One reason why the eurozone is sliding into ever deeper trouble is because its political and bureaucratic elites do not like, do not understand and have no wish to understand financial markets.  This is an attitude embedded in European history and culture.  Think of the 1793 Law of the General Maximum, an arbitrary attempt to fix prices at the height of the French Revolution.  Or think of the social status attached for the past 150 years to being a state-employed soldier, teacher, office clerk or railway worker rather than a banker in Germany.

One frequently aired proposal for overcoming the ever more dangerous strains in European monetary union is to encourage Germany, which enjoys a large current account surplus, to buy more from Greece and other southern European countries struggling with large deficits.  This, so the argument goes, would rectify the imbalances that are destabilising the eurozone and would demonstrate Germany’s sense of responsibility and solidarity with its 15 euro area partners.

With Prime Minister Gordon Brown’s ruling Labour party heading towards defeat in Thursday’s British general election, the European left may soon be in even worse condition than it was just one year ago.  The trouble started in last June’s European Parliament elections, when centre-right parties swept to victory in the European Union’s six biggest countries – France, Germany, Italy, Poland, Spain and the UK.

Then came the Social Democrats’ crushing defeat in September’s German election: the SPD took a mere 23 per cent of the vote, its worst result in the Federal Republic’s 60-year history.  Finally, Hungary’s ruling socialists were decimated last month in an election that saw the triumph of the centre-right Fidesz party and a strong performance by the ultra-right Jobbik party.

During this period, the centre-left has almost dropped out of sight in Italy in spite of Silvio Berlusconi’s difficulties as premier.  Spain’s socialist government is floundering as Europe’s sovereign debt crisis spreads across the Mediterranean like a Gulf of Mexico oil slick.  The French left did well in regional elections in March, but regional polls take place in different contexts from national parliamentary and presidential elections in France.

Joerg Forbrig, a political analyst at the German Marshall Fund of the United States, thinks there is a pattern to the recent election results.  Traditional social democracy is in decline, he says.  “This weakening of the moderate left, once a bulwark of European democracies, will have massive repercussions for political processes, institutions and culture on the continent.  Among others, it heralds fragmentation in European party systems, complicating and drawing out coalition-building and making continuity of governance more difficult.”

I would make three additional points.  First, the past year’s election results show that European citizens – or at least those who can be bothered to vote – tend, in a severe economic crisis, to put more faith in centre-right parties than those of the centre-left.  This is all the more true when centre-right politicians make clear, as they have done in Germany, for example, that they will shelter citizens from the worst effects of the crisis by protecting their jobs and welfare entitlements.

My second point is that, to a certain extent, Europe’s election results illustrate nothing more than that voters enjoy punishing incumbent parties, particularly ones that have governed for a long time.  This is undoubtedly what is contributing to Labour’s demise in the UK.  Perhaps we should not speak too soon, since we could easily end up with a hung parliament.  But a weighted average of recent opinion polls on Tuesday put the Conservatives on 35 per cent, the Liberal Democrats on 28 per cent and Labour on 27 per cent.

Lastly, the centre-left is by no means in retreat everywhere in Europe.  In the Czech and Slovak election campaigns, for instance, the centre-left is well ahead in the polls.  A month before the June 9 parliamentary election in the Netherlands, the Labour party is neck and neck or slightly ahead of the moderate right-wing VVD party.  The far-right, anti-Islamic Freedom party of Geert Wilders is trailing in fourth place. 

Let us also not forget that the socialist Pasok party won a convincing election victory last October in Greece.  It is another matter, of course, whether the drastic austerity measures contained in Pasok’s IMF-eurozone plan to avoid national bankruptcy will serve as a strong advertisement for socialism.

Better late than never.  That is one way of looking at the three-year, €110bn rescue plan for Greece that was announced on Sunday by eurozone governments and the International Monetary Fund.  It took seven months of indecision, bickering and ever-mounting chaos on the bond markets for the eurozone to get there, but in the end it did – and it may just have saved European monetary union as a result.

