Politics and Fear

The Hour of Populism

petry-getty pictures
AfD head Frauke Petry is continually gaining ground in political polls.
  • Why it matters

    Why it matters

    The return of political populism in the West may signal the end of the golden age of globalization and mark a new age of fear and uncertainty.

  • Facts


    • Projections forecast Germany’s right-wing AfD party will join three state parliaments in March elections.
    • In the United States, populist presidential candidates on the right and the left are showing strength in the country’s primaries.
    • Populists have seized power, or appear primed to, in Poland, Hungary, France, Italy, Finland, Switzerland and Spain.
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Ever more Western democracies are falling prey to the allure of populism.

Neither Germany nor the United States appears immune, with fire-breathing Frauke Petry, the head of Germany’s rising right-wing Alternative for Germany party, and populist U.S. presidential candidate Donald Trump intent on pitting “us” against “them” – with our wellbeing hanging in the balance.

The dangerous trend has not been lost on Angela Merkel.

When the German chancellor took the podium at the Queen Elizabeth Centre for this week’s Syrian donor conference in London, it seemed like any other international appearance. But under the surface something clearly was awry. Wrapped in her pink blazer, Ms. Merkel visibly struggled to put on her happy face.

“This can be a day of hope,” the chancellor optimistically offered, pointing to the event’s humanitarian contribution. Her own largesse was on full display, as she pledged €2.3 billion, or $3 billion, in aid for Syrian war refugees – the largest pledge of the conference. Almost half of it will be spent this year alone.

Half the world bestowed Ms. Merkel with admiration for her wellspring of generosity and strong leadership.

Most of Germany belongs to the other half.

According to German public broadcaster ARD’s latest poll, the chancellor has shed 12 percentage points – eroding her approval rating to just 46 percent.

Back home, colleagues in Ms. Merkel’s Christian Democratic Union, and its Bavarian affiliate, the Christian Social Union, are at their wit’s end. Her approval ratings are plummeting. According to German public broadcaster ARD’s latest poll, the chancellor has shed 12 percentage points – eroding her approval rating to just 46 percent. Her foreign minister, Frank-Walter Steinmeier, and finance minister, Wolfgang Schäuble, leapfrogged her with favorable ratings of 70 percent and 64 percent, respectively.

What’s worse, from Ms. Merkel’s perspective, is that 81 percent of Germans polled said they believe the government no longer has the refugee situation under control – which is essentially a vote of no confidence for the chancellor. All this might still be palatable, were it not for the simultaneous surge in popularity for Ms. Petry’s AfD.

Since Chancellor Merkel opened Germany’s borders to an unprecedented exodus of asylum seekers in September, Ms. Petry’s right-wing party has continually gained ground in opinion polls. No long ago, AfD was a mere fringe party that could only dream of actual political power. Now polls rank it as Germany’s third most popular party, with 12 percent. That trails only Ms. Merkel’s Christian Democrats, at 35 percent, and her junior coalition partner, the center-left Social Democratic Party, at 24 percent.

All current projections foresee the AfD joining three more state parliaments in March when the western German states of Baden-Württemberg and Rhineland-Palatinate and Saxony Anhalt in former East Germany hold elections.

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Roaring ahead: Poland’s Victor Orbán, Britain’s Nigel farage, Poland’s Jaroslaw Kaczynski and France’s Marine Le Pen. Source: [ M ] AP Photo/Francois Mori, dpa Picture-Alliance / Nigel Roddis dpa – Bildfunk, reuters


Germany’s political balance of power is shifting at a breath-taking tempo. The country is increasingly open to the AfD’s nationalist and authoritarian overtures. Skepticism of the political establishment grows by the day.

And this is happening in Germany, of all countries, an island of economic stability in a sea of uncertainty. No radical right-wing party has seized parliamentary power in the 70 years since the collapse of National Socialism at the end of World War II – during which time the radical right has thrived in the parliaments of several neighboring countries.

