Must-read: Daniel Gros: “Is Globalization Really Fueling Populism?”

Must-Read: Daniel Gros: Is Globalization Really Fueling Populism?: “Amid relative economic stability, rising real wages, and low unemployment rates [in northern Europe]…

…grievances about the economic impacts of economic globalization are simply not that powerful. Instead, right-wing populist parties like the FPÖ, Finland’s True Finns, and Germany’s Alternative für Deutschland are embracing identity politics, playing on popular fears and frustrations – from ‘dangerous’ immigration to the ‘loss of sovereignty’ to the European Union – to fuel nationalist sentiment.

In the southern European countries, however, the enduring impact of the euro crisis makes populist economic arguments far more powerful. That is why it is left-wing populist parties that are winning the most support there, with promises of, say, tax credits for low-paid workers. The most extreme case is Greece’s leftist Syriza party, which rode to victory in last year’s elections on pledges to end austerity. (Once in power, of course, Syriza had to change its tune and bring its plans in line with reality.)

Calling the rise of populism in Europe a revolt by the losers of globalization is not just simplistic; it is misleading. If we are to stem the rise of potentially dangerous political forces in Europe, we need to understand what is really driving it – even if the explanation is more complex than we would like.