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The illuminated euro sign is seen in front of the headquarters of the European Central Bank. (KAI PFAFFENBACH/REUTERS)
The illuminated euro sign is seen in front of the headquarters of the European Central Bank. (KAI PFAFFENBACH/REUTERS)

Can the Euro last? Add to ...

Beppe Grillo, the ex-comedian leader of Italy’s popular Five Star Movement (M5S), was in fine form in late January when I heard him treat Rome’s foreign press to a three-hour rant that was both rousing and annoying. Rousing because his calls to throw out the “cheats and hypocrites”—Italy’s parliamentarians—made him a media treat; annoying because M5S, born in 2009, seems stuck in perennial protest-party mode. Grillo has been giving Italians an earful of what is wrong with their country at 130 decibels since the late 1980s, but he has few real answers on how to fix the corrupt system he decries.

Still, there is no doubt that Grillo—who is Italy’s top blogger—and his ragtag team of wannabe revolutionaries are a formidable political force. In the 2013 general election, M5S won 26% of the vote and entered parliament as the biggest party. It could have been in power if it had agreed to form a coalition with established centre-right and centre-left parties. There is no doubt that M5S will also do well in May’s European Parliament elections.

And that’s the point. M5S will have great influence beyond Italy’s borders, and it’s not alone. This year, more than ever, an eccentric array of populist parties—some dynamic and magnetic, others ridiculous and scary—look set to enter the European Parliament. Others that already have footholds in the parliament may greatly boost their presence. Various polls suggest that these parties, many of which fall broadly into the euro-skeptic category, could win up to a quarter of the European Parliament seats, double their presence today.

It is impossible to neatly define these parties using simplistic “left” and “right” labels, but there is no doubt the election will reshape the European political and economic debate. Disillusionment with the 28-country European Union, and the 18 countries that share the euro as their currency, is near an all-time high. EU president Herman Van Rompuy has said that he worries that Europe’s entire foundation will be blown away by the “winds of populism,” as if populism had suddenly become a lethal force.

The trouble is that European integration simply has not lived up to its utopian billing. The EU-wide jobless rate is 10.9%. It is 12.1% in the euro zone countries, the highest since the common currency was launched 15 years ago. Free movement of people within the EU has triggered anti-immigration crusades everywhere and given rise to some toxic parties, such as Greece’s violent, neo-Nazi Golden Dawn (a potential European Parliament newcomer). Many Europeans resent the austerity imposed on them to pay for bank bailouts. Now, with government debt rising, national budget deficits still swollen and no compelling growth policies, there aren’t enough financial resources to keep social safety nets intact.

Given the bleak backdrop, it’s no surprise that the mainstream parties that wholly backed European integration face formidable competition. The surging populist parties are variously labelled as nationalist, right-wing and anti-immigrant, but little unites them politically or philosophically. For the most part, they are critical of the EU and the sovereignty-robbing common currency, the euro, which cannot be devalued by individual countries. Yet they cannot be described as revolutionary or anarchist. Many believe in entitlements and higher state spending. Parties like France’s rightist Front National just want that spending to favour their own countries’ citizens, not the immigrants whom it considers barbarians at the gate.

Grillo’s M5S is often labelled anti-euro. That’s a stretch; it merely favours a referendum on euro membership. The Front National, led by Marine Le Pen, daughter of the old xenophobic warhorse Jean-Marie Le Pen, is actually to the left of France’s ruling Socialist Party in some ways—the Front favours higher welfare spending and economic protectionism. Britain’s UK Independence Party, led by the subversive and droll Nigel Farage, is fiercely anti-Europe, libertarian and pro-business, a platform that won it 13 seats in the European Parliament in 2009. The Finns Party, Finland’s biggest opposition party, with one seat in the parliament, runs on a euro-skeptic platform, but holds rather orthodox economic and social views.

It’s hard to say exactly when the warm and fuzzy feeling toward the EU and euro gave way to cynicism and pessimism. You might guess that it started with the debt crisis—thank you, Greece—in 2009, but broad support for bold integration moves actually stalled years earlier.

Today, voters seem to have little appetite for even prosaic goals, like the banking union, or common health care and education standards. The rise of the populist parties is bound to keep European integration in check. The question is whether the voters will actually reverse it without giving some thought to the economic consequences of dismantling the world’s largest trading bloc.

Follow on Twitter: @ereguly

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