THE arrival of technocratic prime ministers in Greece and Italy has not been greeted with universal applause. Some complain that because Lucas Papademos and Mario Monti have not been elected, their appointments will simply confirm the elitist and undemocratic nature of the European project.

Perhaps so. But technocrats have something to be said for them in the middle of a financial crisis. They are perfectly at home in the world of yield curves and collateralised debt obligations. They understand foreign countries, as well as the markets. If you enter their offices, they are unlikely to ask for a bribe or to pinch your bum. Since they are assumed not to want a long-term career in politics, they may take difficult decisions.

European technocrats tend to have strikingly similar credentials. Compare the CVs of Monti, Papademos and Mario Draghi, the newly arrived head of the European Central Bank. All three men are economists, who trained in the US. All three have had top jobs in the bureaucracy of the European Union (EU). Both Monti and Draghi have worked for Goldman Sachs.

These qualifications will please the markets and upset antiglobalists. But Europe, and the world at large, has every reason to hope Monti and Papademos can work miracles. For if the technocrats fail to do so, the extremists are waiting in the wings. In Greece, about 25% of the electorate now say they favour parties of the far left and a further 8% back the nationalist right. Collectively, the political extremes in Greece now muster more support than either of the two mainstream parties. The shape of Italian politics, after the forced resignation of Silvio Berlusconi, is likely to be confused for a while. But Italy has spawned powerful communist and far-right movements in the past. In the meantime, Umberto Bossi of the Northern League says he will relish entering opposition - where he can rail against the EU, immigrants and southern Italians.

The radicalisation of politics is just as visible in the creditor nations of Europe as among the debtors. Marine le Pen of the far- right National Front will have a big effect on next year's presidential election in France. In the Netherlands, the government now relies on the votes of the Freedom Party led by Geert Wilders, which is running second in the polls. Austria's far-right Freedom Party is at level pegging in the polls with the governing People's Party. In Finland, the nationalist True Finns are still gaining ground and are easily above 20% in the polls. All of these rising parties rail against "elites".

They are all hostile to globalisation and to immigration, particularly from the Muslim world. Some parts of the European far right still play on traditional anti-Semitic themes. But others, such as Wilders, are strongly pro- Israel, perhaps because they see the Jewish state as an ally in a clash of civilisations with the Muslim world.

Increasingly, however, Europe's populists are intent on breaking out of the electoral ghetto of hostility to immigration - and are instead stressing economic and Eurosceptic themes that have a broader appeal.

All the populist parties are deeply sceptical of the EU, which they see as promoting most of the things they abhor: multiculturalism, international capitalism, the erosion of national borders and the erasure of national currencies.

In France, Le Pen campaigns to withdraw France from the euro, impose tariff barriers and roll back the Schengen agreement on free movement of people across the EU. In the Netherlands Wilders, who was once a single-issue anti-Islam politician, has just announced he is investigating the possibility of the Netherlands ditching the euro and going back to the guilder. Polls show that a majority of the Dutch population now regrets joining the European single currency.

For the moment, across Europe, there is no party of the far right or the far left that looks close to winning power through the ballot box. Generally, the mainstream parties can still band together to keep the extremes out. But it would still be a big mistake to write the populists and extremists off.

These groups are powerful enough to strongly influence the debate. Mainstream politicians in creditor nations such as Finland, the Netherlands and Slovakia say that, after the Greek bail-out, they could not possibly vote for a further package of loans for Italy - the voters would revolt and turn to the political extremes. In France, debates on immigration and economic policy have been pulled right by the National Front.

All this is happening in an economic situation that is bad. Imagine, however, what the European political landscape would look like if banks started to collapse, people lost their savings and jobs, and there was another deep recession. Voters would be desperate and disillusioned enough to turn to the extremist parties in much larger numbers.

So a great deal is riding on the ability of the technocrats to stabilise their national economies, calm the bond markets and prevent another financial crisis and a disorderly break-up of the euro. The trouble is that, while Monti, Papademos and Draghi are very able men, they are not miracle-workers. The situation in Europe may now be too far gone for even the most steely and brilliant of technocrats to turn things around. © 2011 The Financial Times Limited