Tuesday, 19 September 2006

Europe's Left Falling?

It's interesting that there seem to be simultaneous blows to Europe's left happening right now. Sunday's election in Sweden saw that country's conservative coalition claim an unbelievably narrow victory over the social democrats. The coalition has been running on a platform of tax cuts and drastic alterations to Sweden's cherished social model. This historically hasn't been a popular platform, as Swedes enjoy the highest quality of life in the world due to their generous social policies. Poverty is virtually non-existent, everyone has quality healthcare.

It was only by softening his party's stance that Fredrik Reinfeldt, the 41-year-old leader of the Moderate Party, who will become prime minister, was able to win Sunday. He ran on a platform of tax cuts and other pro-business incentives, but pledged to tweak, not uproot, the Swedish welfare system. His premise is that high taxes in Sweden discourage entrepreneurship and wealth accumulation. To fund the tax cuts, Reinfeldt is going to send Sweden on the most massive sell-off in its history, privatizing a host of now government-controlled companies including Nordea, a major bank; TeliaSonera, the largest phone company; OMX, the stock exchange operator; and SAS, a Swedish airline.

But there's a limit to how much Swedes will accept. My understanding is that it was mostly young people who voted for change, but they may change their tune if they start to see anything more than minor changes to the benefits they receive by being a Swedish citizen.

A right-leaning party winning an election in a Scandinavian country is a big deal and mirrors similar developments in Denmark. Granted, this party is only "right-leaning" by Scandinavian standards. In the US they would be more left than Ted Kennedy. The thought is that this win could bolster the prospects for other right-leaning parties across Europe, and most notably the Conservatives in Britain and France's interior minister, Nicolas Sarkozy. But analysts are also pointing out that a fine-tuning of the Scandinavian system, which has been admired across Europe for its ability to combine business success with a generous social welfare system, could just make this sort of model more appealing and actually boost the prospects of leftist parties. Of course, this could just be wishful thinking from the left.

The left has other worries to deal with from what's happening in Hungary right now. To sum it up, an audio recording has been released in which Hungarian premier Ferenc Gyurcsany admits to a group of prime minsters that he lied before the April elections there about the state of the economy in order to be reelected. Following the release of the tape, there have been massive protests and rioting in Budapest, and rioters took over the state TV agency last night. My friend Endre just moved to Budapest and actually lives pretty close to the state TV building, he says it's crazy there right now. And there's more rioting expected tonight.

So why is this bad news for the left? Because Gyurcsany's Socialist party was the first to win election in Eastern Europe since the fall of communism. If Gyurcsany resigns, as the mob is calling on him to do, the rightist party will swoop in and it will be back to the status quo for Hungary. Polls are showing Hungarians evenly split about whether or not they want him to resign, and so far he is refusing to do so. The details of this are all still pretty murky though, no one really knows what exactly he lied about or what state the economy is actually in. But no matter that, this is bad news for Eastern Europe's left.

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