Has Europe’s populist tide peaked?

A populist surge in Europe that seemed unstoppable just a short while ago appears to be floundering.

Greece’s left-wing Syriza party, which catapulted to power in January on an anti-austerity ticket, has seen its popularity fall as it tries to avert bankruptcy and last week, the U.K. Independence Party (UKIP) emerged from a general election with just one seat in parliament.

Across the Channel, France’s far-right Front National is locked in a bitter dispute between the party’s founder Jean-Marie Le Pen, and his daughter, Marine, the current leader.

In Spain meanwhile, the spectacular rise last year of the anti-austerity Podemos party has been stalled in 2015 by allegations of corruption, the country’s economic recovery and the emergence of a new party called Ciudadanos or “Citizens.”

“These populist forces in Europe are still strong, but I don’t think they will get into a significant position in government as they have done in Greece,” Antonio Roldan Mones, an analyst at Eurasia Group, told CNBC.

“In Spain, support for Podemos is not going to continue in the same way because the economy is recovering and it is being constrained by a new party, while in France the Front National did well in last year’s European elections but is unlikely to get into government.”


The 2007-08 global financial crisis and subsequent austerity measures fuelled the rise of several populist movements in Europe and forced mainstream parties to adopt tougher stance on issues of popular concern such as immigration.

However, analysts said that now, populist parties were hindered by their lack of a coherent economic agendas and politicians that lacked experience. In addition, electoral systems, such as the U.K.’s “first past the post” may hamper smaller parties’ ability to gain representation in parliament.

“I don’t think that populist parties will have a long-lasting effect on the party system (not policy), because a) they cannot recruit their leadership from a large and experienced base and therefore often rise and fall with charismatic individuals, as well as disappoint when included in government (as seen in Germany, Austria). Also, b) established parties adapt their strategies to recapture voters (as seen in U.K.) and c) the electoral system makes it difficult to succeed (e.g. first pass the post in the U.K.),” said Mareike Kleine, associate professor of European Union and international politics at the LSE European Institute.

In the U.K. system, the candidate with most votes in a constituency wins—and all other votes in that area count for nothing. This meant that after last week’s election, UKIP holds just one seat, despite receiving almost 4 million votes and fielding candidates who came second in a number of constituencies.

Elsewhere in Europe, Italy’s Five-Star Movement, led by comedian Beppe Grillo, has faded, despite gaining considerable traction two years ago. In Germany, Pegida, a populist anti-“Islamisation” movement, was thrown into disorder in January after its leader quit after it was found that he had photographed himself posing as Hitler.


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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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