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To get a sense of how the financial turmoil and economic recession are reshaping European politics, take a look at the socialists’ manifesto for next June’s European Parliament elections. “This crisis marks the end of a conservative era of badly regulated markets. Conservatives believe in a market society and letting the rich get richer, to the detriment of everyone else. We believe in a social market economy…”

When they plotted their strategy, socialist leaders across Europe clearly decided that their best line of rhetorical attack would be to paint their opponents as reckless advocates of unrestrained free market economics. “The conservatives often talk about economic and social crises as if they are unavoidable, a law of nature… Conservatives have pursued a policy of blind faith in the market - serving the interests of the few rather than the general public…”

The manifesto was agreed this week at a conference in Madrid by leaders as varied as Prime Minister José Luis Rodríguez Zapatero of Spain; Martine Aubry, the newly crowned leader of the French socialists; Sergei Stanishev, Bulgaria’s prime minister; and Gediminas Kirkilas, Lithuania’s outgoing premier.

For Europe’s humbled financial institutions, the manifesto proposes “rigorous capital requirements”, limits on borrowing and bad loans to prevent excessive risk-taking, caps on executive pay and bonuses, curbs on short-selling, stronger regulation of hedge funds and private equity funds, and an end to “tax havens, tax avoidance scams and tax evasion”.

Some of these measures are already in the works at European Union level, and in a sense it’s disappointing to see the socialists shrink from proposing more imaginative steps that would marry the need for better regulation with acceptance of innovation as a fact of financial life.

Nevertheless, the socialists do go further in other areas, for example by calling for a “European Social Progress Pact”. This would require that every piece of EU legislation include a “social progress clause” - that is, something setting out goals and standards in the fields of social policy, health and education. Potentially, pretty expensive.

The socialists also propose a European pact on wages, establishing “decent minimum wages” in all EU member-states, and “a European framework for cross-border collective bargaining and collective agreements”. There are some veiled hints at trade protectionism, as in their support for steps that would prevent energy-intensive industries in Europe from relocating to parts of the world where climate change policies are less strict (read: China and other Asian countries).

Because of the European Parliament’s growing importance in framing EU laws, it is important to listen to what the socialists are saying. At present they have 215 seats in the legislature, compared with 288 for the centre-right group and 101 for the liberal group. But they will surely increase their presence after the June vote.

And then, who knows? Perhaps they will be strong enough to bring their ideas to bear on the membership and political direction of the next European Commission, due to be chosen less than a year from now. Then we will really know that we’re in a new era.

December 3rd, 2008 in European Parliament, Financial crisis, elections 2009 | Permalink