At first glance, European social democracy appears to be in crisis. Gordon Brown’s slump in the United Kingdom; the brutal shock of Spain’s economic downturn; the difficulties of renewing Socialist leadership in France; the collapse of the center-left coalition in Italy; and severe infighting within Germany’s SPD: all point to social democracy’s seeming inability to seize the opportunity – which the current financial crisis should present – to exert greater influence.
But the simultaneous occurrence and high visibility of these problems is less significant than they appear. Mistakes or clumsiness in governance are not exclusive to the left: Belgium is paralyzed by the threat of break-up, Austria is still looking to cement an unlikely conservative coalition, Poland is struggling to find a steady balance for its numerous reactionary impulses, and the French president is hitting record lows in terms of popularity.
Two factors help to explain current European uncertainties. First, there is the economic and financial crisis that we are only slowly overcoming. Second, there is the way in which the media are covering it. The combination of the two is, I believe, behind the feeling of powerlessness that is now affecting the whole of Europe, and that may appear to characterize social democracy in particular.
In reporting on the crisis, the media have placed too much emphasis on finance alone, and have paid insufficient attention to the marked slowing of economic growth. But it is the economic slowdown that renders all developed countries less resistant to the financial shocks resulting from the sub-prime problem and from the mixed loan packages that are then used to dilute the risks attached to sub-prime debt. Indeed, the combination of banking uncertainties, slower growth, and the heightened risk of underemployment and casual labor creates the political weakness now visible in the UK, Spain, Italy, and elsewhere.