While the AfD has yet to govern in any capacity, it has exerted its influence on German politics. Since last week, there are growing signs that Germany is subtly backtracking on its open-door asylum policy. Syrian refugees must now return home once the civil war is over, Ms. Merkel said.

To ensure that actually happens, Germany is to become as unattractive as possible for new arrivals, including those who already have crossed its borders and those considering embarking upon the journey.

The new political approach became especially clear when Ms. Merkel’s cabinet on Wednesday approved a legislative package aimed at stemming the flow in asylum seekers into Germany. A key part of the draft would create special offices to expedite the applications of refugees without much chance to stay.

Another element would restrict the rights of some refugee groups to have their families back home join them in asylum in Germany. Moreover, the government wants to designate Algeria, Morocco, Tunisia and several Balkan states as “safe” countries, making it easier to send them back home.

Whether Chancellor Merkel’s policy reversal helps, remains to be seen. But one thing is clear: Germany is progressively succumbing to the political appeal of populism.

The message is clear: Germany’s political climate for refugees is worsening. The proposal aims to ease deportations and deter new arrivals while thwarting the ascendance of the AfD.

Whether Chancellor Merkel’s policy reversal helps remains to be seen. But one thing is clear: Germany is progressively succumbing to the political appeal of populism – in line with the international trend.

In the United States, populist presidential candidates on both sides of the political spectrum are projecting their eventual triumphs in the country’s primaries, which kicked off this week. In France, Marine Le Pen has long since established her far-right National Front party as a mainstream political force. A President Le Pen is no longer implausible.

In Britain, Nigel Farage and his xenophobic U.K. Independence Party have driven David Cameron’s Conservative Party-led government to hold a referendum on a “Brexit,” a British exit from the European Union.

Conservative populists Beata Szydlo and Victor Orbán have seized power in Poland and Hungary, respectively,  and are now pushing through constitutionally questionable measures in order to hold on to power. Populists on the right have also gained a share of power in Finland and Switzerland. In Spain, Pablo Iglesias of the far-left Podemos party may soon join the government in Madrid. Italy, meanwhile, is a hotbed for right-wing populist parties.

Rise of the AfD-01


Western democracies are witnessing a mass exodus from the political center where, according to conventional political logic, elections normally are won, to the grisly fringes.

At stake is much more than the question of whether, or for how long, one or another populist party can be kept from power in this or that country. The more important question is whether, in retrospect, the past 25 years were really more of an aberration in which the global economy experienced a singular period of globalization after the fall of the Iron Curtain.

It was not only due to the global trade in goods and capital, but also because of the exchange of ideas and people, that more than 1 billion people rose out of poverty during this time. Industrial and developing nations alike experienced enormous gains of prosperity in what someday may come to be viewed as the golden age of globalization.

The world economy grew on average 5 percent from the fall of the Iron Curtain until 2009, when the financial crisis temporarily thrust economic activity into reverse. Germany’s exports alone have more than tripled since 1990.

But globalization does not run on autopilot. There have been warning signs. International trade, which rose by an average 7 percent in the first two decades after the fall of the Berlin Wall, has more than halved to just 3 percent. China, the engine of global economic growth in recent decades, has lost steam, while warmongering, authoritarian regimes such as Russia’s are creating great uncertainty.

On top of all this, Western democracies, which are increasingly at odds with globalization, are embracing isolationism and nationalism. This has leading economists alarmed.

“Above all Germany, as one of the world’s most open national economies, is suffering particularly great damage from increasing political extremism and politico-economic nationalism”

Marcel Fratzscher, President, German Institute for Economic Research

“Above all, Germany, as one of the world’s most open national economies, is suffering particularly great damage from increasing political extremism and politico-economic nationalism,” said Marcel Fratzscher, president of the German Institute for Economic Research. These trends, he said, will only serve to intensify, rather than solve, the challenges of globalization.

According to Michael Hüther, head of the Cologne Institute for Economic Research: “The nationalist tendencies are poison for the German economy. Our highly technological export economy depends upon an open and dynamic global economy.”

