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“Economic policy and the rise of populism”

2017-04-06

Professor Clemens Fuest, CESifo. Photo: Karl Gabor.

On Thursday the EEAG Report 2017 was presented at a seminar in Stockholm. What drives populism, asked Professor Clemens Fuest, CESifo, Munich, at the seminar titled “Economic policy and the rise of populism”. His answer was the large influx of immigrants, but also globalization and people’s perception of losing out. In a panel Professor Fuest was joined by Karolina Ekholm, State Secretary to the Minister for Finance, Assar Lindbeck, Professor IFN and Stockholm University and Alice Teodorescu, Editor-in-chief for opinion at Göteborgs-Posten.


Clemens Fuest also mentioned economic crises as well as some non-economic factors, i.e. lack of trust, to the list of reasons why populism is on the rise. To rein in populism, he argued, we need to embrace political disagreements. In addition he called for a fact based debate and explained that “too much consensus can backfire”.

 

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The panel from left: Clemens Fuest, cecilia Garme (moderator), Karolina Ekholm, Alice Teodorescu and Assar Lindbeck. Photo: Karl Gabor.

 

“Economic policy should recognize that political decisions and economic developments create winners and losers; and that the losers have a right to disagree but no right to be compensated,” said Clemens Fuest arguing that welfare states should offer protection to those who lose out.

In regards to the political decision-making process Clemens Fuest said that governments should refrain from using referenda as an instrument in the political power struggle.” Referenda should provide an opportunity for political initiatives coming from the population, and their role should be clearly defined in the constitution.”

 

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Assar Lindbeck, Professor IFN and Stockholm University argued: "I have difficulties with the concept of populism – today it is even populistic to talk about populism." Who is populist, ha asked. Is it the people that say that mass-immigration of low income groups create severe problems in our neighborhoods? Or is it populistic to say that everybody is welcome to Sweden? The once who admit the problem or the once that cover them up." Photo: Karl Gabor.

 

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Alice Teodorescu, Editor-in-chief for opinion at Göteborgs-Posten said: "In the report it is said that populists address the right questions but have the wrong answers. This is the problem in Sweden. We had a party [Sverigedemokraterna]  that some times addressed the right questions and by doing so the other parties couldn't address them anymore. This created a space for them to address the questions and no one asked them for the answers." Photo: Karl Gabor.

 

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Karolina Ekholm, State Secretary to Minister for Finance Magdalena Andersson, said: "One idea in the report that resonates with me is that the financial crises and the way it was dealt with may have fueled populism. Because the elite that seemed to be responsible for the crises appeared to go through this relatively unscaled while ordinary people had to experience hard times." Photo: Karl Gabor.

 

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The audience at the seminar was large and knowledgeable. Photo: Karl Gabor.

 

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