To say that social democracy is today in crisis across Europe is a statement of the obvious. In the late 1990s, centre-left parties were the dominant force in western Europe, where an astonishing 13 out of 15 countries had social democrats in government. But the halcyon days of Blair, Jospin, Prodi and Schroeder, not to mention Guterres, Kok, Lipponen, Persson, Rasmussen, and Simitis, are long gone. Labour now shares the fate of most European centre-left parties: we languish in opposition.

A few examples are strikingly illustrative. In France, the socialists have not won a national election since 1997. The PvdA in the Netherlands has had an historically poor run of results in 2002, 2006 and 2010, where it has fallen close to 20 per cent of the total vote. In 2009, the German SPD endured its worst electoral performance since the first world war, declining to a mere 23 per cent. In Denmark, social democrats last won a national election in 1998, while in Sweden social democrats (who have governed for 65 of the last 78 years) have just suffered their worst election result since the advent of universal suffrage in 1923, making it the first time ever that the centre-right bloc has won a second term of office. And, of course, in Britain Labour has just had its second worst result since the 1920s in terms of its share of the vote, slipping below 30 per cent for the first time since 1983.

European social democracy faces an almost existential crisis. Many cite mechanical weaknesses as the root cause of decline: the fall in party membership; the diminishing position of the trade unions; the fact that centre-left parties are significantly disadvantaged in terms of their capacity to run, organise and fund election campaigns. The British Labour party is not unique in these respects. Yet to point to these weaknesses is to offer only a partial explanation of decline; a common lack of clear purpose is far more serious.

In the recent Southern Discomfort Again study of southern and Midlands swing seats commissioned by Policy Network, only 37 per cent of voters in Britain were clear about what the Labour party now stood for. This lack of clarity speaks volumes about why the centre-left is struggling. Social democrats struggle to communicate their politics because they themselves are no longer clear what they stand for in an era of rapid globalisation. Three aspects are worth noting.

First, our political economy largely acquiesced in what appeared to be the ideological triumph of the Anglo-American model of capitalism, particularly the deregulation of financial markets. This was based on a twin assumption: on the one hand, the sympathy of big business was a crucial test of electoral ‘competence’; and, on the other, the centre-left’s politics of redistribution would benefit from the tax revenues growth generates. While these policies funded social advance, in truth they sustained a culture of reward, especially in financial services, which undermined basic values of fairness and, among working families in Britain, an upsurge in personal debt. So neither assumption is sustainable.

Second, the nation-state conception of traditional social democracy comes up against the new reality that ‘all politics is global’. While many social democrats recognised interdependence, fought hard for international development and emphasised the new importance of climate change, they failed to come to terms with the full domestic impact of globalisation. This affected good quality, traditional working-class jobs, as sector after sector is forced to adjust to Asian competition. Instead, we argued that the only role for government was to ‘equip people for change’. Of course, there is a lot of truth in this, and active policies for education, skills and modernising welfare are crucial.

However, social democrats failed to develop at a European Union level a proper strategy for globalisation. The obvious gaps were a triple lack of international regulation of financial markets, absence of EU pressure to tackle unsustainable global imbalances, and better corporate governance. Far more could be done in cooperative research to develop new industries of the future and to use the EU’s global weight in trade, not only to open new markets, but to ensure free trade on fairer terms and to promote better social standards.

Third, there are serious dilemmas surrounding immigration and multiculturalism, and the increasing levels of cultural insecurity and uneasiness towards migrant communities experienced by traditional, white working-class voters. The global financial crisis has, of course, exacerbated these tensions, but the cultural uneasiness felt by many voters has been growing for years. These issues have had a huge impact, mostly to the detriment of social democratic parties. This is most notably the case in the Netherlands, where Geert Wilders’ anti-Islam Freedom party, the PVV, increased its share of the vote to 15 per cent to overtake the Christian Democrats as the third party of Dutch politics. But there are other examples, too: the anti-immigrant Democratic party made big gains in Sweden, so much so that they might hold the balance of power in a hung parliament; earlier this month, the far right nearly toppled the incumbent social democratic mayor in Vienna; and, of course, the influence exercised by the semi-fascist Front Nationale in France and rightwing populist Lega Nord in Italy is well known.

What is to be done? Some argue that putting together ‘progressive coalitions’ is the only route back to power. There is certainly some merit in this, not least because of the capacity of such coalitions to re-engage with our disenchanted voters. But to date the success of such coalitions has been, at best, mixed.

In Sweden, for example, one prominent Green has said that ‘no country has proven that it is possible to couple economic growth with responsible natural resource management’. This undermined the capacity of the red-green coalition, headed by Swedish social democrat leader Mona Sahlin, to present a sensible and robust economic policy. Reaching out to leftwing parties has proven equally problematic: 22 per cent of Swedish voters who turned away from the social democrats point to the party’s cooperation with the left, and 44 per cent view the left as having too much influence over social democratic policy. In Germany, attempts by the SPD to forge links with Die Linke have posed similar difficulties.

‘Progressive coalitions’ may prove in future a successful route back to power, but the social democratic element in them has to be both dominant and robust. The compromises involved in embracing green and leftwing values can all too easily heighten suspicion among centrist voters about the centre-left’s ideological competence and economic credibility.

In order to overcome its present malaise,the centre-left needs to come to terms with an uncomfortable truth: that it has lost out to the centre-right during the global financial crisis. The crisis has been redefined successfully and rapidly by the right as a crisis of public debt and government deficits; in other words, culpability lies with the inefficiency of the state, not the inherent instability of financial markets. But electorates have also abandoned the centre-left because it has often appeared evasive and indecisive on crucial questions of economic management during the crisis – they have projected neither competence to tackle present problems, nor a vision to reform the financial system in future.

Ironically, this should be a uniquely social democratic moment. In truth, however, the crisis showed the guiding assumptions of the centre-left’s politics and governing model to be shattered. To regain power across Europe, we must focus on repairing these foundations.

Photo: Socialdemokrater