International financial investor George Soros, in a recent opinion piece for The Guardian newspaper, similarly advised Americans to reaffirm their commitment to open society and “resist the siren song” of the likes of Republican presidential candidates Donald Trump and Ted Cruz.

Even one of the founding fathers of the AfD, Hans-Olaf Henkel, a long-time euroskeptic who stood for the party’s supposed commercial sense, is critical of the party’s xenophobic drift since Frauke Petry won a power struggle within the party last year, ousting the more moderate party chairman and co-founder Bernd Lucke.

Victor Orban by Bloomberg
The right-wing populist Victor Orbán is securing power through constitutionally questionable means. Source: Bloomberg


Mr. Henkel said he’s become “used to the pain” over the party’s radicalization on the issue of refugees, which reached its “provisional climax” when Ms. Petry and another leading party member, Beatrix von Storch, advocated for German police officers to use firearms to deter refugees at the border.

But what drives people into the arms of politicians who openly speak of shooting at unarmed asylum seekers? The causes are different from country to country. But there is a common denominator: fear, fear of foreign infiltration and fear of a middle-class collapse.

But fear alone does not explain populism’s surge of popularity. Lack of trust in mainstream political elites also fuels their fire. Their failed promises to solve the world’s most pressing problems – whether it’s economic turbulence, an unprecedented influx of refugees or Islamic terrorism – drive people to the political fringes in search for alternatives.

“There is potential for such parties in many countries in Europe, but we have to recognize that this potential has been furthered here by bad policies,” Mr. Henkel, the former AfD member, told Handelsblatt. “We warned early on that criticizing the euro is not the same as criticizing Europe. And criticizing refugee policies is not the same as criticizing refugees themselves. But of course, this is exactly what happens.”

The power of populism to determine the fate of nations is rearing its ugly head in the primary elections for the next president of the United States, which kicked off in Iowa on Monday.

“If you see somebody getting ready to throw a tomato, knock the crap out of them”

Donald Trump, U.S. Republican Presidential Candidate

At his rally in Cedar Rapids, Donald Trump – having been informed by security that protestors were at large and possibly armed with tomatoes – called on supporters to react with violence.

“If you see somebody getting ready to throw a tomato, knock the crap out of them,” he told the rally. “I will pay for the legal fees. I promise.”

“Us” against “them” was the subject of his entire speech: against the Mexicans who take our jobs; against the Muslims who are out to kill us; against the Chinese who swindle us with their junk products; against the opinion police in the media who want to keep us from speaking the truth; and against Washington’s cabal enriching themselves with our tax dollars.

Even iconic Apple could not escape Mr. Trump’s ire. He promises to force the company “to start building their damn computers and things” domestically.

His followers hang on his every word. They emblazon their brooches and baseball caps with their favorite Trump phrases, such as “Bomb the shit out of ISIS” and “Make America Great Again.”

What connects his followers more than anything: their yearning for a benevolent dictator. They want order in America – brought to them by one of the good old boys.

By nightfall, as the votes were nearly all counted, it became clear that Mr. Trump would not carry the Iowa caucus. Instead, he dropped to second place, behind the potentially even more radical Ted Cruz, a religious zealot. It was an obvious setback for Mr. Trump, who almost even fell to third.

But defeat in Iowa has done little to demystify “The Donald.”

He’s now off to Trump terrain for the next primaries in New Hampshire and South Carolina, where he commands an almost insurmountable lead in opinion polls.

But it is not just the Republican base calling for an insurrection. Democrats are fantasizing about a coup d’état of their own. Political outsider Bernie Sanders, who describes himself as a “democratic socialist,” celebrated like a winner in Iowa after coming within a hair’s breadth of beating Hillary Clinton.

“What Iowa has begun tonight is a political revolution,” Mr. Sanders said Monday in Des Moines.

What Mr. Trump, Mr. Cruz and Mr. Sanders all share – despite their vast differences – is the underlying belief that the economy is rigged and some can only lose. In other words, whoever has lost is not at fault. Rather, the cartel of political and financial elites is to blame.

