidential election, the first direct election by voters of the Czech president in the post-Soviet era, a bit more important than a ceremonial formality. czech

Two candidates, Jan Fischer (pictured above, right) and Miloš Zeman (pictured above, left) are largely seen leading the nine-candidate field.  Following the first round, to be held Friday and Saturday, the top two candidate will compete in a runoff to be held on January 25 and 26.

The Czech president has the power to veto bills passed by the Czech parliament as well as the power to appoint judges to the supreme court and the constitutional court, as well as members of the Czech national bank and members of the office that implements the national budget.  In many instances, the Czech president and the Czech prime minister act as co-executives, especially with regard to matters of foreign relations.

In addition to the unique Czech constitutional framework, however, it’s worth noting that since the emergence of Czechoslovakia from behind the Soviet-dominated Iron Curtain and the peaceful dissolution of Czechoslovakia on January 1, 1993, two incredibly forceful personalities have held the office of the Czech presidency:

  • Václav Havel, president until 2003, a former playwright and author and public intellectual whose dissident efforts began with the Prague Spring in 1968 and who was jailed several times in the 1970s and 1980s by the Soviet-controlled communist Czech government.  His moral authority and his widespread international respect gave him an incredibly broad platform as president.
  • Václav Klaus, who succeeded Havel and who will leave office this year (amid a bit of scandal over presidential clemency), is an outspoken conservative who founded the Czech Republic’s main center-right party, the Občanská demokratická strana (ODS, Civic Democratic Party), and who served as prime minister from 1992 to 1997.  As president, he’s taken strong stands in favor of limiting European Union power as one of the loudest critics of the EU’s 2007 Lisbon treaty (though he ultimately signed the treaty, allowing it to go into effect in 2009).

So as voters head to the polls in the first presidential election of its kind in the Czech Republic (Havel and Klaus were selected indirectly by the Czech parliament), it’s worth noting that the next Czech president will likely play an important role in Czech and European affairs alike.

Fischer, who until recently led many polls throughout the muted campaign, would be the Czech Republic’s first Jewish president (and, indeed, the world’s first Jewish head of state outside of Israel).  A soft-spoken statistician, he headed the Czech Statistical Office from 2003 to 2009, when he was selected as a technocratic, caretaker prime minister after prime minister Mirek Topolánek’s center-right government fell in March 2009 through the 2010 elections.  He is widely admired for his performance as prime minister, which included measures to protect the Roma, a minority group persecuted by Czech right-wing extremists.  In the presidential race, he has been criticized mostly for his membership in the Czech Communist Party during the Soviet era, and Fischer has apologized for that, despite claiming that he became a member only in order to keep his job in government.

Zeman, who until 2009 belonged to — and once led — the Czech Republic’s main center-left party, the Česká strana sociálně demokratická (ČSSD, Czech Social Democratic Party), is as sharp-elbowed and brash as Fischer is mild-mannered, and he has narrowly begun to eclipse Fischer in the polls after being widely seen to have won a debate earlier this month.  He lost the 2003 presidential election to Klaus after serving as prime minister from 1998 to 2002, and he left the ČSSD four years ago to form his own party, the Strana Práv Občanů – Zemanovci (SPOZ, Party of Civil Rights — Zemanovci).

Ironically, Fischer and Zeman outpace the actual candidates of both the ODS and the ČSSD.

Continue reading Czech prepare for first direct presidential elections →

Lithuania

Lithuania’s president throws post-election coalition talks into disarray

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Lithuanian’s highly respected president, Dalia Grybauskaitė, has upended what everyone thought would be a broad leftist coalition following the second and final round of Lithuanian parliamentary elections on Sunday.

Following a victory by the social democratic Lietuvos socialdemokratų partija (LSDP, Social Democratic Party of Lithuania), which won 38 seats after the first round on October 14 and October 28, it seemed likely that the Social Democrats would form the next government, a coalition headed by Social Democratic leader and former finance minister Algirdas Butkevičius.

It had always been expected that Butkevičius would lead a broad center-left coalition with the support of the more populist Darbo Partija (DP, Labour Party), led by Russian-born Viktor Uspaskich, which won 19.95% of the first-round vote on October 14 to just 18.46% for the Social Democrats and 14.90% for outgoing prime minister Andrius Kubilius’s center-right Tėvynės sąjunga – Lietuvos krikščionys demokratai (TS-LKD, Homeland Union — Lithuanian Christian Democrats).

