Voters everywhere are fed up – and that’s bad news for investors

Angela Merkel © Getty images
Angela Merkel won on the night, but she knows the voters aren’t happy

Prime Minister Theresa May’s Brexit speech in Florence on Friday was like pretty much everything else about her government so far – disappointing and light on content.

But then, we should have learned by now not to expect too much. Governments have grown used to looking to the electorate (or the front pages, at least) for guidance. They never give us what we want – but they do like to know which particular lies they should be telling.

Today, no such guidance is forthcoming. May governs an electorate that is divided and grouchy. There’s probably only one thing that the British people agree on right now. We don’t know what we want. But we do know that this isn’t it.

It’s little wonder that this confusion is reflected in government policy. Or lack of it.

May’s one consolation is that pretty much everywhere else in Europe is exactly the same.

As German chancellor Angela Merkel has just discovered.

Britain is far from being the only country with political problems

Reading through the post-Brexit papers, it’s easy to get the impression that Britain is uniquely politically challenged.

We’re the useless numpties with a lame duck government, a struggling economy (where unemployment just happens to be at a 42-year low), rising inflation (which every other central bank in the world is actively trying to achieve), and a hideously intolerant underbelly of (whisper it) dreadful lower-class people who voted to leave the EU, while at the same time coining it in by churning out fake food poisoning claims against innocent Spanish hotel operators. The irony!

The reality, of course, is that everywhere else in Europe (and the world, for that matter) is undergoing a similar political upheaval.

Take yesterday’s German elections. They were meant to be the most boring in Europe, and that was seen as a good thing. And really, they were pretty boring by recent standards. Angela Merkel is coming back into her fourth term as chancellor.

However, no election these days is complete without a populist upsurge. In this case, Germany saw a far-right party – Alternative für Deutschland (AfD) – gain seats in the Bundestag for the first time since the war.

Now, I don’t know enough about German politics to give you an informed view of the AfD and its policies. The point is, they weren’t expected to get this level of support, and on a more general level, a swing by some voters to both far-left and far-right parties means that Merkel’s CDU suffered its worst result since 1949.

As a result, she’ll be tied up forming a coalition between now and the end of the year. That rather throws a spanner in the works of the idea that she and Emmanuel Macron in France are going to join forces to drive the European project forward now that Britain has finally chosen to leave.

What’s interesting is that – again – this is happening against a sunny economic backdrop. Germany has not fared at all badly since the financial crisis. Like Britain, unemployment is at multi-decade lows, and unlike Britain, Germany’s national debt is at manageable levels and it’s also running a chunky budget surplus – in other words, the government spends less than it receives in taxes (helped by the weak euro – let’s hear a big “Danke” for Italy and Greece!). And that’s not to mention the fact that interest rates are so low that even stolid, thrifty Germany is now having a property boom.

I don’t know what the German is for: “You’ve never had it so good”. But even if it’s not true right now, it can’t be far off it.

Voters don’t know what they want, but they don’t want this

Electorates are miserable everywhere else too. On the topic of Macron – another populist upstart, although one from a different political lineage to Marine Le Pen – he’s been seen as France’s great reformist hope. But nobody likes him.

We often hear about US president Donald Trump’s historically low approval ratings. Macron has exactly the same problem. In August, notes the New Statesman, his approval ratings hit “an all-time low for any modern president’s first 100 days”. That’s worse than François Hollande, the man who finally managed to make adultery look tawdry even in France.

Macron’s approval ratings have picked up a little since, but yesterday he took a battering in Senate elections.

Then there’s Spain. Right now, the Spanish government in Madrid is taking some pretty heavy-handed measures to prevent what it describes as an “illegal independence referendum” taking place in Catalonia on 1 October. I’m struggling to think of a better way to encourage people to vote for independence, and I’m coming up blank.

