Europe's Leftist Dinosaurs Are in Trouble

Europe's Leftist Dinosaurs Are in Trouble
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The moderate left is faltering in many countries in Europe. From Spain to France, to Denmark and the Netherlands, and down in Greece and the Czech Republic, mainstream leftist parties are either languishing in opposition or lagging in opinion polls. Part of the problem is the mainstream left's lack of new ideas.

Take French President Francois Hollande as an example. When he was appointed president, his Parti Socialiste was riding high in the polls. These days, however, the French socialists are losing election after election while Hollande suffers in opinion polls.

At first glance, Hollande's main problem would seem to be his inability to deliver on promises made to voters, especially after a failed tax scheme on high earners spread disillusion among his base. But the old socialdemocratic way of taxing and spending the economy out of the doldrums wasn't working, and Hollande had no plan B.

Hollande's plight is mirrored throughout the European moderate left. In Denmark, the coalition government of Helle Thorning-Schmidt looks set to lose the next elections. In the Netherlands, the ruling PvdA has dropped to record-low levels in polls. In Spain, the PSOE, which sits in the opposition, is lagging behind the new, radical-left party Podemos. In Greece, Pasok has become a political zombie, while the ruling radical-left Syriza performs well in the polls.

Complaints among leftist voters seem to be the same everywhere. Their parties are either undertaking highly unpopular reforms that are associated more with the austerity policies of right-wing parties, or they are trying to implement half-baked Keynesian tax-and-spend policies. Either way, the disillusionment among left-wing voters is the same.

It is no coincidence that most of these troubled parties are in highly developed European countries with costly government-run welfare schemes. With treasury coffers empty after the destructive credit crisis of 2008, and tight budget rules constraining governance in eurozone countries, replicating the expansive policies of Japan and the United States (which under President Barack Obama spent a total of $4.7 trillion in direct and indirect stimulus) is nearly impossible. U.S. national debt stands at almost 100 percent of gross domestic product, while Japan's is well north of 200 percent. The U.S. economy is growing, while Japan's is showing signs of life after flatlining for almost two decades.

European left-wing parties are well aware of the problem. Leftist think tanks, economists and political scientists have for years sought the Holy Grail of new progressive politics. Should the focus be on what is called pre-distribution (higher wages, a living wage, lowering the burden of health care costs) or classic redistribution through progressive tax systems? Or perhaps a mix of both?

In countries where taxes are already high, progressive-tax redistribution is increasingly unpopular, including among leftist middle-class voters who realize that they too are in the higher income brackets. Pre-distribution policies, meanwhile, are unpopular in business circles, as higher wages will reduce competitiveness.

If the moderate left wants to prevent being crushed between right-wing parties and the radical left, it needs new ideas. Plans and concepts that keep welfare systems alive through reform without adding too much to the burden of taxpayers and keeping people in the low income brackets out of poverty at the same time.

It is a tough challenge, but one the moderate left has to face.

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