That October 14 vote determined the 70 seats allocated to Lithuania’s parliament, the Seimas, by proportional representation.  The remaining 71 seats were determined by single-member district votes, many of which were determined in the runoff votes held last Sunday, after which the Social Democrats emerged as the largest force, followed closely by Homeland Union with 33 seats and Labour with 29.

Indeed, the Social Democrats, Labour and a third party — Tvarka ir teisingumas (TT, Order and Justice) — had agreed an electoral pact to form a government.  Together, the three parties would command an absolute majority of 79 seats.  So the outcome seemed more or less a fait accompli.

Until Monday, when Grybauskaitė intervened, arguing that Labour is, essentially, unfit for government, and pledging not to nominate a prime minister who will govern with Labour support:

…Grybauskaite said she refused to back a coalition which included Labor, which stands accused of buying votes during the two rounds of voting.

“A party which is suspected of gross violations in the election, which is suspected of false accounting and non-transparent activities cannot participate in the government’s formation,” the president told reporters.

She said police were investigating 27 election irregularities, 18 of which concerned alleged vote buying, with the Labor Party accused of involvement in most of them.

Grybauskaitė, a political independent, is a highly-respected former European Commission for Financial Programming and the Budget from 2004 to 2009.  In the May 2009 presidential election, she became Lithuania’s first head of state by winning a whopping 69.1% victory, with her closest rival Butkevičius at 11.8% support.

On Wednesday, however, the three parties invited a fourth party, the Lietuvos lenkų rinkimų akcija (AWPL, Electoral Action of Poles in Lithuania; Akcja Wyborcza Polaków na Litwie in Polish), a Christian democratic party devoted to ethnic Polish issues, into their coalition talks, which would give it 87 seats — more than the 85-vote majority it would need to override a presidential veto.  So it’s unclear that Butkevičius and his electoral allies are willing to back down, potentially setting up a constitutional showdown with Grybauskaitė, who is Lithuania’s most popular public figure by far. Continue reading Lithuania’s president throws post-election coalition talks into disarray →

Lithuania

Lithuanian Social Democrats in place to run next government

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So we have the results of Lithuania’s full two rounds of elections: the Lietuvos socialdemokratų partija (LSDP, Social Democratic Party of Lithuania) have won the greatest number of seats in the Seimas, Lithuania’s parliament, following a runoff election yesterday.

Although 70 seats are determined by proportional representation on the basis of the first-round vote on October 14, the LSDP won a disproportionately high number of the 71 seats in the Seimas that are determined in single-member districts.

In the first round of the election, the more populist Darbo Partija (DP, Labour Party), led by Russian-born Viktor Uspaskich, won 19.96% of the vote, while the Social Democrats won just 18.45% and the governing Tėvynės sąjunga – Lietuvos krikščionys demokratai (TS-LKD, Homeland Union — Lithuanian Christian Democrats) of outgoing prime minister Andrius Kubilius won 14.93%.

For lots of reasons, this scared the rest of Europe.  Uspaskich, under investigation a few years ago for corruption, actually hid out in Russia, so a Uspaskich-headed government would be a nightmare for Europe, given that Lithuania’s already not just a European Union member, but a member of the North Atlantic Treaty Organization.

But by the end of the second round, the Social Democrats took 23 of the 71 single-district seats — Homeland Union won just 20, and Labour won just 12 — much like in past Lithuanian elections, Labour had a stronger result from the proportional results than from the direct-election results.

The result, which will give the Social Democrats the largest bloc of seats in the Seimas, makes it all but certain that the leader of the Social Democrats, Algirdas Butkevičius (pictured above, bottom), a former finance minister, will become Lithuania’s next prime minister.  Furthermore, although he’s signed an electoral pact with Uspaskich’s Labour Party and Tvarka ir teisingumas (TT, Order and Justice), a shape-shifting  populist party led by former president Rolandas Paksas, who was impeached for corruption in 2004, the result will give Butkevičius a boost vis-a-vis even his coalition partners.

