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reflections

Feb 5, 2013 | 03:31 GMT

4 mins read

Corruption Claims Weaken the European Elite

(Stratfor)
It can be difficult to separate the important from unimportant on any given day. Reflections mean to do exactly that — by thinking about what happened today, we can consider what might happen tomorrow.

Claims of corruption in Spain and Italy have confirmed a crisis of representation in the European Union, where the stability of the political elite is in jeopardy. Monday's statement by Spanish Prime Minister Mariano Rajoy denying his government's participation in a corruption network recently denounced by Spanish media is the latest development in a series of scandals in Spain and Italy. These events highlight a deep political aspect of the European crisis: Under the severe economic crisis, popular support for the traditional political elite is weakening, and anti-establishment sentiment and opposition to austerity is increasing. In turn, fringe parties on either end of the political spectrum are gaining ground. 

What is a Geopolitical Diary? George Friedman explains.

In most eurozone countries, the traditional political parties are losing popularity because of their inability to offer alternative responses to the crisis. To some extent, the governments of all the countries in the region have agreed with the European Union to implement austerity measures, which in most cases have contributed to a slowdown in economic activity. Even in those countries where governments fell because of the crisis, the new administrations continued applying the economic guidelines suggested — and sometimes pushed — by Brussels. 

This situation has spurred growing support for political parties that previously were on the margins of the system. These parties combine anti-austerity rhetoric with negative criticism of the traditional elite and claim to represent the interests of the "real" people as opposed to the interests of the ruling parties. In some countries these parties are from the left, but in most cases — with Greece being the most notable example — Europe has seen the growth of far-right movements that not only reject Brussels' economic policies but also the European integration process itself and the free movement of people among EU countries. This crisis of representation was worsened in recent days by two notable scandals in Spain and Italy.

In Spain, the ruling Popular Party has been accused of being part of a corruption network in which private companies bribed political leaders at the local, regional and maybe even national levels. These accusations, which are being spread by major Spanish newspapers, are weakening popular support for the Rajoy government. Rajoy came to power just over a year ago after former Prime Minister Jose Luis Rodriguez Zapatero called for early elections in the context of a deepening economic crisis.

In Italy, an investigation regarding an opaque series of measures to hide losses at the third-largest bank in the country — the Monte Dei Paschi di Siena — is similarly hurting the local political elite. The scandal affects the popularity of Italy's Democratic Party, which is best positioned to win general elections in February; of technocratic Prime Minister Mario Monti, who authorized a bailout for the bank; and of European Central Bank President Mario Draghi, who was the head of the Bank of Italy when some of the controversial operations of the Monte dei Paschi di Siena occurred. 

The situation in Spain and Italy is particularly significant because of the countries' position at the core of the crisis and their governments' close relationship with Brussels. Monti and Rajoy came to power within weeks of each other in late 2011, both replacing governments forced to resign prematurely by pressure from international markets and the European Union. Both new governments promised to correct the political and administrative mistakes of their predecessors, and both received strong political and financial support from Brussels, which brought temporary calm to the markets.

In the past year, the popularity of both prime ministers was severely weakened by general dissatisfaction with all the traditional parties and the growth of anti-establishment parties (such as leftist and secessionist parties in Spain, and populist or anti-system movements in Italy).

Even if the governments in Spain and Italy don't end up being directly involved in the corruption investigations that have shaken their countries, these scandals occur at a time when countries along the European periphery are facing severe recessions and record-high unemployment, especially for youth. Corruption charges only increase the rejection of austerity measures, reinforce the popular distrust of traditional parties and strengthen the anti-establishment narrative of the extremist parties, thus deepening the crisis of representation in Europe.

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