Stuart Gardner is a consultant at Bell Pottinger, and previously worked as a parliamentary staffer.
Brexit and Donald Trump have occupied the headlines of late, allowing the political earthquake in Lithuania at the end of October to pass relatively unnoticed.
Lithuania joined the European Union in 2004, and its population has since shrunk by more than 10 per cent, from 3.3 million to less than 2.9 million today. It is estimated that during that period 370,000 workers have relocated within the EU to benefit from higher wage levels and greater professional opportunities. The long-term structural problems caused by emigration are already beginning to have serious political repercussions.
In the country’s October elections, the Peasants and Greens, an obscure protest party led by a charismatic billionaire, won nearly 40 per cent of the seats to become the largest party in parliament. Having stood on an anti-emigration platform, their total seats soared from a measly one (in 2012) to 54 of the total 141 seats, whilst the Social Democrats slipped from first to third place. The Peasants and Greens is a populist party made up of an unusual grouping of farmers and environmentalists that leans to the left on economic issues and to the right on social issues.
Lithuania may only be a small nation on the edge of Europe, but the fact that dissatisfaction with freedom of movement played such a prominent role in overthrowing the political establishment should have alarm bells ringing in Berlin and Paris. Not only are voters protesting against high levels of immigration, but others are now making their voice heard about the damage being done to economies by mass emigration.
The other Baltic States are also having to deal with the same phenomenon. In 1991, before the fall of the Soviet Union, Latvia had a population of 2.7 million. Today, it has shrunk to 1.9 million and by 2060 it is projected to be just 1.4 million. Someone who was born in Latvia in 1990 is projected to see their country’s population essentially halve during their lifetime. In Estonia, the population has dropped by nearly 20 per cent since the fall of the Berlin wall.
Falling populations are not isolated to small countries on the fringes of Europe. Within the EU Portugal, Italy, Poland, Spain, Hungary, Croatia, Bulgaria, Greece and Romania are also having to battle to fund increasingly expensive healthcare and pension systems with shrinking workforces. Losing the young and talented has long term consequences for the economies and education systems migrants leave behind. “Brain drain” leads to skills shortages, which inhibit economic growth and further exacerbate emigration problems. When the moral case is made for high levels of immigration by those on the left of politics, the negative impact of mass emigration on the countries left behind always seems to be forgotten.
How the EU’s three remaining principal financers (Germany, France and Italy) plan on answering the long-term economic challenge posed by mass emigration is unclear, especially in light of the growing political volatility across the Western world. The usual response would be deepening political and economic ties, but this is not realistic in the current political climate. It is perfectly conceivable that by this time next year the youthful Prime Minister of Canada, Justin Trudeau, will be the longest-serving leader of any of the six largest Western economies, having been in office for just one year.
Next week, Matteo Renzi, the Italian Prime Minister, faces a referendum on the size and powers of the Senate and has committed to resigning if he loses, which he looks set to at the moment. France’s President, Francois Hollande, is so unpopular he may not even make it on to the ballot and the anti-immigration, anti-EU National Front are almost certain to top the first round of voting in the country’s presidential elections. In addition, the Eurosceptic, anti-immigration Freedom parties in Austria and the Netherlands are both leading in the polls in advance of their national elections in December and March respectively.
The German Chancellor, Angela Merkel, may feel she needs to offer concessions on freedom of movement to pour cold water on the burgeoning populist movements across the EU. Domestically, she also faces growing pressure from the right-wing, Eurosceptic AfD as welfare tourism has become a significant political issue in Germany. Merkel must face her electorate by October, and will be desperate to maintain her majority in the Bundestag. In this context, it is important to remember that it was principally electoral pressure from UKIP, a fringe party, in advance of the last general election which directly led to the Conservative Party promising to hold an in-out referendum on the UK’s membership of the EU.
Brexit negotiations will only meaningfully begin once the German elections have taken place in the autumn. Merkel’s recent concession that she may be open to “discussing further” freedom of movement could strengthen the UK’s negotiating position significantly as this has been cited as a “red line” by both sides. The German Chancellor is notoriously difficult to read though.
What is clear is that the policy of unchecked immigration and emigration within the EU is ending political careers. Electorates have lost patience with the “progressive” ideals and patronising rhetoric espoused by the “establishment” which bears little resemblance to reality. EU leaders should have learnt from their miscalculations over Brexit when their intransigence and complacency throughout David Cameron’s renegotiation arguably cost him victory. They are now faced with the reality of Trump and Brexit.
If Europe’s remaining political establishment continue to ignore the warning signs only they can be blamed for the rise of populist movements which threaten the very existence of the EU they hold so dear.