So Europe, which was wary of a Uspaskich-dominated government (even if Labour ultimately won more seats than the Social Democrats, will be a little more relaxed following Sunday’s runoff vote — although it was always thought that Butkevičius would nonetheless become prime minister, his position will be much stronger than Uspaskich’s, or any of the more nefarious characters of Lithuanian politics, with the Social Democrats having won the clearest plurality of parliamentary seats.

Kubilius, who had a difficult hand to play after the past four years in government, duly trimmed the Lithuanian budget after the financial crisis of 2008-09 saw Lithuania’s GDP plummet by 15%.  Indeed, the Lithuanian election result, in both rounds, was much better for Kubilius’s Homeland Union than polls had suggested, indicating that Kubilius received more credit than expected from a Lithuanian electorate that’s nonetheless weary of austerity, economic stagnation and unemployment.

Although Butkevičius won’t likely be able to effect a 180-degree change in Lithuanian policy, he has championed the introduction of a progressive income tax and minimum salaries.  Furthermore, although he’s been less enthusiastic (along with much of eastern Europe) about his country’s accession into the eurozone, European leaders seem much likelier to be happy with a pro-European center-left prime minister like Butkevičius than either Uspaskich or Paksas.

So ultimately, on a day when Ukraine seemed to fall further backwards on democracy and the rule of law, Lithuania seems to have marked another peaceful transfer of government within the broad tradition of European political norms.

Germany

Thoughts on what a Steinbrück government would mean for U.S.-German relations

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I’ve written a short piece today for Deutsche Welle looking at how U.S.-German relations might (slightly) vary if Peer Steinbrück, chancellor candidate for the center-left  Sozialdemokratische Partei Deutschlands (SPD, Social Democratic Party), defeats current German chancellor Angela Merkel, of the center-right Christlich Demokratische Union Deutschlands (CDU, Christian Democratic Party) in elections expected to be held in September 2013.

By and large, the main priority for U.S. policymakers, no matter who wins the Nov. 6 presidential election in the United States, will be that Germany keeps the eurozone from spiraling into crisis.

The key point is that U.S. policymakers should expect continuity, mostly, on the German position vis-a-vis the eurozone and on German economic policy:

Steinbrück, who served as Germany’s finance minister under Merkel in the SPD-CDU grand coalition government from 2005 to 2009, would also mark continuity in German economic policy – in contrast to center-left leaders such as former UK prime minister Gordon Brown and current French president Francois Hollande, Steinbrück derided Keynsian economics in 2008 and, alongside Merkel, refused to consider large amounts of stimulus funding in 2008 and 2009.

Nonetheless, on European policy, as well as on the more narrow focus of German economic policy, Steinbrück would not exactly mark a rupture; that will be especially true if the next German election leads to another grand coalition between the CDU and SPD.

Steinbrück emerged as the SPD candidate last month.

Ultimately, I note, the biggest area for potential disagreement is on foreign policy especially in light of the rift over Iraq between then-U.S. president George W. Bush and then-German chancellor Gerhard Schröder a decade ago:

[N]owhere will the US election matter more than in the area of foreign policy – a Romney administration would be much more likely than the Obama administration to consider military action to prevent Iran from achieving nuclear weapon capability.  While Merkel’s government has supported the Obama administration’s approach for increasingly tougher economic sanctions on Iran, it seems unlikely that Germany, especially under a SPD chancellor, would have much appetite for military action in Iran.

Lithuania

Lithuania election results

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We have the first-round preliminary election results from Lithuania, and it confirms what was previously reported, and roughly what polls had shown in the lead-up to the parliamentary elections: the two major leftist/populist opposition parties have won the most seats, likely ending the four-year government of center-right prime minister Andrius Kubilius, who ushered in an era of budget austerity following the financial crisis of 2008-09 that saw Lithuania’s GDP plummet by 15%.

The populist Darbo Partija (DP, Labour Party), led by Russian-born Viktor Uspaskich, won 19.96% of the vote yesterday, and the more traditionally center-left Lietuvos socialdemokratų partija (LSDP, Social Democratic Party of Lithuania) won 18.45%.

Kubilius’s own party, the Tėvynės sąjunga – Lietuvos krikščionys demokratai (TS-LKD, Homeland Union — Lithuanian Christian Democrats) won 14.93%, a bit higher than polls had predicted in advance of the vote.

