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Has the Euro Crisis Killed Off Social Democracy For Good?

Madrid–Outgoing Socialist Prime Minister Jose Luis Rodríguez Zapatero, of Spain, had until recently been the beneficiary of propitious circumstances. Party infighting enabled him to outmaneuver the establishment favorite in the 2000 primaries. Four years later, he eked out an eleventh hour victory in national elections when a terrorist bombing mere days before voting turned the tide against incumbent conservatives. As he took office, a booming economy—which enjoyed the second largest budget surplus in Europe as late as 2007—paved the way for an ambitious social agenda, which rallied his progressive base.

But if a flair for the unexpected studded his ascent, it was a bruising inevitability that brought him low. A rapidly worsening economic crisis left him with little choice but to announce, in April, that he would not stand for re-election. After months of daily flaying by an emboldened conservative opposition, early elections came as a relief for Zapatero, even as his party blamed him when it was trounced, as expected, two weeks ago.

But Zapatero didn’t fall alone: Center-left governments in Portugal and Greece have also fallen in recent months. All in all, it’s a long-standing trend. Leftist governments in Europe have been teetering now for over a decade. Ten years ago, social democratic governments were at the helm in half the countries of the EU. That number has since dropped to three. But their recent plight is their most dire. The sovereign debt crisis has done more than batter incumbent socialists out of office; it may well have stripped the social democratic movement of its soul in the crisis zone.

Even before the latest crisis hit, it was widely presaged that social democracy was on the wane in Europe. The continent’s working class, fragmented under the pressures of globalization, had already been moving toward alternative parties for a number of years. But the current financial crisis has amplified those trends. The mood is uniformly grim among the continent’s center-left set.

That’s especially the case in the European periphery, where the debt problems are greatest. For left-leaning politicians in countries hurtling toward the precipice of insolvency, there is frightfully little room to alleviate mounting unemployment and anemic growth. “The crisis has shown what was probably true for some time, that these governments have limited scope to determine their own economic policy,” Says Jonathan White, of the London School of Economics.

With bond markets aflutter and Brussels demanding massive spending cuts, incumbent governments have had little choice but to embark on toxically unpopular austerity. In March, Portuguese Socialist José Sócrates was forced to resign when an austerity package was rejected by Parliament. The Greek Prime Minister’s exit, in November, was as precipitous as Zapatero’s was agonizingly protracted. In the meantime, it’s not taken long for the labor party in Ireland to come under fire for reneging on its campaign promise to put national interests first in its now infamous formulation: “Labor’s way or Frankfurt’s way.” And the arrival of technocrats in Italy after the fall of the government of Silvio Berlusconi only underscores how incompatible austerity is with electoral survival: the country’s center-left never even attempted to take the reins of power.

It is clearly not a sustainable situation for Social Democrats. They have lost credibility with the electorate not only because they’ve been virtually impotent in stimulating growth, but also, worse, because austerity has appeared to make them go against their principles. The traditional linchpins of the social democratic agenda—defense of the welfare state, a Keynesian economic vision, responsiveness to a pluralistic electorate—are in tatters. For the Spanish, Portuguese, and Greek Socialists who were forced to make cuts in their respective countries, austerity is their legacy.

Their conservative rivals, by contrast, now have the pretext they’ve been waiting for to cut government spending and privatize swaths of the education and health sectors. EU imperatives pose few ideological problems to these parties, and in the early days they could survey the ravages of the crisis from the higher ground afforded by being in the opposition. Even so, their generic campaign slogans in Portugal and Spain made conservative victories there little more than votes of no confidence to punish incumbent Socialists. Abstention reached 40 percent in Portugal’s June elections. In Spain this November the conservative People’s Party (PP) gained only a half-million votes, still shy of Socialist totals from 2008. Nevertheless, they won an absolute majority because Socialists dropped over 4 million votes.

“Although voters want to maintain the welfare state, they don’t necessarily believe that the government is the best guarantor of the welfare state’s actual benefits,” explained José Ignacio Torreblanca, director of the Madrid branch of the European Council on Foreign Relations. This partly explains voter ambivalence before a grisly political reality: They are turning out one party over austerity and haplessness on the jobs front, while its replacement promises to do more of the same, only with the added zeal brought by large parliamentary majorities.

The problem for the Spanish Socialist Party, as it tries to make sense of its recent defeat, is emblematic of the broader existential quandary facing social democrats across the crisis zone. In Spain the 4 million votes lost by Socialists were spread across the political spectrum, making it hard for the party to know whether to tack leftward or hew to the center in the aftermath of elections. Some votes evaporated into abstention, others went to the PP, and still more went to two alternative parties whose growing strength bespeaks widening fault lines in the center-left coalition. (One of the parties is the left-wing Izquierda Unida, and the other is the newly constituted UPyD, a more centrist Socialist offshoot formed by disgruntled members of the party.) The Socialists’ dilemma “is a bit like a blanket that’s not big enough to cover you completely,” said Torreblanca. “You pull it down to cover your feet, and are left exposed somewhere else. The problem, in a word, is that the blanket is just not big enough to cover [such diverse constituencies and varied grievances].”

Writers like Fernando Berlin, who is currently at work on a book about Socialism in Spain, are not entirely despondent about the party’s chances to regroup. The outgoing Socialist government, he maintained, “was, at least in its first term, the country’s most progressive to date in terms of social issues.” The public might still be able to forgive the party its bout of austerity as the extent of the conservative hard line becomes clearer. But in any case, said Berlin, “Spanish socialists have to construct a program that goes beyond the economy”: Reviving social issues is the only thing to distinguish them from conservative rivals.

What the economic and political crisis has laid bare, finally, is how brittle the social democratic tradition really is in parts of Europe. “Socialism in southern Europe has been a reactionary movement to prevailing autocracies and conservative traditions,” according to regional expert Joan Costa-Font, “and hence it evolves with how conservatism pans out.” Much of the cohesion on the left in Spain, Portugal, and Greece derived from mutual investment in overcoming despotic rule, but this made Socialist coalitions, which extended from leftists to economic liberals of the center, a somewhat porous ideological union. Any cues taken from historic founts among British Fabians and German Social Democrats, explained Costa-Font, have dissipated as these movements also find themselves in crisis.

EU policy is a kind of Maginot Line of fiscal conservatism, and social democrats in the crisis zone, under the watch of the markets and Brussels, have stumbled off into the opposition. Better to be there, perhaps, than to be held hostage while in office. It may be safest for them to weather this crisis outside the public eye.

Jonathan Blitzer is a journalist living in Madrid.