econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 24 May 2017

Why The Decline Of Europe's Center-Left Matters

from STRATFOR

-- this post authored by Adriano Bosoni

The leaders of the European Union are breathing sighs of relief. Elections in France and the Netherlands resulted in the defeat of candidates who threatened to upset European integration. In Germany, where general elections are upcoming, the far-right is internally divided and weak, and while nationalist and Euroskeptic forces in Italy and Austria are polling well, centrists still have a chance to retain power.

The resilience of moderate forces has been a cause for celebration in Brussels and other European capitals. However, their successes cannot hide a significant fact: The European center-left is in crisis. Some of the Continent’s largest social democratic parties, which were instrumental in the establishment of stable political systems and prosperous economies over the past seven decades, are struggling to remain relevant today. Their weakness could create fertile ground for virulent social and political crises in the future.

These are not easy times for center-left parties in Europe. The candidate representing France’s Socialist Party, which had won the presidency in 2012, finished fifth in the first round of the recent French presidential election. In the United Kingdom, the Labour Party, once a mighty force in British politics, has been in the opposition for almost a decade and is struggling to form a coherent position on Brexit. Spain's Socialist Party, which controlled most Spanish governments between the 1980s and the 2000s, found its support dropping to record lows in the past two general elections. In Germany, the popularity of the Social Democratic Party has dwindled over the past 12 years. Italy's Democratic Party is still in power, but it is fragmented and under threat from the rise of populist opposition groups.

So, what went wrong for these once-powerful political parties? The answer, in part, is that many of them have lost touch with voters. Social democracy can trace its roots to the Industrial Revolution. The process of industrialization and urbanization created poor working conditions and low standards of living for workers in a system where capitalists controlled the wealth and political power. Socialist ideology took hold in the mid-19th century as labor organized to push back against unfair political and economic systems. Over time, Europe’s social democrats shed their revolutionary elements, and by the middle of the 20th century, they were no longer campaigning to replace the capitalist system, but only to correct its abuses and to distribute wealth more equally.

After World War II, social democratic parties offered voters a balance between the benefits of capitalism and the presence of a strong state that would protect its citizens. Those parties embraced free markets and U.S. leadership in global affairs while supporting European integration. In the process, they helped build a political model based on democracy and social cooperation, and they played an important role in the economic recovery of the postwar years. If the turbulent 1920s and 1930s drove voters to the extremes, the prosperous 1950s and 1960s returned them to the center.

The global economy is changing, and social democratic parties are struggling to keep up. Across Europe (and in other developed economies), manufacturing is in decline, and industrial jobs are disappearing. As the digital economy continues to expand, the nature of employment is mutating. Temporary, freelance and remote jobs are progressively replacing permanent, long-term, and location-based jobs. Membership in trade unions, once reliable sources for center-left party recruitment, continues to drop. As economic realities rapidly shift, center-left parties have found it difficult to adapt their rhetoric and are losing ground, particularly among young voters.

Enter the European Crisis

The economic crisis that gripped Europe at the start of the decade also dealt a blow to social democrats. The progressive governments in power when the crisis began in countries like Greece, Portugal and Spain were among the first to introduce deeply unpopular austerity measures that in theory were contrary to their ideologies. To those facing the loss of jobs and financial security, professional politicians, bankers, corporations and even EU bureaucrats became the enemy. The social democratic parties in power were equated with the establishment that tolerated the misbehavior that created the conditions for the crisis. Instead of developing fresh ideas to tackle the emerging social and economic upheaval, many social democratic parties instead opted to defend outdated policies.

As a result, voters began to support more radical parties. To some extent, voter behavior followed a geographic pattern. In southern countries such as Spain, Portugal and Greece (where memories of right-wing dictatorships were still fresh) voters tended to migrate to the far left. In northern Europe (where national identity issues are more prominent), many embraced the far right. Those ideological classifications are elusive, however. The rising parties all share the same populist viewpoint: "us versus them." They identify globalization, the wealthy, professional politicians and, in the case of the far right, minorities as the enemies of "the people" (the self-styled hard-working, unsophisticated voters). In this regard, populism is more of a strategy than an ideology, as the main narrative can adopt nationalist, xenophobic, protectionist or anti-imperialist elements, depending on the circumstances of the country.

While social democratic parties often struggle to build policy proposals, their populist rivals tend to offer simple solutions: Strong state control over the economy will result in job creation and the protection of the welfare state. Social cohesion will be re-established by defending the national identity (in the case of the far right) and by introducing massive public spending programs paid for by high taxes on the privileged groups of society.

Most populist parties have never held power, a fact that allows them to present themselves as political outsiders. In the few cases where populists have actually entered a government, the results have been disappointing. During its meteoric rise in popularity, for example, Greece's left-wing Syriza party wiped the country’s traditional center-left Panhellenic Socialist Movement from the electoral map. Syriza, whose formal name is the Coalition of the Radical Left, won the general election in January 2015 with a promise to renegotiate (or even stop paying) Greece’s massive foreign debt. A few months into Syriza's reign, however, Greece was under capital controls and requesting a new bailout program from its lenders.

