Europe's Conservative Confusion

Nearly every government on the continent is center-right. So

why can't they get along and figure out how to save the EU

economies?

BY TYSON BARKER | AUGUST 12, 2011

The European market collapse this past week has not just wiped out stockholders' investments --

it's helping to further stamp out the last remnants of center-left parties across the continent. But

while Europe's conservatives may be enjoying this unipolar moment, their confused approach to

the continent's economic woes could be sowing the seeds of their own demise.

The European Union is already blanketed in the proverbial red of the center-right. It dominates

governments in 22 of the 27 EU member states. From Rome to Riga, from Bratislava to Berlin,

conservative hegemony has imposed itself across the continent. The eurozone's three largest

economies, those of Germany, France, and Italy, and the two largest EU member states outside

the eurozone, Britain and Poland, are all governed by the right.

The latest episode in the dismal saga of Europe's center-left began on July 30, when Spanish

Prime Minister José Luis Rodríguez Zapatero announced that early elections would be held in

November. The vote will mark the end of Europe's longest-serving Socialist government.

Although the Socialists' prospects had been improving, the conservative Spanish People's Party,

under the leadership of Mariano Rajoy, is now expected to sweep to victory. With 21 percent

unemployment, anemic 1.3 percent annual growth, and interest rates on its 10-year bonds at

more than 6 percent (and rising), Spain is ripe for political change.

With that, Europe's last major center-left government will disappear. Daniel Hannan, a Tory

member of the European Parliament, gleefully calculated that a Rajoy win would mean the

center-right governs 96 percent of EU citizenry.

The scene at the leading EU institutions in Brussels is no different. The emergency European

Council meeting on July 21 to agree on the terms for a second Greek bailout and more flexible

crisis-management mechanisms resembled a conservative junta. The main players at the table --

German Chancellor Angela Merkel and her seasoned finance minister, Wolfgang Schäuble;

French President Nicolas Sarkozy; International Monetary Fund Managing Director Christine

Lagarde; Jean-Claude Juncker, chairman of the Eurogroup of finance ministers; and the denizens

of the Eurocracy, European Commission President José Manuel Barroso, European Council

President Herman Van Rompuy, and European Parliament President Jerzy Buzek -- all hail from

the same political family.

But astonishingly, conservative dominance has not translated into any significant changes to

Europe's social contract. As bond markets have made painfully clear, the veneer of hegemony

has not led to decisive, political action during the crisis. Despite control over EU political

decision-making, Europe's conservatives have been unable to shepherd through a consistent

vision of a post-crisis European Union. "Muddling" has become the European catchword of the

summer of 2011.

Germany tried to convince its eurozone partners to adopt its idea of a "debt brake," for example,

as part of a new EU competitiveness pact in February. The "brake," a quasi-balanced budget

amendment written into the German Constitution in 2009, limits the annual public deficit to 0.35

percent of GDP. Berlin, however, failed to convince member states of the proposal, and it was

nixed in negotiations.

This failure is par for the course. Europe's conservative leadership has been stuck on the most

salient issues that dictate the future of eurozone governance -- wage indexation, private-sector

participation in sovereign bailouts, raising retirement ages, the introduction of eurobonds, and

the ability of the European Financial Stability Facility to purchase sovereign bonds on the

secondary market and recapitalize banks.

Rather than ideology, geography and national political culture define EU political fault lines.

Stalwart northerners are pitted against decadent southerners, almost all of whom are

conservatives. These forces are now contending with populist Euroskepticism, which is blocking

compromise and tying the hands of European governments. Nowhere is this more evident than in

Germany. Even as the European press hammers Merkel for the glacial pace of her response to

the eurozone crisis, her coalition partners -- the Bavarian Christian Socialists and even the

traditionally pro-European liberal Free Democratic Party -- flirt with the populist backlash

against the profligate states of Southern Europe. In France, the Netherlands, and Finland, forces

on the right have also capitalized on a perceived ideological impurity of government leaders

siphoning off support from center-right governing coalitions and forcing them to make deep

concessions on potential bailout proposals.

But while Europe's center-left has been relegated to the margins of policy decision-making, it is

laying the framework for a return to power. Europe's social democrats are wrapping themselves

in the mantle of European integration, guaranteeing the continent's more beleaguered states

access to capital markets, with the backing of strong and comprehensive cross-border banking

laws. In a joint statement released in July, a group of Social Democratic leaders in the eurozone

declared that their goal was to "demonstrate that another Europe is possible: a Europe that acts

decisively and collectively." For them, this Europe would include eurobonds, an EU tax on

speculation, an independent European credit-rating agency, and a European investment strategy.

This cohesiveness is proving fruitful. The leadership of the German Social Democratic Party

(SPD) held a news conference in late July in which it cast off the party's occasional ambivalence

toward the European project and committed itself to further European integration. The party

offered Merkel political support for bold action on a European solution to the eurozone crisis,

even if it is domestically unpopular and difficult for her coalition to support. The offer of a sort

of de facto grand coalition was at once a post-partisan gesture and a subtle cue to voters of the

more visionary leadership that an SPD-led government could offer. Recent polls in Germany

give an SPD-led coalition its largest base of support since the end of the Cold War. The Social

Democrats and the Greens would receive 51 percent of the vote compared with the current

governing coalition, which would garner 36 percent.

Next spring's French presidential election could also see a center-left revival. Both first-tier

Socialist candidates, François Hollande, himself a former member of the European Parliament,

and Martine Aubry, the daughter of one of the patriarchs of European integration, Jacques

Delors, lead in hypothetical first-round presidential election polls. Either one would beat Sarkozy

by 16 to 20 percentage points in a second round. In Italy, there is increasingly a sense that the

conservative government of Prime Minister Silvio Berlusconi is living on borrowed time.

In addition, Europe's mass movements are a growing political force coming from the left. Spain's

"Indignados," a progressive protest movement calling for an end to the two-party monopoly in

Spanish politics, has held mass demonstrations across the country. Germany's Stuttgart 21

protesters have similarly organized grassroots demonstrations against an urban railway project in

the conservative southern state of Baden-Württemberg, leading to Greens' electoral takeover

there. Movements like these are transforming frustration into concentrated political mobilization.

In the coming year, the European Union will be forced to confront the inconvenient decisions

that it has put off since the creation of the euro in 1999. Europe's conservatives have so far

botched their opportunity to leave a permanent stamp on the continent's political landscape.

Their consistent dithering may soon hand the center-left a unipolar moment of its own.

Tyson Barker is director of transatlantic relations at the Bertelsmann Foundation.

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