Global capitalism is in crisis. Free market economics is an ideology in free fall. Neoliberalism has become a dirty word. Never before has the case for the role of the state been so compelling. Surely the conditions for social democratic arguments to win out could not be better?

The centre-left in Europe has singularly failed to seize the moment and as a result got a kicking at the ballot box in June’s European elections. With a very small handful of exceptions, it was not only centre-left parties in government but also, more unexpectedly, those in opposition who suffered defeat.

Social democratic parties in government, such as the Labour party here and its sister parties in Bulgaria and Hungary, got a mighty drubbing. José Luis Rodríguez Zapatero’s Socialists were narrowly defeated but did relatively well in comparison. The Spanish prime minister only lost out by 2% to the centre-right Partido Popular, which is remarkable given that Spain’s unemployment rate currently stands at 20%. The German Social Democrats and the Dutch Labour party also lost out to their dominant centre-right coalition partners.

Worse still, our centre-left friends in opposition failed to capitalise on the usual European election protest vote and the doom and gloom of the economic crisis. The French and Italian socialists came third behind the Greens and the Northern League respectively. However, we must congratulate our Swedish, Danish and Greek sister parties for bucking the anti-left trend. This is, however, cold comfort for the rest of us.

What is even more depressing is that, against the ideological odds, centre-right parties in government managed to weather the storm. In France, Germany, Italy and Poland ruling parties topped the polls. In France, this was particularly striking given that in recent months thousands of people have taken to the streets to protest at Nicolas Sarkozy’s handling of the economic crisis. Two months ago, on his first anniversary in the job, his approval ratings hit a record low, with 64% having a negative opinion of him (according to a BVA poll for L’Express magazine).

So where have we gone wrong on the centre-left and why are voters deserting us or staying at home? Before the global financial crisis, centre-left parties by and large accepted the economic orthodoxy of the free market, provided it was combined with a sizeable welfare state. However, the social market model works well during the good times but during a recession the tension between the demands of the market and social justice are put under considerable strain.

This loss of clarity of purpose meant that our traditional voters have been left wondering exactly what we stand for. In contrast, the centre-right has been successful in effectively adopting the conventional language of the left in calling for more and better regulation to protect us from those bankers who took such disastrous risks with our money. In France and Germany, the centre-right has gone further still by cushioning the impact of unemployment through generous state-funded welfare provisions and short-time working subsidies.

Grasping the nettle of immigration is another defining feature of the centre-right’s success. The recession enabled the right to adopt the classic divide and rule tactic of turning working-class anxiety into racial antagonism. And it works, as so often in the past.

Both Sarkozy and Silvio Berlusconi’s populist, anti-immigration stances have been rewarded. The French president has consistently taken a hard-line, anti-immigration stance. As interior minister, he was accused of fanning the flames of the Paris riots in 2005 when he promised to ‘clean the scum and rabble from the streets with a power hose’. He used language considered by some as racist. Berlusconi recently stated that Italy should not become a multi-ethnic society and congratulated Libya for taking back 500 migrants who were intercepted by Italian vessels out at sea.

Significantly, Angela Merkel supports the French and Italian leaders in their opposition to Turkey’s EU membership and endorsed the European People party’s manifesto reference to the EU as a ‘Judaeo-Christian’ concept.

A variety of national and extreme right parties also fanned the flames of the anti-immigrant mood. Nationalists tend to do well in European elections, but this time some did worryingly well. For the first time in Britain’s history, the BNP was successful in a national election and took two seats. Elsewhere, the success of Italy’s Northern League (which is not only anti-foreigner but even discriminates against southern Italians), the Dutch anti-Islamic Freedom party and the Hungarian anti-Romany Jobbik party was unprecedented.

Dissatisfaction with the centre-left’s response to the recession has been demonstrated in our voters deserting us to vote for the far right or Eurosceptic right in Britain or the Greens and Communists in France. However, many of our traditional voters registered their protest by simply staying at home. They are more disillusioned than the typical centre-right voter because in most cases they have been hit harder by the recession. On average, only 43% of the vast European electorate bothered to exercise their democratic right; the lowest turnout since the European parliament’s first direct elections 30 years ago.

The low turnout is also testament to our failure to explain what our MEPs do and how it affects people’s everyday lives. It seems that one clear trend across the EU was that the majority of voters were indicating a verdict on their national governments as opposed to their European representatives.

Decisions taken in Brussels and Strasbourg still seem remote, even though the parliament is more powerful than at any time in its history. Here in the UK, we should have taken on the anti-Europeans at a time of strength – that is, soon after securing a historic landslide in 1997. We are still paying for our reluctance to do so. Beyond our hysterically anti-European press, we do not even have a website akin to theyworkforyou.com for MEPs. So, even the most interested and inquisitive voters have difficulty finding out how their MEPs are voting.

The anti-EU vote was also incredibly strong this time. Here in the UK, apart from generating a general distrust of mainstream political parties, the MPs’ expenses scandal also awakened a slumbering discontent with MEPs’ allowances and intensified anti-EU sentiment. UKIP’s claim that the EU cost £40m per day was hardhitting, though inaccurate. Any bureaucracy, especially one perceived to be as overly expensive and detached as the EU, is bound to be more unpopular during a recession.

But politics is always about more than just policies and trends. Personalities matter greatly and divided parties get punished at the ballot box. It is hardly surprising that navel gazing is particularly unwelcome when people have lost or are fearful of losing their jobs. The French and Italian socialist parties are riven by division and suffered as a consequence. Here in the UK, high-profile resignations on the eve of the elections worsened an already bad situation.

I am confident that the progressive centre-left has cogent and compelling policies to see us through the downturn. However, we have not been successful in articulating and communicating them. Nor have we adequately addressed our traditional voters’ fears about immigration and challenged the hateful racism of the far right.

There are many lessons that we need to take from these elections, both here and on the continent. We need to sharpen our policies and political antennae. But no matter how good our policies are, if the public loses trust in us and there is disunity in our ranks, we will get punished at the ballot box.