Analysis: Not Much Left For Europe’s Left

Credit: Reuters/Tobias Schwarz PARIS | Mon Oct 14, 2013 2:33am EDT 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.

Europe stocks waver amid U.S. deadlock, China data

Earnings Wall

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Power Ranking Europe’s Top 10 Clubs

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We are no nearer a resolution in the U.S. and I think its fair to say that the nearer we tick closer to [the debt-ceiling deadline] on Thursday, the more nervous the markets are going to get. Few investors are willing to commit to risk until they know how this will play out, said Richard Hunter, head of equities at Hargreaves Lansdown. Not even the raft of major earnings reports will get investors distracted from the debt ceiling, he said. Government shutdown: Track the latest news out of Washington /conga/story/2013/10/governmentshutdownstream.html 282136 Under normal circumstances earnings would be in focus, but they are unfortunately totally overshadowed by the debt ceiling talks. This week we have Coca-Cola /quotes/zigman/222647/quotes/nls/ko KO +0.12% , Yahoo /quotes/zigman/59898/quotes/nls/yhoo YHOO -0.45% and Google /quotes/zigman/93888/quotes/nls/goog GOOG +0.43% , so quite a host of earnings, but they are just a side story. Among notable movers in the pan-European index on Monday, shares of Peugeot SA /quotes/zigman/165954 FR:UG -9.06% slid 9.1% after the French car maker confirmed it is talking with possible partners for new industrial or commercial projects that will likely have financial consequences . Reuters also reported that the firm is preparing a 3-billion-euro ($4.1 billion) capital increase , citing people familiar with the matter. On a more upbeat note, shares of Electricite de France SA /quotes/zigman/396068 FR:EDF +2.20% climbed 2.2% as the utility firm closed in on sealing a 14-billion-pound ($22.4 billion) deal to build and operate nuclear reactors in the U.K. Heavyweight Vodafone gained 0.8% after the telecom firm said it completed the takeover of Kabel Deutschland Holding AG /quotes/zigman/590596 DE:KD8 +0.30% . U.S. deadlock More broadly, the losses in Europe came 14 days into the U.S. government shutdown and three days before the country is expected to reach its borrowing limit, unless lawmakers break a stalemate and raise the nations debt ceiling. On Sunday, Senate Republicans and Democrats leaders continued attempts to find a way to break the fiscal impasse between the Republican-led House and President Barack Obama. Read: Fed shutdown and your retirement: Remain calm Treasury Secretary Jack Lew has warned the U.S. will run out of borrowing authority on Oct.

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Head coach Richard Cockerill will know he needs to keep 15 men on the field after seeing the way Ulster took advantage while Jordan Crane spent 10 minutes in the bin. Paddy Jackson nailed three penalties while the No. 8 cooled his jets. A decent mauling of Treviso at Welford Road next weekend is now required to get the Tigers in the hunt for qualification. 6. (8) Munster, PRO12 Ian MacNicol/Getty Images Defeat in Edinburgh was not the start Rod Penneys men were looking for. A fired-up Edinburgh were hungry to make amends for a poor start in the PRO12, and they were aided by a litany of Munster errors that left their fans tearing their hair out. Tries from Casey Laulala and Dave Sherry looked to have established Munster in the box seat at Murrayfield, but scrum half Greig Laidlaw was in inspired form for the hosts and amassed 19 points to get Edinburgh back in front. With Gloucester on a high after conquering Perpignan at Kingsholm in Round 1, Munster will have a job on its hands reestablishing itself at home next week, and with away trips to Gloucestershire and Catalonia still to come, a pool that looked a relatively easy route to the top for Munster now appears a more mountainous challenge. 5. (5) Montpellier, Top 14 Mission accomplished for Montpellier in Round 1 of the Heineken Cup. A potential banana skin at Treviso, who have lost just one of their last nine at home, was avoided in businesslike fashion. Leading only 12-3 in the second half, the introduction of the in-form Jonathan Pelissie saw the Frenchmen stretch their lead with a penalty and converted try from the scrum half.