Far Right Could Exploit EU's Economic Slump To Win Big In June Vote

Soaring food costs, economic stagnation and deteriorating living standards risk pushing voters into the far right's arms in European elections later this year, which could shake up the political agenda in Brussels.

EU citizens are reeling from multiple crises.

Just as the European Union's economy was recovering from the coronavirus pandemic, Moscow invaded Ukraine in 2022, forcing Europe to search for new energy sources.

That scramble led to higher gas and electricity prices, hurting households and businesses.

Amid the cost-of-living crisis, Europe's far right has prospered, with the 2022 victory of Italy's Giorgia Meloni, then Geert Wilders in the Netherlands last year.

"There is a correlation between the rise in populist forces and the economic and financial crises," said Thierry Chopin, political scientist at think tank Jacques Delors Institute.

"The radical right today significantly exploits the feeling of impoverishment" and the "very strong pessimism" among voters, Chopin said.

Inflation is falling, however, which gives European politicians hope that the EU economy will improve after more than a year of zero growth.

But the improvements will only start to be visible after the summer, not in time for the EU-wide elections on June 6-9.

Nearly three in four Europeans believe their standard of living will fall this year, while almost one in two say it has already deteriorated, according to the European Parliament's Eurobarometer survey published in December.

Some 37 percent of the participants said they faced difficulty paying their bills.

Factory closures are rising in the car industry, especially in Germany.

Between November and January, car parts manufacturer Bosch said it was cutting 2,700 jobs, while ZF closed a site employing 700 people and Continental said it would be eliminating thousands of administrative jobs.

"German industry is heavily affected by high energy prices and is suffering from the electric transition in the automobile industry, currently we do not see a turnaround in order books," said Charlotte de Montpellier, an ING bank economist.

Germany has been in recession since last year and the pain felt in the EU's biggest economy affects the whole of Europe.

Spending remains weak because of elevated prices.

Record-high interest rates by the European Central Bank to tame inflation are hurting investment and causing real estate markets to stumble. Meanwhile, international trade, weighed down by a slowing China, is unable to compensate for weak domestic demand.

"The eurozone economy stagnated in (the fourth quarter) and we think that it will flatline in the first half of this year too as the effects of past monetary tightening continue to feed through and fiscal policy becomes more restrictive," said Jack Allen-Reynolds of Capital Economics.

The EU's 27 member states are also constrained by the bloc's rules on public spending.

For example, France reinstated an electricity tax in February, pushing prices up by nearly 10 percent.

"Austerity risks pushing an extremely large part of our citizens into the arms of the far right because they feel abandoned," warned EU lawmaker Philippe Lamberts.

Several surveys show a strong surge in far right parties that belong to the Identity and Democracy (ID) group, which includes France's National Rally led by Marine Le Pen, Germany's AfD party, Belgium's Vlaams Belang and Austria's FPO.

The ID group could become the third-largest in the European Parliament, overtaking the liberal Renew group which is neck and neck with another radical right group on the rise, the European Conservatives and Reformists (ECR).

The ECR includes Meloni's party and groups from Poland and Spain.

The "grand coalition" that brings together the EPP conservatives, social democrats and Renew "should remain in the majority in the European Parliament but it will undoubtedly be weakened", expert Chopin said.

A study by think tank European Council on Foreign Relations said the coalition could win 54 percent of seats this year, compared with the 60 percent it currently holds.

The far right is already exerting pressure on EU institutions, for example, by supporting the farmers' revolt in the past few weeks.

If it emerges stronger from the June vote, the far right will likely push a tougher migration policy and make adopting legislation in certain areas, especially the environment, even more difficult.

The extreme right would also move to block increased integration in the EU.