These are soothing words for the downtrodden and those teetering on the edge, albeit in a country as prosperous as none other on earth. Growth is stable and labor market data hasn’t sparkled so much since the 1990s, indicating near total employment.

At his rally in Cedar Rapids, Donald Trump called on supporters to react with violence. Source: APO


But digging under the surface of macroeconomic data, a different picture emerges. Wages are stagnating. Average annual household income today is $4,500 less than before the 2008 financial crisis. And U.S. employment data fails to reflect long-term unemployed people who have stopped looking for work.

“The country has recovered from the worst economic disaster since the Great Depression. Most people have not,” wrote conservative journalist David Frum in a recent article in The Atlantic magazine.

Just as a growing number of Europeans, many Americans also blame free trade for their personal financial difficulties. More than a third of American voters believe free trade is hurting the United States – an opportunity Mr. Trump is jumping all over.

“China is ripping us on trade. They’re devaluing their currency and killing our companies,” he blasted. “They do whatever they want to do.” The solution: an import tariff of 45 percent on Chinese goods.

“One of the major reasons that the middle class in America is disappearing, poverty is increasing and the gap between the rich and everyone else is growing wider and wider is due to our disastrous unfettered free trade policy.”

Bernie Sanders, U.S. Democratic Presidential Candidate

Mr. Sanders is taking advantage of the same sentiment. “Let’s be clear,” he said. “One of the major reasons that the middle class in America is disappearing, that poverty is increasing and that the gap between the rich and everyone else is growing wider and wider is due to our disastrous unfettered free trade policy.”

The disappearing middle class is the prevailing view of many Americans downing in credit card and student loan debt, which they can’t pay off even with three jobs. In reality, the middle class may not be disappearing. But it is shrinking. For the first time in four decades, the U.S. middle class no longer makes up a majority of American society, according to think tank Pew.

A self-aware citizenry is the prerequisite for political stability. But self-awareness has given way to insecurity.

A similar situation is unfolding in France, only its economy is in much worse condition. Unemployment is at 10 percent overall and 25 percent among young people. The two terrorist attacks in Paris have only intensified the fear of foreigners.

In the first round of regional elections in 2015, the National Front was the strongest party in the country. Even though the party could not translate that into electoral success in the second round, National Front boss Marine Le Pen owns France.

Like all right-wing populists, Ms. Le Pen’s political recipe rests upon reclaiming “national sovereignty.” That makes Europe, the euro and globalization her natural enemies. In addition to demanding France’s exit from the euro zone, she is calling for higher import tariffs to protect the domestic economy and – like almost all populists on the right – she wants as little immigration as possible.

Dutch politician Geert Wilders, whose right-wing Party for Freedom is the third-strongest party in the Netherlands, and Jaroslaw Kaczynski, head of Poland’s conservative Law and Justice party, also bemoan the dictatorship of Brussels. Mr. Kaczynski wants a homogenous, strictly Catholic Poland and he’s tossing aside anything and anybody standing in his way.

Just don’t mention to him that Poland owes its economic resurgence to its membership in the European Union and the opening up of the country. Mr. Kaczynski doesn’t want to hear it. Neither does his ideological cousin in Hungary, Prime Minister Viktor Orbán. Mr. Orbán’s refugee policy: close the borders and kick out any migrants who made it through.

Populism is the new defining political force of Western democracies. It is the hour of strong men and women willing to voice their strong convictions. The anger and angst of citizens are their most important resource. Radical ideologies on the right and the left become increasingly difficult to differentiate.


Moritz Koch is Handelsblatt’s Washington correspondent. Jens Münchrath leads Handelsblatt’s weekend section and has long covered economics and monetary policy. Klaus Stratmann is the deputy bureau chief of Handelsblatt in Berlin and covers the energy market. Christian Wermke is a Handelsblatt reporter in Dusseldorf. To contact the authors: koch@handelsblatt.commuenchrath@handelsblatt.com,  stratmann@handelsblatt.comwermke@handelsblatt.com

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