Michael Berendt's blog

It’s curious how centre-right governments have come to dominate the political scene as Europe faces its biggest economic crisis for a generation. Given the fierce pressures on public spending, the battle by public sector workers to protect their jobs and pensions, whittling down of welfare programmes and high levels of unemployment, especially among young people, one might have thought that socialist parties would prosper.

Yet the financial crisis has continued to wreak damage to the Left. Spain is just the latest EU country to see a huge change, with Mariano Rajoy’s centre-right Popular Party winning a landslide victory, taking 186 seats out of 350 and leaving the socialists with 110 seats.

Both the UK and Portugal have centre-right coalitions pursuing austerity programmes, and while Italy’s and Greece’s decision to choose a government of technocrats was not exactly the endorsement of a popular vote, it was probably an expression of popular will. Mario Monti enjoyed a standing ovation when introduced to the Senate, while the lower house approved him and his new government by 556 votes to 61. Monti, of course, is a politician in academic clothing, as all who knew him as European commissioner will testify.

As for Athens, the leader of the Greek conservatives, Antonis Samaras, has formally backed the bail-out package previously adopted by George Papandreou’s government. Samaras has now written the crucial commitment letter to Barroso, Juncker, Draghi and Lagarde, which the new administration of Lucas Papademos hopes will release €8 billion from the Stability Facility to take the pressure off Greece.

It’s almost as if socialist parties have nothing to offer in resolving the economic crisis, but then if a political party’s main raison d’être is to redistribute state funds it is certainly difficult to run a policy which means slashing public spending.

Belgium still has the distinction of having no government at all – unless the king can persuade Elio Di Rupo to form an administration in time to agree the 2012 budget. An austerity budget, of course.

The euro crisis dominated the November 18 meeting in Berlin between two centre-right leaders, Britain’s David Cameron and Chancellor Angela Merkel. The mood was variously described as confrontation and compromise, depending on which British and German reports you were reading.

As for Cameron’s advice that the ECB should become lender of last resort, Chancellor Merkel was not interested. It is clear though, that a deal has been struck in the well-established tradition of Europe à la carte. The UK will accept limited treaty modifications to beef up eurozone discipline, and in return will receive a sweetener: “repatriation” of certain policy areas such as maximum working time and the “on-call” rulings which have posed such a problem for Britain’s National Health Service.

“Repatriation” is a word which resonates with eurosceptics and Cameron will hope that this arrangement will suffice to calm down most of those in the Conservative party who would otherwise argue that any treaty change must trigger a referendum on UK membership.

Cameron has stated in a recent speech that he is “a sceptic”, but also said that “leaving the EU is not in our national interest”. He used Norway as the example of a country bound by EU law yet powerless to change it. For a highly topical example he might have had in mind the financial transaction tax, so dear to Angela Merkel’s heart, but anathema to Britain. It does seem likely, though, that Merkel accepted in the Berlin meeting that this would be a non-runner unless agreed on a global basis. She knows that with FTT there can be no treaty change: the UK would block it.

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