Co-operation between European countries – not rivalry – is the only basis for social-democratic renewal.

Terrible weather for social democracy in Europe!

Electoral defeats are accumulating; the number of militants is decreasing everywhere; and the relationship with trade unions and civil society is becoming weaker and weaker.

Of course, these facts should be analysed with caution. Each national situation has its specific character. In Norway, Portugal and Greece socialists have managed to return to, or to remain in, power. And we can expect the same thing to happen in Sweden after the next elections. But it would be absurd to deny the general tendency: European social democrats are undergoing a profound crisis.

The backward flow of the ‘pink wave’ of the period 1996-2002 can be explained by a number of reasons.

One can argue that social-democratic governments such as those of Tony Blair in Great Britain and Göran Persson in Sweden have been naturally worn out by the exercise of power after several consecutive terms. Other explanations include the left’s failure to control the flows and integration of immigrants; and its inability to respond in a convincing way to the demand for order – especially from the popular electorate –  vis-a-vis the rise in criminality, incivilities and disaggregating individualism. Lastly, we can see the defeats of the left as the direct consequence of the successes of the right: many conservative parties have succeeded in renewing their speech, their posture, their leaders, their communication and their alliance strategies. Fredrik Reinfeldt in Sweden, Nicolas Sarkozy in France, David Cameron in Great Britain and Angela Merkel in Germany are the leading figures of this aggiornamento.

All these factors undoubtedly have played a part, but the fundamental reasons for the defeat of social democracy in Europe are – unfortunately – more profound than this. They are to be found in the exhaustion of the ‘social-democratic crisis compromise’ agreed upon in the 1990s. Furthermore, the non-cooperative national strategies that European socialist and social-democratic parties were led to implement at the turn of the century (whether with good grace or bad) have also contributed to the impasse. Confronted with new historical challenges – globalisation, the financialisation of the economy, the rise of emerging countries, the digital revolution, ageing populations, the fragmentation of the wage-earning population, bureaucratisation, the impoverishment of the welfare state – European socialist parties adopted, each in their own way, a new social pact. This defensive compromise combined three elements.

The first was a liberalisation of the economy, varying in form across different countries but present everywhere. In our ‘mixed economies’ the weight of the public sector was reduced, while that of the private sector was strengthened. Socialists accepted a lowering of the costs of labour, in particular in less-skilled jobs, by allowing ‘wage moderation’ and the ‘reconfiguration’ of social benefits with regard to unemployment, health, and retirement. They expected in exchange, from state and industry, more investment and innovation, leading to a more efficient specialisation of our economies in the new international division of labour. They expected an ‘upscaling’ in all sectors of activity, so that they could reinstate full employment and ‘good employment’.

The second pillar of the compromise of the 1990s was the mutualisation of the costs of modernisation. It was believed that these costs should be borne primarily not by individuals but by the nation as a community. This required high levels of taxes and social redistribution, quality public services, a reduced but preserved welfare state, and negotiation between all social partners.

The third element was the affirmation of social progressivism. Socialists were the champions of the liberalisation of mores, gender parity and equality, homosexual marriage, the right to die in dignity, and the defence of the quality of life. Defensive at the economic and social level, the social-democratic compromise of the end of the century was offensive at the societal level.

This political offer underpinned the successes of socialist parties in the second half of the 1990s. Let us not forget that in 2002 11 governments out of 15 in the European Union were socialist. Since then, however, this offer has encountered its limits. The defensive compromise could not prevent the explosion of inequalities, reductions in the level of social protection, and increases in the number of precarious jobs and in the number of working poor.

The 2007-2010 crisis, followed as it will be by a period of weak growth, will condemn this compromise to obsolescence.

If it wants to return to power, European social democracy must propose a new political offer. And such an offer has to be conceived, from its inception, at the level of the European Union. Furthermore it must embody – beyond its economic objectives – a civilisation project.

Socialists know that the major challenges posed by globalised capitalism can only be effectively addressed on a continental scale. However, confronted with the difficulty of this task they have in practice resorted to national strategies, most often non-cooperative ones.

German Social Democrats have accepted heavy sacrifices in order to preserve German industrial power and exporting capacity. As a result, Germany has gained market share, particularly in other EU countries. The British Labour Party has preserved an iniquitous taxation system and extreme labour flexibility so as to make Great Britain a paradise for the financial industry. One could lengthen the list, and the French Socialists would not be excluded from it: they have let public deficits increase and they have financed new social benefits with debt. These policies of the ‘free-for-all’ could be temporarily beneficial to one country or other, but in the end they were prejudicial to the whole. Over the last fifteen years the European Union has been an area of soft growth and high unemployment.

In short, the crisis of social democracy comes from its inability to implement a European response to the challenges of globalisation. Its renewal calls for the revival and the reorientation of Europe. This is because strong and sustainable growth, the protection of workers against all social risks, the fight against global warming, and the regulation of both immigration and globalised capitalism, all require a more voluntary, a more ambitious, and a more social Union.