Why Europe's Left is in Crisis

If politics, like the economy, moves in slow but inexorable cycles, then the center-left that has for so long defined European politics seems to be in a deep and protracted recession. No matter what they call themselves—Social Democrats, Socialists or Labour—rarely have they simultaneously appeared so troubled. In Britain, Labour Prime Minister Gordon Brown's popularity has hit rock bottom. Germany's Social Democrats are a dwindling party, squeezed between conservatives in the center and populist extremists on the left. In France and Italy, telegenic new-style rightists have managed to reduce the left-wing opposition to tatters. Even Spain's José Luis Rodríguez Zapatero, the last unchallenged mainstream-left ruler of a major European power, looks increasingly besieged as the Spanish economic miracle crashes all around him.

Why is Europe's left struggling so? Last week Germany's Social Democrats dumped their fourth chairman in as many years and nominated a charisma-free career bureaucrat, Foreign Minister Frank-Walter Steinmeier, to face off against the popular Chancellor Angela Merkel in the September 2009 national election. Only days earlier the annual late-summer confab of the French Socialists in La Rochelle erupted in discord and intrigue over the party's direction. To be sure, each party's troubles are shaped by personnel and circumstance—from British voters' ennui with Brown after 11 years of Labour rule to Italy's venerated tradition of a fractious, self-destructive left. Yet they are also struggling with a common clutch of problems. Among them, they are facing a center-right that is increasingly adept at cherry-picking policies that used to be considered "left"—like education, environmentalism and social justice. The current economic downturn also tends to favor conservatives, whom voters generally see as more prudent on issues affecting the economy.

But the biggest dilemma is that most parties on the left have not figured out how to adapt their old welfare-statist ideologies to modern economic realities—while appealing to voters who see modern reform as a betrayal of their parties' traditional socialist ideals, and who often have more-extreme left-wing parties to turn to. David Marquand, a former British Labour M.P., says the left finds it much more difficult than the right to co-opt or even engage the opposition. "Their inheritance as class-based parties has kept alive a powerful myth of class treachery and betrayal if they try to cooperate with the right," he says. The result: Europe's mainstream leftist parties are facing not a temporary downturn but the gravest crisis in decades.

Exhibit A of these dilemmas is Germany's SPD—even if it still shares power as the junior partner in a coalition with Merkel's Christian Democrats. The opaque backroom deal that produced Steinmeier's nomination last week couldn't have been in starker contrast to the proud and public spectacle taking place at the same time across the Atlantic, as America's parties finished the process of nominating their candidates. Steinmeier's main intraparty rival, SPD Chairman Kurt Beck, didn't bow out with a graceful call for party unity but resigned in a huff, blaming unspecified "intrigues" and "plots."

Coming in the midst of a crisis that has seen the SPD's membership plummet and nationwide support drop as low as 20 percent last month, the move is more a sign of the party's continued disarray than of any fresh beginnings. France's Socialists are in even worse trouble. Leaderless and without a clear platform ever since Nicolas Sarkozy trounced them in last year's presidential election, they're torn between joining forces with the communists and various marginal leftists groups, and moving toward a more social-democratic middle. Sarkozy has also done a brilliant job destabilizing them, not only by naming prominent leftists to his ostentatiously bipartisan cabinet. One day before the Socialists' unseemly summer conference, Sarkozy unveiled plans for a new job subsidy akin to America's earned income tax credit—to be financed by a new tax on investment capital. French business is fuming—but so are the Socialists, who seem helpless as they watch Sarkozy sprinkle his policies with such classic left-wing measures.

Italy's Silvio Berlusconi has also done a brilliant job poaching the left's policies. He has slapped banks and energy companies with a new €1 billion "Robin Hood tax"—ironically, after his leftist predecessor had just cut corporate taxes. His Finance minister, Giulio Tremonti, is a prominent anti-globalization firebrand. Ditto for the British Conservatives, riding high at 45 percent in current polls, compared with just 26 percent for Labour. Conservative leader David Cameron has adopted a softer, nicer conservatism by embracing green policies and social justice. But at a deeper level, Labour suffers from an ideological malaise as well. There's suspicion among the middle classes that Labour—and, in particular, Brown, who has retreated from Tony Blair's unabashed support for market-friendly policies—has an instinctive weakness for an old-style "tax and spend" strategy that hasn't paid dividends. Spending on education and health, for example, has more than doubled without a corresponding improvement in service.

