(By Martin Hutchinson) The European election result has been met with little interest in the United States; for one thing, the plethora of parties from 27 different countries makes it almost incomprehensible. Yet it continued a long-term, very important trend, which should be hugely interesting to international investors.
You see, the longstanding attitude toward Europe - that it is an anti-free-market continent that should be of little interest to investors - is wrong; for the last couple of decades, it has been becoming more free-market-oriented, coming closer to the U.S. economic system.
You can see this more clearly by examining the last four European elections - 1994, 1999, 2004 and:
- Group I: Socialist/Green - believing in strong state control over the economy, whether for political or environmental reasons.
- Group II: Center-right - often nationalist, but believing generally in a free-market economy, although generally with greater government involvement and more welfare payments than in the United States, and finally.
- Group III: Centrist/Other - either small center parties holding the balance of power in domestic parliaments or the inevitable residue of the unclassifiable.
Thus, the British Conservatives and German Christian Democrats fall in Group II, as would some smaller parties, like the British U.K. Independence Party and the Swedish Pirate party (which is a small libertarian anti-copyright outfit). The British Labor party, the French Socialists, various hard-left parties and the Greens fall into Group I. The British Liberal Democrats, the German Free Democrats and such economically un-definable parties as the British National Party fall into Group III. This gives anomalies - the German Free Democrats are highly free-market-oriented, for example - but most of them are fairly small and should cancel out.
Then since 1994, EU elections have shown the following trend:
- 1994: 12 countries. Socialist Group I parties 249 seats of 567, 44%, Group II 40%, Group III 16%.
- 1999: 15 countries. Socialist Group 1 parties 270 of 626, 43%, Group II 45%, Group III 12%.
- 2004: 25 countries. Socialist Group I parties 283 of 732, 39%, Group II 45%, Group III 16%.
- 2009: 27 countries. Socialist Group I parties 243 of 736, 33%, Group II 45%, Group III 22%.
You can see the trend.
