The world’s leading democracies are struggling to govern

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The G7 is the “steering committee of the free world”, according to Jake Sullivan, President Joe Biden’s national security adviser. If so, the free world has a problem. The majority of G7 governments are now so burdened with domestic political problems that they are incapable of steering their own countries — let alone the free world.

Consider the political situations in France, Germany, Canada, Japan and South Korea (the latter is not formally a member of the G7, but routinely attends the summits). In France, the government recently fell after it was unable to pass a budget. A new prime minister is in place but will face the same problems. There is much speculation that Emmanuel Macron will resign as president before the scheduled end of his term in 2027.

Germany is heading for elections after the collapse of the “traffic-light” coalition led by Olaf Scholz. Recent elections in Japan saw the ruling Liberal Democratic party lose its majority for the first time since 2009 — with another poll likely next year. In Canada, Justin Trudeau’s near decade in power is coming to an undignified end. With his party way behind in the polls, the prime minister is under intense pressure to resign.

The pièce de résistance of democratic decline is South Korea, where President Yoon Suk Yeol’s political position became so desperate that he declared martial law. Popular protests quickly forced him to back down and led to his impeachment.

Outside the US, the only two G7 countries that could claim to have a stable government in place are the UK and Italy. Britain’s prime minister, Sir Keir Starmer, won a whopping majority in this summer’s elections. But his poll ratings have since plummeted fast. In fact, Starmer is now more unpopular after five months in office than any UK prime minister in four decades. Only Italy’s Giorgia Meloni can make a plausible claim to be looked upon favourably by her voters and the markets.

So what ails the G7? As ever, the local context matters. In Japan, corruption scandals have weakened the LDP. Macron and Trudeau are both leaders who have lost their shine after many years in office.

But there also seem to be two big overarching factors that are making it very difficult for almost all G7 democracies to maintain stable governments. The first is the decline of the political centre and the rise of populist parties. The second is a fiscal squeeze created by slow growth, ageing societies, the pandemic, the financial crisis of 2008 and demands for increased defence spending.

Populism and fiscal problems are feeding on each other and make it harder and harder to govern. France’s government was brought down after it tried to cut spending and raise taxes to combat a budget deficit of 6 per cent of GDP. Since a large chunk of the French parliament is in the hands of the far left or the far right, it is extremely difficult to broker political compromises.

Starmer’s large majority in Britain made it possible for his government to do what the French could not do — increase taxes, in an effort to balance the books. But tax rises have contributed to Labour’s falling popularity. The difficulty of finding money in tough times also played a significant part in the political crises in Canada and Japan.

The return of Donald Trump to the White House is likely to contribute to the atmosphere of political instability across the G7. Rather than trying to help out the governments of his democratic allies, Trump and his current favourite, Elon Musk, seem to enjoy piling on the pain. The Maga Republicans particularly like baiting centre-left leaders such as Trudeau, Scholz and Starmer.

Trump has gone out of his way to humiliate Trudeau, referring to Canada as America’s 51st state and its prime minister as its “governor”. Musk has made headlines across Europe by posting on X: “Only the AfD can save Germany.” He has also held a well-publicised meeting with Nigel Farage, the leader of Reform in Britain — who made it clear that he is hoping for Musk’s financial backing.

The Trump Republicans no longer regard the traditional conservatives in Europe as their sister parties. Kemi Badenoch, the leader of Britain’s Tories, and Friedrich Merz, the leader of Germany’s Christian Democrats, can only look on in dismay as Trump and Musk reach out instead to the radical, nationalist right. Christian Lindner, the leader of Germany’s struggling, pro-business Free Democrats, issued a plaintive plea to “Elon”, informing him that the AfD was a “far-right extremist party”. Touchingly, he seemed to believe this would put Musk off.

Merz’s CDU is currently well ahead of the AfD in the polls for the German elections. But far-right and populist parties across the G7 now clearly have a friend in the White House. Musk can help parties like the AfD and Reform with publicity and, perhaps, money. But his support could also backfire at times. Nationalist parties such as France’s Rassemblement National have a strong anti-American tradition and will be wary of looking like the tools of rich foreigners.

Trump’s interventions may not ensure that he can install ideological bedfellows around the rest of the G7. Instead he may create a situation in which the leaders of many of America’s closest allies come to regard the US president not as a friend, but as a dangerous political enemy.

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