(This analytical article was written by Anaam Afreen Choudhury)
Britain’s vote in June to leave the EU was the result of a nationalist turn. Campaign posters for “Brexit” depicted hordes of Middle Eastern migrants clamoring to come in. Activists railed against bankers, migrants and rootless experts; one of their slogans was “We want our country back”. After the vote, David Cameron, a cosmopolitan prime minister, resigned and was replaced by Theresa May, who says: “If you believe you’re a citizen of the world, you’re a citizen of nowhere. You don’t understand what the very word ‘citizenship’ means.”
So can nationalism ultimately lead to the death of the European Union and hence the death of free trade? 2016 can be regarded as the year of nationalism as nationalist groups such as The Alternative for Germany, The National Front and the Party for Freedom gain popularity. They all have one common goal: to protect their countries from the EU’s common currency and single market.
Geert Wilders, with his mane of blond hair, is one of Europe’s most recognizable nationalist politicians. His anti-EU Party for Freedom (PVV) has surged to the top of Dutch opinion polls. German politics has been shaken up by Alternative for Germany (AfD), a right-wing party launched in 2013 by economists opposed to the euro. Under leader Frauke Petry it has drawn ever more support by rallying against immigration. In France pollsters no longer dismiss the possibility that Marine Le Pen, the charismatic leader of the National Front (FN), could be elected president. Compared with other Europeans, French voters are strikingly opposed to globalization and international trade, and few think immigrants have had a positive effect on their country. Ms Le Pen promises that she would pull France out of the euro and hold a “Frexit” referendum on membership of the EU. She has blamed Brussels for mass immigration, because of the Schengen free-movement policy. The single currency might not survive a French withdrawal. And if French voters were to back “Frexit”, the EU would surely fall apart.
The consequences for the European Union could be disastrous. But why has nationalism spread like a plague in the EU? It is predominantly caused by the influx of refugees and the growing social inequality. The ‘harmonious development of economic activities’ was an EU objective, but not every member has reaped the fruits of free trade. Nowadays, it seems like it is quite easy to be drawn into disaffection with the single market, especially when you belong to certain social cleavages. For many “blue-collar workers,” the EU means a loss of jobs and a surge of migrants to replace them. As these effects are magnified, nationalism continues to spread and it may ultimately result in the death of the EU.
Going forward, it is evident that more effective corrective mechanisms are needed to cushion the negative effects of the single market and, in doing so, prevent a further popular backlash against globalization and the European Union. Addressing the problem for the long term will require also significant investments in education and skills. Job centers could also speed up the momentum of finding employment. As migration and wage inequality pose concerns governments should use supply side policies to reduce the current disparities. At the European level, regional policy seems appropriately targeted – focusing on infrastructure, education, employment, research and innovation – but poorly funded. Because globalization, combined with technological innovation, seems to be augmenting agglomeration effects within Europe, a case could be made for substantially expanding the funding of these instruments, while at the same time ensuring their local take-up and good use. Governments must equally have stringent enforcements on their attempts to reduce the negative effects of the single market.
Following the Brexit vote, the EU loses one of its evergreen champions of free trade, meaning that some single market initiatives might lose momentum. But although the EU has hurt many workers, for many others it is a blooming opportunity to increase business, allocate resources more efficiently and enhance choices. The EU must stand up to the growing powerful of nationalism, or else, Europeans may be labeled as the “losers of globalization”.