Extremist Tide Poses Growing Threat to Europe, Katainen Says

Finnish Prime Minister Jyrki Katainen urged voters to embrace more moderate policies as he cautioned against the threat to Europe posed by a surge in extremists bent on splitting the euro area.

Katainen asked voters to leave “anti-euro thinking aside,” in a Nov. 21 interview in Helsinki. “Times have been tough for quite a while and that’s showing for the political groups who have been there to clean up the mess.”

Katainen’s comments underline the political frailty on which Europe’s union rests as parties associated with fiscal restraint are punished by voters while groups promising more spending and tighter borders enjoy increasing popularity. The European Union now faces a rise in anti-euro parties in parliamentary elections in May.

“It’s clear that these left-wing and right-wing populist movements will gain support,” Katainen said. “But I don’t think it will change the entire Europe.”

Since Europe’s debt crisis started four years ago, discontent has spread after taxpayers contributed to five bailouts and endured austerity policies only to see the economy of the 17-nation euro area shrink 0.4 percent this year. Growth will be 1.1 percent in 2014, less than half the projected 2.6 percent pace in the U.S., the European Commission estimates.

Austerity Backlash

Europe’s economic pain has helped parties in the worst-hit nations gain support. Greece’s Syriza, a group that demands an end to austerity and more lenient bailout terms, is the country’s biggest opposition party.

“A big part of this is that people don’t like bailouts, no one likes them,” Katainen said. “That creates room for populist movements to grow.”

Nations that avoided bailouts and contributed to rescues are also witnessing a rise in anti-EU sentiment. Geert Wilders’ Party for Freedom in the Netherlands has capitalized on bailout fatigue, as has Timo Soini’s “The Finns” party, which enjoys almost as much support as Katainen’s ruling National Coalition Party.

Two recessions in four years, mounting job cuts and the fifth consecutive year of budget deficits have depleted Finns’ willingness to pitch in for euro peers and provided ground for discontent that’s showing in the polls. Finland was the only euro member to negotiate collateral in exchange for its contribution to Greece’s second bailout and Spain’s bank rescue.

Le Pen

In France, Europe’s biggest economy after Germany, anti-euro sentiment is also rising. The National Front would win the most votes in European Parliament elections in May, according to an Oct. 9 Ifop poll for Le Nouvel Observateur. The group, led by Marine Le Pen, stands to gain 24 percent support, according to the poll.

Le Pen says she’s working with Austria’s Freedom Party, the anti-immigration Sweden Democrats, Vlaams Belang in Belgium, and Wilders in the Netherlands to create an anti-EU bloc in the new parliament.

Identifying euro-skeptic parties as racist or right-wing is “political tactics” against parties who are “challenging the establishment,” Soini said in an interview in Helsinki on Nov. 11. “In every country, the elite and old established parties, they put that kind of label on every newcomer.”

“The Finns” party, which tripled its support in Finland’s 2011 general election, also stands to boost its backing in Europe’s legislature, according to a YLE poll on Nov. 20. With 17 percent, it still trails Katainen’s National Coalition Party, which had 22.7 percent of votes, according to the poll.

The development could also be a reflection of more people turning to the polls to vent their frustration, Katainen said.

“It may also be that people who didn’t use to vote or didn’t care about Europe are now starting to care enough to give a vote to these no-movements,” he said.

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