Sunday’s vote was the first of a two-round process: 70 seats in Lithuania’s unicameral parliament, the Seimas, were alloted by proportional representation.  An addition 71 seats will be determined by single-member individual districts, many of which will be determined in a runoff vote, to be held October 28.  On the basis of Sunday’s vote, Labour will have won 17 seats, the Social Democrats 16 seats and Homeland Union 12 seats.

The Social Democrats and Labour are expected to win sufficient seats between yesterday and the individual district runoffs to form a government with another smaller party, Tvarka ir teisingumas (TT, Order and Justice).  In the 2004 and 2008 elections, the Social Democrats have typically done as well or better in the individual districts than in the proportional vote; Labour, however, has typically done either as well or worse.  So it’s still quite possible that the Social Democrats will emerge with a greater number of seats than Labour, notwithstanding Labour’s narrow victory on Sunday.

Regardless of whether Labour or the Social Democrats technically win more seats, it is expected that the leader of the Social Democrats, Algirdas Butkevičius, a former finance minister, will serve as the new prime minister.  In 2004, when Labour emerged as the largest party in the Seimas (then also under Uspaskich’s leadership), it allowed a Social Democrat to be prime minister.  Since then, Uspaskich has been embroiled in a corruption scandal over his party’s finances, and Uspaskich himself spent parts of 2006 and 2007 apparently in hiding in Russia.

So it’s a safe bet that the international community (especially the United States, the rest of the European Union and the bondholders who are pricing Lithuanian debt) would prefer a Butkevičius-led government, not a Uspaskich-led one — and Lithuania’s new governing coalition seems sure to recognize that.  The success of Uspaskich’s party alone, and his influence on the next Lithuanian government, will itself be enough to delay a potential Lithuanian accession into the eurozone as well as cause some alarm with regard to a potentially more pro-Russia foreign policy from the Lithuanian government.  A government led by Uspaskich could potentially bring Lithuania back into economic crisis and put it at odds with the rest of Europe. Continue reading Lithuania election results →

Lithuania

Meet the new power threesome of Lithuania: Algirdas Butkevičius, Viktor Uspaskich and Rolandas Paksas

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Lithuanians are voting today to select new members of the Seimas, the country’s 141-seat unicameral legislature.

After four years of budget-crushing austerity and slow economic recovery under Andrius Kubilius, the longtime leader of Lithuania’s center-right Tėvynės sąjunga – Lietuvos krikščionys demokratai (TS-LKD, Homeland Union — Lithuanian Christian Democrats) appears headed for defeat.

Under the two-round parallel voting system, voters choose 70 seats by proportional representation (all of which will be determined today) and 71 seats directly in individual districts (many of which will proceed to a second round on October 28).  After today, though, we should have a good idea of who will win the largest number of seats.

Throughout much of the campaign, the longtime center-left Lietuvos socialdemokratų partija (LSDP, Social Democratic Party of Lithuania) looked set to emerge as the largest party.  But the most recent poll shows that it’s essentially tied with the more populist Darbo Partija (DP, Labour Party).

An October 10 poll showed the Social Democrats with 16.9% of the vote to just 15.8% for Labour.  Both parties have joined an electoral pact, along with a third party, Tvarka ir teisingumas (TT, Order and Justice), which garnered 8.2% in the poll.  Homeland Union won just 7.6%.  The socially and free-market liberal Liberalų Sąjūdis (LRLS, Liberal Movement) won 5.8% — the only other party to garner over 5%, the threshold for a party to enter the Seimas on the proportional representation vote.

It seems certain that the two most important individuals to drive Lithuanian policy over the next four years (the Seimas has a fixed term) will be the leader of the Social Democrats, Algirdas Butkevičius (pictured above, right), who will likely become prime minister, and the leader of the Labour Party, Viktor Uspaskich (pictured above, left).  The third party in the electoral pact, Order and Justice, is essentially a personality-driven vehicle for its leader, Rolandas Paksas (pictured above, center), and it has veered both left and right.

