Fall of Liz Truss in UK heralds more acute crisis in Europe

It was a busy week in Europe. On Sunday (16), thousands took to the streets of Paris to protest against the rising cost of living. In the second, the British finance minister threw in the trash the economic plan of the then prime minister, Liz Truss. On Tuesday, a strike gained strength in France, and in Italy former Prime Minister Silvio Berlusconi said he had reconnected with Putin, from whom he allegedly received 20 bottles of vodka.

On Wednesday, inflation rates confirmed that prices continued to rise in September in the European Union and the United Kingdom, and the French government resorted to a rare mechanism for the budget law to advance without the votes of Parliament. On Thursday, Truss resigned after 44 days. On Friday, Giorgia Meloni was officially charged with forming the Italian government, the first far-right government since fascism.

There’s more: in Germany, on the brink of recession, Prime Minister Olaf Scholz is under pressure due to the answers to the energy crisis. Internally, he faces resistance from allies for prolonging the operation of nuclear plants. Outside, the ugly faces of leaders in the face of their reluctance to adopt a cap on the price of gas.

These are turbulences of different nuances, but they signal what analysts have been predicting for months. Autumn in the Northern Hemisphere signals a wave of growing dissatisfaction. “A winter of global discontent is on the horizon. The cost-of-living crisis is raging, confidence is collapsing and inequalities are exploding,” UN Secretary-General António Guterres said recently.

The “winter of discontent”, a Shakespearean expression, refers to the period in the late 1970s in the United Kingdom, marked by strikes for wage increases. More than 40 years later, the scenario takes shape in France, which for weeks has been experiencing an escalation of protests by workers.

Faced with inflation of 6.2% in September – below the euro zone average (9.9%) – eroded purchasing power turned the argument for shutdowns. The movement, which started in refineries and nuclear power plants, gained support from railroad workers, sanitation operators and education officials.

Thus, more than 100,000 people took part in public events, the largest in the second term of President Emmanuel Macron – now submerged in internal crisis, compared to the beginning of the year, when he tried to assume a role of diplomatic helmsman of the continent.

The unease comes from the streets and from Parliament, in which the government does not have an absolute majority. After unsuccessful attempts, it was necessary to activate a constitutional tool (Article 49.3) that allowed the Executive to approve the first part of the 2023 budget without the votes of the deputies.

The opposition called the measure undemocratic and is preparing a vote of no confidence – which did not prevent the government from resorting to the mechanism again the next day, for the social security budget.

Strikes have been on the British agenda since before the fall of Truss, an outcome that intensifies the economic and political crisis that has dragged on for months in the country. Faced with increasingly expensive bills, with a rise of more than 14% in food prices, categories such as nurses and port workers are planning demonstrations.

Seeing his economic plan, based on tax cuts and loan expansion, sink, Truss said goodbye after devaluing the pound and seeing his popularity plummet. The opposition is pushing for new elections, but the Conservatives are promising a successor – the third prime minister this year – by the 28th.

For Sylvain Kahn, professor of European affairs at Sciences Po, in Paris, it is still not possible to speak of a scenario of instability in Europe, despite the energy and inflationary issues resulting from the War in Ukraine. The UK’s crisis, on the other hand, is deeper than that of its former EU counterparts.

“In the EU, there is a lot of institutional and political regulation, and each leader knows that he must also work on behalf of the other countries. If the UK were still in the bloc, Truss might not even have announced his plan,” he tells Sheet. “The reality is that EU countries are less weak because they are together.”

Whatever the circumstances, the challenges, however, seem to be the same in London, Berlin, Rome, Paris… Truss’ short-lived stint in the government, then, serves as a warning to Meloni, who assumed the post of prime minister this year. Saturday (22). The declared priority of the new Minister of Economy, Giancarlo Giorgetti, is to intervene in energy prices to curb inflation (9.4%) and contain damage to families and companies, leaving electoral promises such as the single tax rate in the background.

The intention sounds good, but it will be necessary to observe the capacity of the coalition, which includes the acronyms of Matteo Salvini and Berlusconi, to overcome differences. This week, Italy added to the unrest in Europe with Berlusconi’s leaked audio, in which he blamed Ukraine for the war and said he had reconnected with Putin. “He told me that I am the first of his five real friends,” he told lawmakers.

Meloni made a strong statement, reinforcing the Europeanist and Atlanticist line of the mandate. “Whoever does not agree cannot be part of the government, at the cost of not having a government.”

Europe’s largest economy, Germany, has eased social unrest with the €200 billion package that alleviates the impacts of the energy crisis. The measure aroused criticism from neighbors, who saw selfishness in the search for an individual remedy. Macron stressed that the isolation of Berlin “is not good for Europe”.

Another uncomfortable point has been Berlin’s resistance to supporting the gas price ceiling. Under pressure, Scholz showed signs of having given in to the issue after a meeting of European Council leaders this week. Earlier, however, he had already canceled a bilateral meeting with Macron, officially for logistical reasons, but behind the scenes, due to divisions on energy and defense issues.

According to Sciences Po’s Kahn, even in the energy crisis, a field difficult to maintain unity among the 27 countries, with such diverse realities, the bloc has managed to move forward, albeit little by little.

“The EU is stronger than it appears. During the pandemic and in the recovery plan, this dynamic has improved. I see no signs that it is weakening.” Winter, however, hasn’t even started yet.

The unease with the leaders of Europe’s largest economies

olaf Scholz (Germany)

• Popular approval: 25%
• Inflation in Sep.22: 10.9%
• The country is the most dependent on Russian gas in Europe
• The prime minister is under internal and external pressure to deal with the energy crisis and has heard criticism for the isolation

Liz Truss (UK)

• Popular approval: 10%
• Inflation in Sep.22: 10.1%
• Saw his economic plan fail and be reversed
• Under pressure from all sides, he resigned after 44 days in government.

Emmanuel Macron (France)

• Popular approval: 37%
• Inflation in Sep.22: 6.2%
• Without support in the Assembly, it had to use twice a device that allows laws to be passed without majority approval.
• Internally, it sees workers’ dissatisfaction growing; country had a general strike

Giorgia Meloni (Italy)

• Popular approval: 40% (expectation)
• Inflation in Sep.22: 9.4%
• Will need to deal with the economic crisis while facing resistance within the coalition itself

Sources: YouGov, Ifop, Insa, Ipsos, Statista