Is the Euroskeptics’ boon, investors’ bane?

Is the Euroskeptics’ boon, investors’ bane?

The formation of ‘Europe of Nations and Freedoms’, another anti-EU bloc in the European Parliament, will give Euroskeptics a stronger voice at the supranational level. However, doubts remain on the stability and impact of the cobbled-together group.

Last Tuesday, far-right leaders Marine le Pen (French, Front National) and Geert Wilders (Dutch, Freedom Party) announced the creation of their new ‘Europe of Nations and Freedoms’ (ENF) political grouping in the European Parliament.

With ENF, the European Parliament now has two groups with a direct euroskeptic and anti-immigration message; the other being the Europe of Freedom and Direct Democracy (EFDD) led by Britain’s UKIP and Italy’s Five Star movement. ENF will be led by Marine le Pen and the Freedom Party’s Marcel de Graaff. It will be somewhat smaller than the original alliance, with 37 MEPs as opposed to EFDD’s 46.

To form a political group, the rules of the European Parliament (EP) require that it has at least 25 MEPs, with members hailing from at least seven different EU countries.

Stronger voice of Euroscepticism

The core of the ENF is formed by MEPs from France’s Front National (“National Front”), the Dutch Partij voor de Vrijheid (“Freedom Party”), Italy’s Lega Nord (“League of the North”), Austria’s FPÖ (“Freedom of Austria”), and Belgium’s Vlaams Belang (“Flemish Interest”).

In addition, former UKIP-member Janice Atkinson (who was expelled from UKIP but allowed to remain part of the EFDD group) and two dissidents of Poland’s Kongres Nowej Prawicy (“Congress of the New Right”) have joined, thus passing the crucial threshold of seven nationalities. All parties share a nationalist, anti-EU and anti-immigration outlook and want to return more powers to the national level.

Membership of a political group brings several advantages. First, the group will qualify for more support from the EP’s independent staff and, crucially, more funding. Over the next four years it may apply for up to €17.5 million of EU funds, which can be used to set up and run the new group as well as a linked political foundation or think tank.

In addition, the body’s leaders will join Parliament’s Conference of Presidents, where the agenda of the elected supranational legislature is determined. Members will also get more speaking time during the European Parliament’s main or plenary sessions.

Moreover, the ENF will be better positioned to receive chairmanships of key Parliamentary committees, as these powerful posts are allocated between parties according to the size of political groupings. It will take a while for the ENF to fully reap the benefits, as positions for the current European Parliament have already been filled. But it is nonetheless a major accomplishment.

Practical impact on Parliamentary work remains to be seen

How successful ENF will be in influencing the work of the Parliament remains to be seen. Apart from its small size (37 out of 751 total MEPs), there are factors at play that may lead to a premature breakup and underline the fragility of the eurosketpics.

Firstly, although all may be populist, the parties are divided on a number of socio-cultural issues. LGBT rights and abortion are two examples on which the more conservative MEPs from the Front National and the Eastern European parties fundamentally disagree with their counterparts in the PVV and Vlaams Belang.

Another potent divisive issue is the stance towards Israel and the Jewish and Muslim communities. Whereas the FPÖ and Vlaams Belang are regularly accused of anti-Semitism,  the Front National has been trying hard to get rid of its anti-Semitist image, and the (anti-Islam) PVV is known for its staunch defence of both Europe’s ‘Judeo-Christian heritage’ and Israel.

The difficulties associated with glossing over such differences explain why it has taken almost a year to form the pan-European group. And while these disagreements need not be played out in Parliament, they can expose the more liberal parties to attacks from their domestic press. This is one of the reasons UKIP’s Nigel Farage did not want Front National to join his group when he set up the EFDD.

Secondly, a scandal may be brewing at the hand of none other than Vladimir Putin. Russia has started a full-scale charm offensive to win the friendship of Europe’s euroskeptic far-right and has been found extending loans to a number of the ENF’s member parties. Thus far, this seems to be succeeding: all ENF members have a common pro-Russian stance. The suspicion that Russia may thus be buying support of the Eurosceptics for its policies in Crimea and against the West more generally may damage the credibility of the grouping.

Reputational cost to the EU’s investment climate will have been inflicted

Whether the grouping will become a permanent feature of the European Parliamentary landscape or not remains to be seen. ENF will, however, be viewed by foreign investors as another indicator that Europe has become increasingly inward-looking since the outbreak of the financial crisis. As such, the mere creation of this group within the EU’s largest democratic institution imposes a reputational cost on the investment climate in the European Union as a whole.

ENF’s repeated rhetoric about fighting “Islamization” and curbing immigration risks souring trade and investor relations with neighbouring Muslim countries, as it takes place on the Union’s main democratic forum.

Moreover, if allowed to persist without being forcefully countered, investors may take such anti-globalisation talk as a signal that they should look elsewhere for investment opportunities, at least until the xenophobic tide passes. The fact that the group’s leader Le Pen has called for a return to protectionism emphasizes these worries.

The Eurosceptic paradox

Paradoxically, by voicing concerns shared by a large section of the electorate that has felt underrepresented, the creation of the Eurosceptic ENF may in some ways actually increase the democratic legitimacy of the EU.

But while Geert Wilders, leader of the Freedom Party, has hailed the ENF’s formation as “the beginning of our liberation, our D-Day”, the extent of its influence on Parliamentary work remains to be seen. Much will depend on whether the bloc can keep together, despite their differences on a number of sensitive issues. And if it comes to be seen as another instrument in Putin’s toolbox aimed at dividing the EU, its credibility will undoubtedly suffer.

Categories: Europe, Politics

About Author

Niels Van Wanrooij

Niels van Wanrooij is a public sector consultant with experience in international policy at the Dutch Parliament and in advocacy with an NGO. He holds an MSc. in International Political Economy from LSE along with a MSc. in International Relations and BSc. in Political Science from the Radboud University in the Netherlands.