By Paul Taylor
PARIS (Reuters) - What is left for Europe's mainstream center-left?
Socialist and social democratic parties that shaped the protective European social model and ruled much of the continent a decade ago have been among the chief political casualties of the financial and economic crisis since 2008.
More than just a cyclical trough, this may be a longer-term decline because the left has lost its political narrative.
Many young and blue-collar voters, angry over mass unemployment and spending cuts, have deserted to protest parties of the anti-capitalist hard left or the Eurosceptical, anti-immigrant far right, as the political landscape fragments, polling evidence shows.
Others trust middle-of-the-road conservatives such as German Chancellor Angela Merkel more than the left to run the economy in tough times. And some have simply stopped voting out of disillusionment.
Most worryingly for a movement born in the 19th century of organized labor's struggle for better working conditions and living standards, the belief in collective social progress has lost much of its credibility in mature advanced economies.
Income inequality has increased across the industrialized West since the crisis began, according to OECD figures, widening social gaps that the left set out to close.
"Social democracy nowadays basically amounts to the defense of the status quo and preventing the worst," says Olaf Cramme, director of Policy Network, a think-tank for progressive center-left politics.
Germany's opposition Social Democrats (SPD) have just recorded their second worst election result since World War Two.
They now face an ugly trilemma between entering a "grand coalition" under Merkel on unequal terms, staying out and seeing her possibly team up with the Greens, the SPD's natural partner, or being punished by voters at a rerun election.
Socialists or social democrats still head 13 of the 28 EU governments and are in coalition in five others, but they are often driven to pursue unpopular policies that hit the interests of their own electorate.
"It is an extremely difficult balance," Social Democratic Danish Prime Minister Helle Thorning-Schmidt told Reuters in an interview. "We had some reforms that have been seen as quite harsh, but they have also been necessary.
"I think we have found the right formula, not to be popular because we have not actually reached that yet, but to do the right thing for the country," she said.
Austria's Socialists lost votes last month, though they remain the largest party. Italy's center-left Democratic Party, which now heads a shaky left-right coalition, bled votes to the anti-establishment 5-Star protest movement in a February election and is driven by factional squabbling.
In Greece, Ireland and Spain, center-left parties are paying a high electoral price for having supported public pay and pension cuts required by international creditors.
FEWER MEMBERS, LESS MONEY
In Britain, the opposition Labour party is still distrusted because it presided over a deregulated financial market bonanza that ended in the crash of 2008, wrecking the reputation for economic competence once built by Tony Blair and Gordon Brown.
In France, one of the few countries with an absolute center-left parliamentary majority, Socialist President Francois Hollande is deeply unpopular as his government dithers between old-style tax-and-spend policies and half-hearted welfare and labor market reforms, satisfying no one.
With the membership and funding of mainstream parties dwindling in many countries, the center-left has rarely kept pace with new vectors of political action via social media and grassroots initiatives.
Some of the center-left's woes may be temporary. When voters tire of center-right governments implementing austerity policies and scandal and attrition in office take their toll, the pendulum may swing back to the mainstream opposition.
But the center-left can no longer offer much prospect of a rosier future through state intervention.
There are fewer fruits of economic growth to redistribute, globalization continues to exert downward pressure on wages and working conditions in developed countries, and the demographics of ageing societies with shrinking workforces make welfare benefits and pensions ever harder to sustain.
Compounding the left's problems, some conservative leaders such as Merkel and Swedish Prime Minister Fredrik Reinfeldt have successfully occupied the middle ground.
"(Merkel) has taken any political polarization away by reverse-engineering the social democratic Third Way strategy," said Henning Meyer, editor of the Social Europe Journal.
"Similar to what Tony Blair and Gerhard Schroeder did in the 1990s and 2000s, she has adopted the most popular policies of her opponents - at least rhetorically."
Merkel embraced the phasing out of nuclear power, increased public spending on childcare and family benefits and offered a watered-down form of minimum wage to neutralize the center-left.
A lurch to the left did not help the SPD regain much ground as core voters are still angry over painful reforms in the last decade that cut unemployment benefits and raised the retirement age, even though they are now credited with restoring German competitiveness.
CREDIBLE SOCIAL JUSTICE?
The policy dilemma confronting the European left is how to offer a credible, modern vision of social justice.
Reformers such as Policy Network's Cramme argue that the only salvation lies in emphasising "pre-distribution" through investment in childcare, education and job training, rather than perpetuating blanket welfare handouts.
"Defending acquired rights may be legitimate, but it no longer makes you a catch-all people's party," Cramme said. "If you want to be a big-tent party again, you will have to combine reformist elements with social protection."
This leaves the center-left with awkward choices.
Its big batallions of supporters tend to be among public employees and unionized industrial workers with strong job protection and secure pensions who fear privatization, and resist easier hire-and-fire regulations and later retirement.
In some northern European countries such as Denmark, social democratic parties have pinned their fate on embracing an open, globalised economy and making social protection more selective.
"We are trying to do four things at the same time," Thorning-Schmidt said in an interview in her Copenhagen office, drawing four points on a piece of paper.
"Fiscal constraint - call it austerity - (and) on the other side growth measures. Then social welfare for the most in need and the restructuring of our welfare model."
The Dutch Labour party is the latest to risk electoral wrath by embracing a long-term shift from a generous welfare state to a "participatory society" in which people provide for themselves more, as outlined in the king's speech to parliament last month.
The SPD's bitter experience of being flayed at the polls for Schroeder's reforms may explain why France's Hollande and British Labour party leader Ed Miliband are espousing a more traditional left-wing platform, despite conventional wisdom that elections are won in the center.
(Additional reporting by Alistair Scrutton in Copenhagen; Editing by Louise Ireland)