Austerity brings extremism: why the welfare state is the key to understanding the rise of Europe’s far right

This blog was orginally published in the Huffington post.

The recent Greek election has resulted, once again, in a coalition government between the far left Coalition of the Radical Left (SYRIZA) and the far right Independent Greeks (ANEL). What has attracted less media attention so far, however, is the striking result for the neo-Nazi Golden Dawn which increased its share of the vote from 6.28 to 6.99%, gaining 18 seats in a parliament of 300, and remaining third strongest party. This indicates that the Golden Dawn remains a considerable presence in Greek politics since its first entry in the Greek parliament in 2012. And, it is a striking result for a party that is not only extreme, violent, and espouses Nazi ideology, but is also currently on trial for maintaining a criminal organization. Only a couple of days prior to the election, the party’s leader publicly accepted “political responsibility” for the murder of left-wing activist Pavlos Fyssas.

But the rise and resilience of far right parties is not confined to Greece. While neo-Nazism is indeed a more isolated phenomenon, the far right more broadly- i.e. parties that centre their attention on nationalism and xenophobia - is becoming increasingly popular across Europe. In the 2014 European Parliament elections, four far right parties received more than 20% of the votes cast: Austria’s FPÖ, Denmark’s DF, Britain’s UKIP and the French FN. Several others received over 10% of the votes cast including the Dutch PVV, the True Finns, and Hungary’s Jobbik. A number of these parties are also faring quite well in their domestic electoral arenas, for instance the French FN in 2012, the Austrian FPÖ in 2013, and the DF in Denmark as well as UKIP in the UK in 2015.

The most popular explanation for the rise of the far right in Europe is the on-going economic crisis. This answer has both historical and theoretical appeal. Historically, the rise of Nazism in interwar Europe followed the 1929 major financial crash. Theoretically, economic crises are associated with the rise of the far right because the dispossessed are more likely to punish the mainstream and opt for extreme or anti-establishment parties.

But the crisis is, at best, only part of the story.  Unemployment rates do not correlate with levels of far right support.  While Greece, which does have high levels of unemployment and suffered greatly from the crisis, did experience the rise of the Golden Dawn, other countries that have suffered from the crisis including Spain, Portugal and Ireland have not experienced a similar rise: Spain 2000 and National Democracy (DN) have remained marginal in Spain, the same is the case for the Portuguese National Renovator Party (PNR), and there is no far right party in Ireland. On the other hand, countries that have not experienced the worst of the crisis and generally have lower levels of unemployment, such as Britain, France, and Denmark, are experiencing a rise in far right party support.  

The problem with this explanation is therefore that it is not consistent with patterns of far right party performance across Europe. This is because it is missing a crucial piece of the puzzle: welfare state policies mitigating the risks and costs that an economic crisis imposes on individuals. Ironically, it seems that welfare cuts, employed to tackle Europe’s economic crisis, are to blame for a broader political crisis, where the far right is flourishing.

In other words, austerity breeds right-wing extremism and this why: The link between an economic crisis and far right support is the labour market insecurity experienced by the middle class. When a crisis hits, those who have a job fear that they will lose it. Those who don’t have a job (or those who do lose it) fear that they will have no safety net or alternative means of subsistence. The greater the risks and costs of unemployment arising from the crisis the greater the insecurity. And in turn, the greater the insecurity, the greater the likelihood for people to punish the mainstream and reward far right parties.

One reason is that these parties pledge to limit foreigners’ access to jobs, thus appearing to be responding to increasing insecurity.  Another is that these parties’ authoritarian vision of order is appealing in a context where economic malaise is having a disorderly effect on people’s lives.  Finally, far right populist rhetoric is appealing because mainstream parties take the bulk of the blame both for the crisis itself and for inadequate policy responses to it.

The welfare state, therefore, is the key to understanding the rise of the far right as well as its varied performance across Europe: The extent of insecurity that people experience as a result of the crisis is largely determined by how protective welfare state institutions are. People fear losing their jobs less when job dismissal regulations protect them from redundancy. And those who do lose their jobs suffer less from this loss when unemployment benefits are more generous. A rise in unemployment, therefore, is morel likely to lead to far right party support when job dismissal regulations are low and unemployment benefits not generous.

This helps explain what happened in Spain and Portugal where unemployment has increased but the far right has not emerged. Both countries have high unemployment benefit replacement rates, and job dismissal regulations for those in permanent contracts are also comparatively high. By contrast, Greece and the UK, which have seen their far right party support increase, have much lower replacement rates. The UK also has one of the lowest employment protection legislations in Western Europe.

Welfare state policies are the link between economic crisis, unemployment and far right party support. Welfare cuts have increased the insecurity of the European middle classes that are being hit by the economic crisis. This matters because of the implications it has for policy. By reversing austerity, which results in welfare cuts and increases insecurity, we can limit the appeal of right-wing extremism. 

This piece is co-authored with Daphne Halikiopoulou. Daphne Halikiopoulou is Associate Professor in Comparative Politics at University of Reading. Tim Vlandas is Lecturer of Politics at University of Reading.  This piece builds on their argument in their co-authored piece Risks, Costs and Labour Markets: Explaining Far Right-Wing Party Success in European Parliament Elections forthcoming in the Journal of Common Market Studies.