Europeans are Mad and Turn Right

Morris Segall     

The recent European Parliament elections held this past weekend confirmed our observations in our blog and website articles, “I am Mad as Hell and I am not Going to Take it Anymore,” March 23, 2009. Voter dissatisfaction with left leaning and socialist governments and their policies handed conservative and right wing nationalist parties a clear majority in the European Parliament and unseated and inflicted major losses on sitting governments in Hungary, Ireland, Great Britain and Spain. This move to the political right is expected to have the following repercussions:

1. A move toward less free trade and globalization and more protectionist
measures to protect local businesses and local workers.

2. A move toward anti-immigration measures to protect local workers.

3. Increased divergence between Europe and the U.S. in regard to massive federal
government stimulus spending to accelerate economic recovery in the Eurozone. In our blog
posting, “Is the U.S. a Party of One, ” we called attention to the divergence of opinion
between the U.S. and Europe on this matter. The conservative electoral victories will make
this divergence even greater which will undermine the strength of the U. S. Dollar and the
attraction of U.S. Treasury debt and stall an increase in U.S. exports to Europe that would
stimulate the U.S. economy.

4. Some increased concern about the future of the European Union as more countries adopt
increased nationalistic policies and viewpoints and re-think subjugating national policy to a
European Parliament and European Union bureaucracy.

I also cannot help but see the parallels between the social and political movements in Europe today and those of Europe in the Depression of the 1930s. In the 1930s the Great Depression saw the rise of fascism as a solution to the terrible deprivation of Europe’s populations. Some of the parliamentary and national government gains over the weekend were achieved by far right wing, nationalist parties preaching anti-immigration and often bigoted platforms. The appeal to a population’s patriotism diverts attention from the real economic problems facing Europe’s governments and for which there are no easy answers and more importantly, no quick fixes.

Morris R. Segall, CFA, CIC