The policy about-face by Syriza occurred, in part, because most Greeks wanted to remain in the eurozone, even at the price of more austerity. (The popularity of the eurozone in France also explains the National Front’s erratic positions on the common currency). In maintaining its tough line on Greece, the European Union wanted to make an example of Syriza and serve notice to radical parties elsewhere in the Continent (such as Spain’s Podemos). In the short term, it worked. But unless the Greek economy quickly returns to strong growth, that tactic may not work again in the future.

Co-opting the Radical Message

As their radical rivals have grown in popularity, some moderate parties have adopted elements of the populist agenda. In general, conservative mainstream parties have had more success with that strategy. In the United Kingdom, the Conservative Party-led government (which is polling strongly ahead of the general election in June) identified reducing immigration as a priority during the Brexit negotiations with the European Union, even if it comes at the cost of leaving the EU single market. Moreover, the party’s electoral manifesto is critical of "untrammeled free markets" and some aspects of globalization. In the Netherlands, Prime Minister Mark Rutte (whose conservative People's Party for Freedom and Democracy won the March election) recently wrote that newcomers who refuse to adopt his country’s values should "behave normally, or go away." On the contrary, center-left parties in Spain, France and the United Kingdom all experienced electoral disappointments after choosing more left-wing leaders; some voters were put off by their transformation, while others found the political expediency unconvincing.

The center-left finds itself in another awkward position when it comes to foreign policy. Most populist parties on both the right and left question the global leadership of the United States and want to severely limit their countries' military interventions abroad. More important, they are critical of the European Union and demand a deep overhaul of the bloc or even its dissolution. Many conservative parties reacted to the new political environment by proposing a repatriation of powers from Brussels to national governments. These ideas have proved more difficult to embrace among center-left parties, which have traditionally supported the process of European integration. With the exception of timid calls for more public spending at the EU level, criticisms of the bloc remain taboo for most of them.

In this context, new French President Emmanuel Macron’s victory is notable because, in a crowd full of extremists, he managed to win election as a moderate. But his presidency carries some risks, because his win does not necessarily provide him with a strong mandate. For one, it's hard to identify who voted for him and why. Many of the people who supported Macron in the second round of the presidential election were voting to keep the National Front's Marine Le Pen from winning. Even though both conservative and progressive voters chose Macron, it does not mean they share his views on how the economy should be reformed or how relations with the European Union should be handled. During a campaign, centrist views can appeal to different sectors of society. But they could become a burden after election if a winning candidate cannot deliver on the expectations that voters have built up.

Since Macron's En Marche! party is brand new, many of its candidates who will enter the National Assembly in June have little to no experience in politics. It may take some time for them to understand how France’s institutional system works. The patience of French voters may quickly wear thin as their new leaders learn the ropes of governing. That could lead to more dissatisfaction, lending populist forces more support in the future.

Implications of a Weakened Center

After World War II, political competition in Western Europe pitted centrist forces that, while separated by ideology on many issues, shared common objectives on fundamental domestic and foreign policy questions. This system produced stable, prosperous democracies that kept most voters close to the political center and relegated those with extreme views to the fringes.

In any democracy, groups representing certain economic and political interests hold power while groups representing other interests find themselves in the opposition. For most of the past seven decades in Europe (perhaps with the exception of the turbulent 1970s), the views of the groups in the opposition were not radically different from those of groups in power. Most political players accepted the rules of the game, and a change in government did not mean a radical change of direction for the country. The decline of social democratic parties could upend this stability. If the center-left is no longer relevant, then the center-right no longer has a moderate interlocutor. If the segment of society not represented by the government is fundamentally opposed to the current social, economic and political system, it sets the stage for significant disruptions to the existing order.

Social democratic parties in Europe have some soul-searching ahead of them if they want to remain relevant. If the economic system that brought them to power no longer exists, and if parts of their political platforms are obsolete, then how can they adapt to the new reality? The emergence of populist parties demonstrates that the concerns that originally led to the rise of social democracy such as inequality and redistribution of wealth still resonate in the 21st century. The challenge for social democrats will be to present their views in ways that connect with today's voters but are still different than those of their extremist rivals. The center-left has yet to figure out how to fight the new war, and until it does, it may find itself relegated to political weakness.

Europe will face numerous tests in the coming years. Countries will have to restructure their economies to regain competitiveness and redesign their welfare states to make them more sustainable. They will also have to figure out how to respond to issues like terrorism, immigration, global warming and demographic change. In the absence of political stability or a degree of consensus among social, political and economic interests, the reforms necessary to address those problems will be difficult to introduce. Without them, the ground for additional, and perhaps more virulent, social and political instability will remain fertile. As the strong performance of right-wing and left-wing populist parties in the French presidential election demonstrated, a disappointed electorate can embrace the extremes if it feels that the political center is no longer serving them.

"Why the Decline of Europe's Center-Left Matters" is republished with permission of Stratfor.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.




Econintersect Contributors








search_box
Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.







Keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government





























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved