Analysis: Not Much Left For Europe’s Left

Of particular significance for European and, ultimately, global economic security, is the fact that the political nature of the European project often does not favor straightforward economic solutions or unified policy decisions. Indeed, the political aspects appear to have increasingly trumped the economic ones. The measures proposed to date and likely to be put forward in the future persist in addressing the liquidity of member-states, while the actual underlying problem, exposed initially during the global financial crisis was, and remains, solvency. In addition, the proposed approaches of more Europe tighter European integrationare clashing with the visions of the populations of a number of member-states that seek to have their own economicand even foreignpolicy, independent of Brussels, Berlin, or Paris. Instead, there is a need to address the fundamentals and rediscover the wellspring of economic growth, even in stronger economies, as well as of seeking new forms of leverage that would make Union-wide policies acceptable for all member-states. It is imperative to resolve from where growth will come, and how the economies within the Union are to achieve a level of competitiveness and improve productivity. In essence, the future power of Europe and the future of the European project itself may be considered to be down to the future of Germany. Today, Berlin bemoans the lack of fiscal discipline of southern Europe, knowing full well that Germany itself was a major source of financing the perceived excesses of those same economies. The government and the business elites recognize the need for continued financing of what are ultimately customers for German goods. On the other hand, the increasing unhappiness of the German population about bailing out the rest of Europe is imposing restrictions on how much the German government can be seen to help others. In addressing the problems of Europe, the government of Angela Merkel is challenged by the convergence of contradictory political considerations that curtail its ability to react to the crisis. This is unlikely to change for any future German government elected after this Septembers general elections. In the future, Europe would be even less capable of applying economic resources to maintain the political framework of the Union.

“Social democracy nowadays basically amounts to the defense of the status quo and preventing the worst,” says Olaf Cramme, director of Policy Network, a think-tank for progressive center-left politics. Germany’s opposition Social Democrats (SPD) have just recorded their second worst election result since World War Two. They now face an ugly trilemma between entering a “grand coalition” under Merkel on unequal terms, staying out and seeing her possibly team up with the Greens, the SPD’s natural partner, or being punished by voters at a rerun election. Socialists or social democrats still head 13 of the 28 EU governments and are in coalition in five others, but they are often driven to pursue unpopular policies that hit the interests of their own electorate. “It is an extremely difficult balance,” Social Democratic Danish Prime Minister Helle Thorning-Schmidt told Reuters in an interview. “We had some reforms that have been seen as quite harsh, but they have also been necessary. “I think we have found the right formula, not to be popular because we have not actually reached that yet, but to do the right thing for the country,” she said. Austria’s Socialists lost votes last month, though they remain the largest party. Italy’s center-left Democratic Party, which now heads a shaky left-right coalition, bled votes to the anti-establishment 5-Star protest movement in a February election and is driven by factional squabbling. In Greece, Ireland and Spain, center-left parties are paying a high electoral price for having supported public pay and pension cuts required by international creditors. FEWER MEMBERS, LESS MONEY In Britain, the opposition Labour party is still distrusted because it presided over a deregulated financial market bonanza that ended in the crash of 2008, wrecking the reputation for economic competence once built by Tony Blair and Gordon Brown. In France, one of the few countries with an absolute center-left parliamentary majority, Socialist President Francois Hollande is deeply unpopular as his government dithers between old-style tax-and-spend policies and half-hearted welfare and labor market reforms, satisfying no one. With the membership and funding of mainstream parties dwindling in many countries, the center-left has rarely kept pace with new vectors of political action via social media and grassroots initiatives. Some of the center-left’s woes may be temporary.

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