Sunday, June 21, 2009

Europe: The Left's Collapse…In Europe, that is.‏

http://online.wsj.com/article/SB124545309071432827.html

America's self-declared progressives see the U.S. future in Europe's welfare model. Across the Atlantic, meanwhile, voters en masse are dumping the political movement that gave them the nanny state. Hmmm. Of late, the winning political formula in Europe is simple: Promise to ease heavy tax and regulatory burdens and shake up stagnant economies. The welfare system is seen as broken. France's Nicolas Sarkozy and Italy's Silvio Berlusconi took this path to power. In the largest economy, Germany, Chancellor Angela Merkel looks poised to defeat a divided left in September's elections.

Across the Continent, the left is in disarray. France's Socialist Party, which last won a Presidential election in the 1980s, refuses to move to the center -- and further sinks in the polls. Italy's leftist parties compromised themselves in a brief two-year stint in office, before Mr. Berlusconi swept them out in April of last year. The center-left ruling parties in Britain and Spain, which inherited economies revitalized by courageous politicians who implemented free-market ideas, are also in trouble.

Even in a recession so widely attributed to unfettered capitalism, socialists are unable to take advantage. Consider the results last week of elections for the European Parliament. Center-right parties gained in Germany, France, Italy, Belgium, Britain, the Netherlands, Portugal, Spain and across most of eastern Europe. Sweden, Denmark and Greece were exceptions.

It's dangerous to generalize about 27 very different countries. Gordon Brown's Labour Party, in power since 1997, built on Thatcherism and now finds itself blamed for Britain's economic troubles. The new "kinder and gentler" Tories, who have sidelined Lady Thatcher, hold a comfortable lead with elections due within 12 months. Mr. Sarkozy and Ms. Merkel, though incumbents, could blame "Anglo-American capitalism" to make gains in the Parliament elections. The far right, with its bogeymen of globalization and immigration, attracts protest voters who once favored the nostrums of the left.

This political shift hardly portends the second coming of Lady Thatcher, alas. In his three tours at the Palazzo Chigi, Mr. Berlusconi has never found the mettle to push real change. Ms. Merkel, who was forced into a "grand coalition" with the Social Democrats after an inconclusive election in 2005, dropped her plans for a flat tax and other market measures. In this climate, she's not about to revive them. Two years ago, Mr. Sarkozy promised "rupture" with France's statist past and won decisively. A lot of his program has passed, but he is also a chameleon who can sound more the dirigiste than Colbert (Jean-Baptiste, not Stephen).

Except for Britain and certain quarters of Vienna, conservatism in Europe shares little with the Hayekian brand of liberalism. A paternalistic right, along with the socialists, passed restrictive labor codes and created state-run pension and health systems. The welfare state empowered narrow interests to defend the status quo. Before the Obama Administration Euro-fits the U.S. economy, Americans need to know that this model saps economic dynamism and is nearly impossible to fix.

For decades, Europeans have been frustrated with low growth, chronic unemployment and fading competitiveness. The answers tend to come from the right, and successful center-left politicians have embraced market reforms (think Tony Blair). On the Huffington Post earlier this week, columnist Robert Kuttner bemoaned the left's collapse in Europe: "American progressives used to look longingly to Europe, with its stronger trade unions and its more comprehensive social protections. Those are still there, but unraveling under assault." Failure will do that.
Thanks Nurit

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