Looked at in a different light, however, the rescue package does not appear to be such a masterstroke.  For its underlying premises are, first, that there should under no circumstances be a restructuring of Greek government debt, and secondly, that Greece’s troubles are unique to itself and need not be considered in a context of wider eurozone instability.  Both premises are open to question.

With good reason the eurozone’s political leaders have been criticised for reacting too slowly to the Greek sovereign debt crisis.  But what’s new about that?  Slowness often seems to be a defining feature of Europe’s approach to policymaking.

Consider the proposals that are in the air for the creation of a European Monetary Fund to manage Greek-style crises in the future.  There is widespread support for such a fund, ranging from the European Commission to Wolfgang Schäuble, Germany’s centre-right finance minister, and socialists in the European Parliament.

Nothing captures Germany’s anger and frustration with Greece better than the story – if you can call it that – in Tuesday’s Bild, the mass-circulation German tabloid.  “Goodbye, euro. Bild gives the drachma back to the bankrupt Greeks.”  Beneath the headline is a picture of a well-dressed, bespectacled young man, presumably German, handing a wad of drachmas – a defunct currency – to a rather frightened-looking, middle-aged Greek lady.  The message is brutally clear: we Germans don’t want to share the same money as you lot.  Drop out of the eurozone and leave us alone.

If the Greek debt crisis is teaching the European Union some harsh lessons about the design of its monetary union, no less serious is the message coming from Ukraine about the effectiveness of EU foreign policy.  Viktor Yanukovich, Ukraine’s newly elected president, agreed a deal with President Dmitry Medvedev of Russia last week that gave Moscow a 25-year extension of the right to station its Black Sea fleet in Ukraine’s Crimean peninsula.  In return, Ukraine secured a 30 per cent cut in the price of Russian gas deliveries.

George Papandreou, Greece’s socialist prime minister, is an honourable and courageous politician who has done a great deal in his career to improve his country’s image in the eyes of its European Union partners.  So it cannot have been easy for him to announce today that he was requesting the activation of the €40bn-€45bn eurozone-International Monetary Fund financial rescue package for Greece.

No eurozone member-state has suffered such a humiliation since the euro’s launch in January 1999.  But Papandreou must have feared, as soon as he took office after last October’s election, that emergency foreign assistance was going to be necessary.

The Greek public finances were in even more desperate condition than anyone could have guessed.  The 2009 budget deficit, it was revealed on Thursday, was 13.6 per cent of gross domestic product – and may turn out to have been even higher.  The 2009 public debt amounted to a colossal 115.1 per cent of GDP, up sharply from 99.2 per cent in 2008.

The fundamental causes of this mess lie in Greece itself, and it is to Papandreou’s credit that he has not been afraid to say this to his countrymen in one public appearance after another since he took over as premier.  He also won the respect of his fellow EU leaders by acknowledging frankly at a summit in December that corruption was at the core of Greece’s problems.

As Papandreou knows, this is where Greeks really need to take a hard look at themselves and the way they have behaved, especially in matters of taxation, public sector contracts and employment in the state administration, for many decades.  His government has introduced severe austerity measures, and it can now count on massive financial support from Europe and the IMF.  But all this will count for nothing if Greeks don’t make an honest effort at cleaning up their act.

And the truth is, this is a challenge that will last an entire generation.

The election of Dervis Eroglu as Turkish Cypriot president appears at first sight to deal a severe blow to the latest United Nations-sponsored efforts at solving the Cyprus problem.  But appearances can be deceptive.  There may, in fact, be an opportunity for a breakthrough.  Crucially, however, it will require the involvement of the European Union.

Eroglu, 72, is usually dubbed a “hardline nationalist” in the international media on account of his long-standing commitment to Turkish Cypriot independence.  This is to miss the point that the Turkish Cypriots are economically dependent on Turkey and Eroglu can hardly act in defiance of the government in Ankara.  It is in the Turks’ wider diplomatic interests to bring about a Cyprus settlement.  They have already made it plain to Eroglu that they expect him to behave constructively.