And of course, Italy, widely viewed – maybe rightly, maybe wrongly – as the weakest link in the eurozone. It’s like Greece with clout – an economy with terminal structural problems, and a desire to slip the shackles of the euro without paying the massive price in terms of lost purchasing power that a return to the lire would entail. The battle between those conflicting interests will be played out in a general election sometime between now and May 2018.

In short, no one’s happy. And no one really knows why.

Be prepared for a hostile new era

My gut feeling remains that people just generally feel insecure. The global financial crash rattled faith in everything from capitalism to politics to the nature of money itself. And no one really got the blame for that.

So it’s hard for people to go back to a mental framework of “business as usual”. Particularly as the main culprit for much of the sense of instability – historically low interest rates and radical monetary policy – are still firmly in place.

But politicians aren’t about to take on central bankers. There aren’t many votes in that because most people barely understand their role in all this. Instead, politicians can only pander to the biggest special interest groups, whoever they may be. They also need to be seen to be doing something. Anything.

So expect attacks on popular targets. The wealthy. Big corporations. Free flows of both capital and labour.

This can happen gently – a slowing of the pace of globalisation, until everyone feels that they are back in control. Or it can happen more drastically – a reversal of globalisation and far more draconian rules on capital controls and labour movement and taxation.

However it goes, it’s worth being mentally prepared for a new era in which governments are more hostile towards private wealth.

  • DiggerUK

    Over the past five or seven years much has been written about the ‘squeezed middle class’…..and I’m supposed to feel sorry!
    The bled dry working class blue collars, who’s lower affluence has kept the ‘squeezed’ better off for nigh on thirty years, are a bit pissed off, and are reacting in ways that do mightily tickle the ‘squeezeds’ catastrophe. The mob have started to vote… ways that should alarm many.
    Yesterday, in Germany, something rhymed…_

    • Tawse

      Large parts of European cities and towns now look more like Afghanistan, Pakistan or some other Middle Eastern country – it is that simple why people voted the way they did in Germany.

      Of course Europeans are fearful – they see their countries, their towns, their cities, etc, changing rapidly around them. It seems that outside of Europe that a country can be for the indigenous people but not the UK or a European country. So Saudi is for Saudis, Somalia for Somalians, etc, etc, but the British, Dutch, French, Germans, etc, etc, are not allowed to have a country for their culture, their values, their way of life.

      People have been warning about this for many years now – and warning that people will be pushed too far and that there will be a backlash. You started to see some of it with the UK BREXIT vote and you are now seeing it go one step further in Germany with millions of Germans voting for the AFD.

      I fear for the future of Europe – for the openness, tolerance, equality and liberal values that had to be fought for and cost a great many lives.

      Bringing millions of people into Europe from the Third World, many of whom do not contribute to the economies and are often an economic drain in terms of housing, health, education and benefits, is not going to result in the big corporations benefitting – on the contrary, the indigenous populations who are working and paying taxes are just going to feel very aggrieved what only a blind man cannot see is happening all around.

      • Frank

        You are perfectly right in everything you said. But the Politicians don’t want to see it like that. I have an awful feeling this is not going to end well, sometime in the future.

        • Tawse

          It is inevitable that it will not end well.

          Across Europe we now have millions of people living on benefits whose culture is alien to European values, who have no interest in integrating and because of the free housing and benefits they get they have no incentive to integrate.

          The only thing they have an interest in, seemingly, is changing Europe to be like some of the most backward and barbaric societies on the planet.

          A friend of mine, a well-educated British Pakistani and who is increidbly proud to now be British, once told me that he and his family had escaped to the UK decades ago to embrace British values and escape what was the life back in Pakistan – he says it is madness that we have allowed in people from his birth country who have no interest in ever adopting Western values.

          A neighbour of mine is an Iraqi, who worked with the British during the Gulf War, and who is now working for the law enforcement agencies here. He also has told me that we are fools opening the doors to people who have no respect for Western values but who will take, take, take and demand, demand, demand until they turn the UK into the hell-holes from which they have come.