The right has also been good at exploiting European worries over immigration with policies that go beyond the usual tough stance on borders and crime. Under leaders like Merkel and Sarkozy, the right has pushed to develop ways to integrate poor Muslim minorities, leaving behind the left's traditional laissez-faire multiculturalism that has failed in the past.

The next major election in which all these dilemmas will be in play is Germany's, next year. The 145-year-old SPD has been in a state of crisis ever since it came to power in 1998 under the leadership of Gerhard Schröder. Faced with ever-rising mass unemployment, Schröder shocked the party by launching his "Agenda 2010" package of gradual but necessary tax relief, welfare cutbacks and labor reforms. Though Schröder's agenda helped cut unemployment from 13 percent in 2005 to 7.6 percent today, the reforms were deeply unpopular with the SPD's voters and party base, who had been raised on the party's traditional promises of an expanding welfare state—and were blindsided by the sudden switch in policy.

The result is by now familiar: a hemorrhage of SPD members and voters to the post-communist and nationalist Left Party, the collapse of the Schröder government and snap elections that brought Angela Merkel to power in 2005. The SPD's strategy until last week—a steady drift back to the left—has only accelerated its demise. While Schröder's reforms drove the SPD's traditional voters into the arms of the Left Party, the SPD's renewed leftward lurch under the ousted chairman Beck has not only alienated centrists. What's more, no matter how many new promises the SPD made, it always fell at least one step short of the Left Party's even more radical proposals. "Whenever the SPD preaches wine, the Left Party offers champagne," says Wolfgang Nowak, a former strategist in Schröder's chancellery. If a national election were held today, the Left Party would poll 14 percent, compared with the SPD's 26 percent (down from 34 percent in the 2005 election). Most likely, Merkel would remain in power.

Steinmeier seems an unlikely figure to resolve any of these dilemmas. Though his approval ratings are second only to Merkel's in Germany, that's likely due to his post—foreign ministers are always among Germans' most-beloved politicians, thanks to their high profile and low exposure to domestic-policy conflict. To many Germans, however, Steinmeier remains a cipher. He has never run for office, nor does he have a prior track record as a politician; he rose through the ranks first as Schröder's assistant, then chief of staff. Known as an efficient, middle-of-the-road apparatchik, he has a wry charm but little stage presence. Nowak says that in the four years he worked with him in the chancellery, Steinmeier was known for "cleaning up Schröder's messes" but not any policy preferences of his own. His biography couldn't be more unspectacular—born to working-class parents in a Westphalian village, trained as a lawyer, a career serving others in the bureaucracy. Friends say he only agreed to become foreign minister after SPD grandees could find no one else.

Choosing Steinmeier signals, for now, a halt in the SPD's steady drift to the left. But by no means does it suggest a renewed reform course for Germany. Steinmeier has ruled out tax cuts and signed on to a new, more left-leaning SPD election platform that calls for tighter employment regulations, new taxes on "the rich" and a partial rollback of public pension reforms. Any veering away from this platform will set off vicious internal opposition. Leaders of the SPD's left wing, like Berlin Mayor Klaus Wowereit—who also rules in a coalition with the Left Party—stand ready to pounce at the first opportunity to push for a national alliance with the post-communists should Steinmeier falter. For Left Party leader Oskar Lafontaine, the nomination of a key architect of Schröder's reforms is helpful ammunition in his propaganda war against the SPD.

Steinmeier's biggest problem may be that while he and Schröder may have developed some sensible reforms, they never came up with a convincing narrative of what one might call a modern progressive reformism—a narrative of opportunity and inclusion to replace the party's traditional welfare-statist and unionist platform. That intellectual incoherence remains a problem for the SPD, and at times its speechlessness seems absurd: the reforms helped get 1.4 million Germans off the dole, yet the party is reluctant to defend its policies.

The more tangible reality for much of the SPD today seems to be its own, deeply offended redistributionist soul, says Thomas Petersen, an analyst at Germany's Allensbach Institute. While Tony Blair "accepted, however grumblingly, that there was a certain reality about the way the world works," says Petersen, the SPD, like France's Socialists or Italy's leftist parties, "never made its peace with capitalism and the market economy, nor the competition and inequalities that go with it." That's why for the SPD, national government has always ended in disaster, producing self-destructive party schisms whenever holding power confronted it with the uncomfortable reality that much of what it had promised voters was not only unaffordable, but destructive to the economy as well. For now, rallying behind Steinmeier for the campaign will paper over these conflicts. But they'll be back to the fore after Election Day, at the latest.

With Jacopo Barigazzi in Milan, Tracy McNicoll in Paris And William Underhill in London