Butkevičius and his allies have promised to relax some of the budget austerity that has brought Lithuania’s deficit down from nearly 10% of GDP to near the European Union cap of 3%.  That has caused some concern among bondholders and EU leaders, who have largely applauded Kubilius’s government and rewarded Lithuania with relatively low bond rates.  After a nearly disastrous 2008-09, when Lithuania’s economy collapsed by nearly 15%, GDP growth has now largely returned to Lithuania — 6% growth in 2011.  Although the Baltics have largely been held up as showcase examples for budget austerity (despite the protestations of Paul Krugman), unemployment remains staggeringly high at nearly 13%, and both Butkevičius and Uspaskich have said their chief priority will be creating jobs.

Although Lithuania is not hampered by the terms of any EU-based or International Monetary Fund loans, its government has been nudging the country toward adopting the euro, which necessitates getting Lithuania’s budget deficit within 3% of GDP, among other financial benchmarks.

Butkevičius, throughout the campaign, has called for the introduction of a progressive income tax and minimum salaries, and he’s also questioned the rapid accession of Lithuania into the eurozone.  But it’s difficult to know where the bluster ends and real policy changes would begin.  Butkevičius, a former finance minister in the Social Democrat-led government from 2004 to 2008, has already started to back away from some of his more populist stances.

Throughout Europe this year, we’ve seen anti-austerity candidates win elections on the strength of ‘pro-growth’ policies, only to realize in office that financial constraints restrict their maneuverability.  We’ve seen this in Greece, in France (where president François Hollande’s popularity is already sinking) and in the Netherlands (where the anti-austerity Labour Party looks set to join a coalition with budget-cutting prime minister Mark Rutte).

It’s doubtful that tiny Lithuania would be the exception — so a Butkevičius-led government would probably run into many of the same constraining dynamics.

But in addition to the populist rhetoric, there’s more cause for worry — from the two individuals that Butkevičius will likely join in his coalition. Continue reading Meet the new power threesome of Lithuania: Algirdas Butkevičius, Viktor Uspaskich and Rolandas Paksas →

Lithuania

Lithuanian left closes in on victory in advance of Oct. 14 parliamentary elections

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It’s a great autumn for post-Soviet elections — not less than a month after a less-than-fair Belarusian election and after an upset in parliamentary elections in Georgia, and with Ukrainian elections set for the end of the month, another former Soviet republic is set to go to the polls in just two weeks — Lithuania, the largest and most populous of the three Baltic states.

In nearly every election since 1992, Lithuanians have see-sawed every four years between more right-wing and left-wing parties.  So after a more left-wing coalition governed from 2004 to 2008, Andrius Kubilius (pictured above with, heh, Santa Claus), who previously served as prime minister from 1999 to 2000, returned as prime minister as the leader of Tėvynės sąjunga – Lietuvos krikščionys demokratai (TS-LKD, Homeland Union — Lithuanian Christian Democrats).

And now, as the first round of this month’s elections approach on October 14, both of Lithuania’s two largest left-wing parties look set to return to power, with promises to end the current government’s austerity measures in order to focus on unemployment.

Lithuania’s Seimas, (in full, the Lietuvos Respublikos Seimas, or the Lithuanian National Parliament) is the Baltic nation’s 141-member unicameral legislature.  Members are elected for a set four-year term — 71 of the seats are elected in individual districts, whereas the remaining 70 seats are elected under proportional representation.  The threshold is 5% of the national vote for a single party and 7% for a multi-party coalition running together on the same slate.  The strict proportional representation members will be elected on October 14, while voting in individual districts will take place on October 14 and October 28 (in the event of a runoff between the top two candidates — in order to avoid a runoff, a candidate must win (i) an absolute majority with a turnout of over 40% or (ii) an absolute majority representing at least 20% of the registered voters in the constituency).

Even under the relatively high proportional representation standards for election to the Seimas, Lithuania has a fairly high number of parties, but two parties in particular seem to dominate Lithuanian politics: Homeland Union and the Lietuvos socialdemokratų partija (LSDP, Social Democratic Party of Lithuania).  The Social Democrats were the largest party in the coalition that emerged after the 2004 election, and look set to return in that role. Continue reading Lithuanian left closes in on victory in advance of Oct. 14 parliamentary elections →

Germany

Steinbrück set to challenge Merkel as SPD candidate for chancellor

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In a month when most eyes have been on Germany’s current finance minister, all eyes are now on Germany’s former finance minister, Peer Steinbrück, who is now set to become the main challenger to German chancellor Angela Merkel in federal elections expected later in 2013.