Nevertheless, Eroglu is clearly a different character to Mehmet Ali Talat, the outgoing president whom he defeated in Sunday’s election.  Talat has held 18 months of talks with Demetris Christofias, the Greek Cypriot president, in an attempt to break the deadlock in the Cyprus dispute.  Some progress has been made, but overall the talks have been slower and more difficult than hoped for.  In certain respects Cyprus has barely changed since 1974, when Turkey invaded the island’s north in response to a Greek-inspired coup aimed at unifying Cyprus with Greece.

How does the EU fit into the picture?  One important obstacle to a settlement has been the refusal of the Greek Cypriot-controlled government of Cyprus to permit the EU to establish direct trade links with the Turkish Cypriots.  This has had serious consequences for Turkey’s EU membership bid, because Ankara responded by refusing to allow Greek Cypriot traffic access to Turkish ports and airports.  The EU punished Turkey by freezing negotiations on eight of the 35 policy chapters that must be closed before a country can join the bloc.  As a result, Turkey’s accession talks are slowing to a crawl and Turkish public opinion is losing faith in the EU.

Fortunately, there now exists a chance to clean up this mess.  Because the EU’s newly adopted Lisbon treaty gives the European Parliament a voice in trade policy for the first time, the Commission is asking the assembly to approve a directive setting up trade links between the EU and the Turkish Cypriots.  If passed, the directive will go to EU national governments, which can adopt it if necessary by a qualified majority.  In other words, the Greek Cypriots will no longer be able to play their blocking game.

If all went well, one could imagine approval of the trade directive, a Turkish decision to open ports and airports to Greek Cypriot traffic, and a new impetus to Turkey’s EU membership talks.  In such circumstances, it would be easier to make progress on the core problems of the Cyprus dispute.  Does all this sound too good to be true?  Perhaps.  But that’s what they used to say about the fall of the Berlin Wall and the end of apartheid in South Africa.  The Cyprus dispute is not insoluble – but a solution will require the EU to pull its weight.

Viewed from Brussels, the rise of Nick Clegg and his Liberal Democrats in Britain’s election campaign is a fantasy come true.  For most of its 37 years in the European Union, Britain has been the bloc’s most awkward, cussed member-state.  Now, the unthinkable is happening.  Britain’s opinion polls are topped by a party whose leader spent five years working at the European Commission and another five years as a MEP in the European Parliament.  Gott im Himmel!  A Brit who actually understands the place!

And it doesn’t stop there.  Clegg studied at the elite College of Europe in Bruges, an institution geared to producing crop after crop of graduates with a lifelong enthusiasm for EU integration.  He speaks Dutch, French, German and Spanish, making him as proficient a linguist as such dedicated Europeans as Herman Van Rompuy, the EU’s full-time president, and Jean-Claude Juncker, the Luxembourg premier.

Clegg has a Dutch mother, a half-Russian father and three children called Antonio, Alberto and Miguel.  There has been no British party leader like him since the EU’s 1957 Treaty of Rome.  In fact, you may have to go all the way back to Charles James Fox, the Whig who briefly served as foreign secretary in the Napoleonic wars, to find a British statesman whose mental outlook was so naturally rooted in Europe.  Bliss was it in that dawn to be alive!  Clegg’s emergence is enough to make even the most agnostic Eurocrat think that there must be a god, after all.

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Peter Spiegel is the FT's Brussels bureau chief. He returned to the FT in August 2010 after spending five years covering foreign policy and national security issues from Washington for the Wall Street Journal and the Los Angeles Times, focusing on the wars in Iraq and Afghanistan. He first joined the FT in 1999 covering business regulation and corporate crime in its Washington bureau, before spending four years covering military affairs and the defence industry in London and Washington.

Joshua Chaffin is one of the FT's EU correspondents, covering areas including policies on trade, the environment and energy. He has worked in the FT's Brussels bureau since late 2008 and before that was an FT correspondent in New York and Washington DC.

Alex Barker is EU correspondent, covering the single market, financial regulation and competition. He was formerly an FT political correspondent in the UK and joined the FT in 2005.

Stanley Pignal is Brussels correspondent for the Financial Times, covering EU justice, home affairs, social developments, telecoms and the Benelux region. He joined the bureau in January 2009, having previously worked for the FT as a corporate reporter in London.

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