Judging by the eurozone’s bond markets, which just 18 months ago served as the most important globally watched gauge of the European project’s health, the EU should be cruising through its most contented period in years.
Spain and Italy have seen borrowing costs on their benchmark bonds fall to levels not seen since the heady days before Lehman Brothers collapsed. Ireland – the first eurozone member officially to exit its international financial rescue programme – is borrowing in the private market at the cheapest rates on record. Portugal auctioned its first 10-year bond in three years. Even the eurozone’s perpetual problem child, Greece, has been able to dip into the private markets and raise €3 billion on its own.
Despite the unabashedly good news coming from what was once ground zero of an EU existential crisis, however, government leaders are bracing for Europe-wide elections that are expected to see a rash of anti-EU parties reach unprecedented heights.
Although this month’s European Parliament elections will see these populist groups fall well short of a majority – even those predicting a huge groundswell forecast no more than a third of the chamber going to such parties – in some of the EU’s biggest and oldest members, they are poised to make unprecedented gains.
Half of the EU’s six founding members – France, Italy and the Netherlands – are expecting populists or far-right parties to finish first or second in the vote. In the UK, Denmark, Austria, Greece and Finland, similar parties are also near the top two slots.
Even in Germany, where anti-EU sentiment has historically played almost no role in political campaigns, the anti-euro Alternative for Germany party is expected to attract enough votes to win seats.
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