Delayed International Responses to the Euro Crisis and the Rise of the Populist Radical Right

Recent research indicates that populist radical right parties (PRRPs) exploit financial crises to garner electoral support, particularly from economically insecure voters. These parties campaign with anti-international rhetoric, including anti-immigrant sentiments, criticizing mainstream political elites for their failure to prevent crises and for endorsing globalization that, according to PRRPs, exacerbated the crises. Given that financial crises contribute to the rise of PRRPs, it follows that the financial assistance provided to address such crises should, in theory, reduce PRRP support by stimulating economic recovery in the recipient countries. However, limited scholarly attention has been given to understanding effects of international assistance on PRRP support and income distributions within these countries. Building on my article on PRRPs in the November 2023 issue of EPSR, this study examines the Eurozone where several member states experienced severe financial crises in the recent past and received financial assistance from an international consortium known as the Troika. Due to complex negotiations, these crisis-stricken countries encountered varying rates and conditions of assistance, producing diverse economic outcomes across income groups. This variation provides a unique opportunity to assess whether more timely assistance could have mitigated the severity of the crises and curbed the rise of PRRPs. The study employs the synthetic control method to estimate how earlier assistance might have influenced PRRP votes and the income distributions of decile groups within the recipient countries, with attention to the economically insecure. The findings contribute to understanding whether financial assistance can mitigate the anti-international sentiments leveraged by PRRPs for electoral gains.