Economic woes preoccupy voters

Discontent with Europe's torpid economy and high unemployment form the backdrop for this week's European Parliament elections and may translate into censure for sitting governments in several EU states.

As more than 340 million citizens in 25 countries prepare to vote, the EU economy is just about to turn the corner after two years of near standstill. The jobless rate in the core 12-nation eurozone remains stubbornly around 8.8 per cent.

Although cross-border EU themes do not feature highly in the campaign, analysts say dissatisfaction with limp economic output and planned reforms driven by EU policy may push voters to rap governments, as in the French regional polls of March.

Domestic economic troubles are particularly in focus in the largest members of the bloc - Germany, France and Italy.

"The sluggish growth in some of the large EU states and continuous pockets of high unemployment across the continent are in the background. It's definitely important mood music," Alasdair Murray, director of the business and social policy unit of the London-based think-tank Centre for European Reform.

"One would expect that to translate into discontent with the sitting governments, to the advantage of some independent parties that seem to offer quick fixes to the current problems."

The economy factor may swing voters equally against France's centre-right government or Germany's socialist one, he said.

In the 10 new member states, which enjoy healthier growth rates than the old EU, fear of Brussels-driven over-regulation in industrial policy and taxation may be an election factor.

"There is quite a lot of concern about the sluggishness of the European economy and the apparent lack of dynamism," said Dariusz Rosati, an ex-foreign minister with the leftist SdPL.

"It is a hope in Poland that the accession... will add that dynamism, new energy and probably shift the opinion in the EU in favour of more deregulation and liberal economy."

A survey by the TNS-Sofres research group showed nearly two-thirds of French people see the elections as a chance to criticise their government after punishing it in March over high unemployment and cost-cutting reforms aimed at bringing the budget deficit below the EU cap of three per cent of GDP.

In Italy, where the economy and the war in Iraq are the two main campaign themes, the centre-left Olive Tree alliance is appealing to the lowest income voters, with slogans such as: "Can you make it to the end of the month?"

Prime Minister Silvio Berlusconi is promising disgruntled voters hefty income tax cuts. But his opponents say debt-ridden Italy cannot afford the cuts, which they see as an attempt to deflect attention from the stalled economy.

"Being now 25 countries means we have nearly 20 million unemployed and 90 million poor," outgoing parliamentarian Christa Randzio-Plath said in a recent news conference.

"This is a drama realised by a lot of EU citizens," the German social democrat, who chaired the Parliament's powerful Economic and Monetary Affairs Committee for five years, added.

But the focus is largely on domestic issues. Big EU themes like the reform of the Stability and Growth Pact or the Lisbon agenda to boost competitiveness were nearly absent. In Britain, which has traditionally pressed for EU reforms and more cross-border competition, the debate on whether to stay in the EU completely overshadowed the reform issue.

In Germany, the first country to bust the EU deficit cap, conservative CDU leader Angela Merkel has been spotlighting the underperformance of Germany's economy relative to EU average.

But EU budget rules issues were used to attack the socialist government, with little debate about the need of the pact.

"The whole debate on competitiveness and economic reform has been really poor. There is a perception that these issues would only benefit business. This is not true. It matters for us all," pro-reform The Lisbon Council president Paul Hofheinz said.