          I only mention this because, from an economic and business point of view, even if you can ignore the numerous cultural horrors now unfolding in the UK and across Europe, how are most of these people going to benefit the big corporations who have an endless need for profits?

          Yes, allow in skilled, educated and TOLERANT people who wish to integrate but our children, especially our daughters, deserve protection from the barbarians inside the gate who only see our compassion as weakness.

          • Charles W

            If we didn’t want Third World people coming in, why did we vote to leave the EU which means kicking out EU nationals such as Irish, Poles, Germans, French, Spanish, Italians, etc, and other Europeans who are most definitely NOT Third World in any way?

            The tragic irony is that when untold numbers of Europeans are forced to leave in droves to go back to the EU (it’s already happening (over 10,000 EU NHS workers have already left the UK), we’ll have to import more, a LOT more, Third World people into Britain to do the jobs the EU nationals had been doing.

            Will that make the bigoted, embittered, lash-out-at-the-world Nigel Farage mob happy? Somehow it’s doubtful………..

            • Tawse

              This is FUD nonsense.

              Part of the EU negotiation will be about a proper permit system put in place so that skilled Europeans can still come and work in the UK and, likewise, skilled Brits can go work in Europe. The PM has already talked about this.

              Butt perhaps we should start training up our own people – go back to real training of hands-on skills and not tens of thousands of theoretical skills via uni degrees – the world can only use so many people working in Costa or Starbucks with media studies’ degrees.

              • Charles W

                Ah, that would have been the right thing to do — in the 1970s & 80s when it became painfully obvious that UK manufacturing was dying out.

                During that era, there should’ve been a massive programme of training & education, both blue & white collar, based on the new skills required for the new economy. By now, we’d have long had a working population fit for the modern economy.

                Tragically, we didn’t do it. We failed to prepare for the future. As the EU nationals leave, who >will< work in Starbucks and Costa? Personally, I don't think this is a very sensible or stable way to run an economy, but hey, sadly that's what we allowed to happen.

          • Triple H

            Alright Mr Nick Griffin. I get it. It is the bl##dy Pakis, Iraqis whatever who have resulted in our youth going for stupid university courses (history of dance and music and similar BS). It’s their fault that our pure white progeny are only good at playing guitar at Waterloo station while those bl##dy Pakis and Iraqis and Indians become our doctors and computer engineers, often born outside this beautiful first world country, in those ‘hell holes’. It’s their fault that I will not hire a mediocre white British over a talented and highly committed ‘uncivilised barbarian’ who will leach off the public.

            Wake up and remove those bigoted specs that you keep on. Everywhere I have worked over my 15 years career in software, I have seen only one trend: “native white” people are on the way out when it comes to highly skilled roles. Yes, it is partly due to politicians (of whom favourite of people like yours Thatcher was the chief destroyer) and partly due to big companies (which people like you and MW should love as it’s all unhinged free market capitalism). But the main blame sits with the general public, who were given an impression that they’re born to rule and that good jobs will always be theirs regardless of how little they learn and show eagerness to improve.

  • anyoldirony

    You know, journalists whipping up discontent and fear for the sake of a day’s story have plenty to answer for.

  • OldCodger

    It irritates me greatly to receive a news letter which I then have to log in to another site to read the rest of it!

  • czarnajama

    “However it goes, it’s worth being mentally prepared for a new era in which governments are more hostile towards private wealth.”

    I agree that everything else is happening as you describe except the above. The awful irony is that the so-called “populist” forces are just using concern for the common citizen as a means to grab power and wealth for themselves. “Populist” Trump has created a blatantly oligarchic, even kleptocratic government. Kaczynski’s minions in Poland are following exactly the pattern of the old Communist Party in taking control of every aspect of life, and putting cronies and party functionaries in charge of everything. Hungary is far advanced on an autocratic and oligarchic path. Any hostility to private wealth is kleptocratic (i.e. resistant oligarchs lose and the compliant ones win, as so clearly demonstrated by Putin).