In a bit of a surprise, Steinbrück was named as the candidate of the main opposition party, the center-left Sozialdemokratische Partei Deutschlands (SPD, Social Democratic Party) on Friday after the other main contender, Frank-Walter Steinmeier, indicated that he didn’t want to run.

Among the trio of Steinmeier, Steinbrück and party leader Sigmar Gabriel, Steinbrück has always been the clear favorite.

But perhaps the most jarring element of Friday’s announcement was that SPD party leaders simply announced the news — in Germany, there are no primaries and no leadership contest as such to determine who will be the candidate for chancellor (essentially, think of the German chancellor much like a very strong prime minister rather than a president). Gabriel is highly unpopular among voters and Steinmeier previously led the SPD against Merkel and her governing Christlich Demokratische Union Deutschlands (CDU, Christian Democratic Party) — to disastrous result.

In the previous September 2009 general election, Steinmeier won just 23% for the SDP and lost 76 seats (for a total of just 146).  The party thereupon fell out of the CDU-SDP “grand coalition” that had governed Germany since 2005.  The CDU, which won 34% and 239 seats, was able to form a more rightist coalition with its preferred partner, the Freie Demokratische Partei (FDP, Free Democratic Party), which won 15% and 93 seats. Steinmeier had previously served in the “grand coalition” as foreign minister.

The next federal election in Germany is expected to be held in September or October 2013.

Steinbrück, however, remains a less than ideal candidate — he served as Merkel’s finance minister from 2005 to 2009, so it’s going to be difficult for Steinbrück to draw as clear a contrast on economic policy as might otherwise be the case, even with signs that Germany, the last beacon of economic strength throughout the eurozone, is now also likely headed into recession.  As finance minister, Steinbrück famously (demonstrating his, ahem, willful side) derided Keynesian economics and criticized the stimulative approach of the UK’s government under Labour prime minister Gordon Brown, but he is well regarded, alongside Merkel, for steering Germany reasonably well through the 2008-09 financial panic. (Note: Paul Krugman will be happy).

On Europe, too, the German electorate seems receptive to a populist challenge to Merkel’s performance on European affairs — Germans are incredibly weary of four years of what they see as German bailouts of profligate governments from Portugal to Greece.  Nonetheless, the SPD is actually more pro-Europe than the CDU — and especially more pro-Europe than the CDU’s sister party in Bavaria, the Christlich-Soziale Union (CSU, Christian Social Union).  In Bavaria, the CSU-led government’s finance minister Markus Söder has all but called for Greece to be booted out of the eurozone.

In any event, German voters seem fairly well disposed to giving credit to Merkel for walking a tight line between letting the eurozone crumble, on the one hand, and holding governments in Spain, Ireland, Portugal, Italy and Greece to very tight austerity plans in exchange for European monetary and fiscal support, on the other hand.

The latest polls show the CDU-CSU with a very healthy lead of around 38% to just barely 30% for the SDP — since 2010 and 2011, the gap has only grown wider in favor of the CDU-CSU.  The FDP, however, looks set to collapse, picking up just 4%, though the SDP’s preferred coalition partners, Bündnis 90/Die Grünen (the Greens) poll a very strong 13%.  The newly-formed Piratenpartei Deutschland (Pirate Party) and the more leftist Die Linke (The Left Party) poll 6% each.  Given Steinbrück’s centrist characteristics, I would not be surprised to see the current soft support for the Pirate Party migrate to the Left Party or to the Greens — there will be a lot of room on the left in a Merkel-Steinbrück race to win support, both on Europe and on economic policy, especially if Germany’s economy continues in a downward trajectory.  Given the Left Party’s strong base of support in the former East Germany, there’s a real opportunity for the Left to break out.

The ideal candidate for the SPD may well have been the premier of Germany’s most populous state, North Rhine-Westphalia, Hannelore Kraft, who led the SPD to a huge victory in elections in May of this year.  A premier with charisma, who has championed a more activist state response to boost economic growth, and who could well have been Germany’s second woman as chancellor, Kraft indicated earlier this year that she was not interested in running for chancellor.