PARIS, Aug. 10 (UPI) -- France's giant BNP Paribas bank, which took more than $5 billion in state funds to help it through the financial crisis, provoked a political storm when it revealed last week that it was handing out more than $1 billion in bonuses to its staff.
But the attacks came from the center-right government that backs conservative President Nicolas Sarkozy, more loudly and more effectively than from the divided and squabbling opposition Socialist party. It is a strange irony that Europe's traditionally powerful left-wing and social democratic parties seem unable to benefit from the most severe crisis of capitalism since the 1930s.
"Is the PS (Parti Socialiste) going to die? No. It is dead," says prominent French philosopher Bernard-Henri Levy. "No one, or almost no one, dares say it. But everyone, or almost everyone, knows it's true."
What remained of the party that Francois Mitterand repeatedly led to power was a "dead body" that had been taken over by a "reactionary ideology" and was "losing whatever remained of its soul," he said in an interview with the Journal du Dimanche. "The PS does not embody any kind of hope. It provokes merely anger and exasperation."
Britain's Labor Party is still in power but demoralized and divided, and opinion polls suggest it is heading for catastrophic defeat at the next general election under the leadership of the unpopular Prime Minister Gordon Brown. In Germany, the Social Democratic Party is currently the junior member of a coalition government but also appears to be heading for defeat in next month's election.
Ten years ago moderate socialists ruled Britain, France and Germany, Europe's three leading economies, and Britain's Tony Blair claimed to be pioneering a "third way," a new and market-friendly form of progressive politics that would take the traditional parties of the left into a new century. That claim looks hollow today, even though the rising unemployment and bankruptcy statistics and the decline in economic output should be favorable political terrain for the left.
But Europe's labor movement and its parties face three main problems. The first is that higher productivity and automation have shrunk the once-massive labor unions and the industrial working class that formed their political base.
The second problem was that the Socialists proved vulnerable to new political challengers for the "progressive" vote from the Green parties and centrist parties like Britain's Liberal-Democrats and Germany's Free Democrats. At the same time their grip on working-class votes was challenged by new groups from both Left, like France's Trotskyists and Germany's former Communists from what used to be East Germany, and from the populist and anti-immigrant far Right, like the British National Party and France's National Front.
France's Socialists were beaten into third place in the 2002 presidential election by National Front leader Jean-Marie Le Pen. And this summer in the elections to the European Parliament France's Socialists were almost beaten in their share of the popular vote by the Greens, and Britain's Labor party was run close by the anti-European United Kingdom Independence Party. Altogether, Britain's minor parties took an unprecedented 28 percent of the vote.
The third element of the Left's crisis is that Blair's "third way" represented an important ideological shift away from the old faith in public ownership and state control of the commanding heights of the economy. This meant that the old socialist parties were reduced to claiming that they could run a capitalist system more efficiently and more humanely than the parties of capital.
This left the Labor and Social Democratic parties looking just as responsible for the financial crisis and the job losses that came with globalization and low-wage competitions as the traditional conservative parties. It undercut their ability to exploit the current economic difficulties and left them with few alternatives to offer.
So some leading figures on the French left like Manuel Valls, mayor of Evry and a declared candidate for the next presidential election, are openly calling for the party to drop the name "Socialist."
"The French Socialist party is at risk of dying out," claims Valls, 44, one of the party's "next generation" of leaders who openly defy party leader Martine Aubry for lackluster leadership and a "kneejerk anti-Sarkozyism" with no credible policies on hot-button topics from globalized labor markets to immigration and the environment. Aubry's response was to suggest that if Valls felt that way he should leave the party. The party's divisions have become so embarrassingly public that Socialist members of the National Assembly issued a statement urging those "praying for a collective suicide" to stop the infighting.
The beneficiaries of this process -- Europe's conservatives -- are far from complacent. They know they are also vulnerable to populist appeals on unemployment, globalization and swollen bonuses for "fat cat" bankers. They also fear the emergence of new coalitions against them, the kind of "progressive alliance" of the Left and Greens that formed the German government from 1997 to 2005.
In France, that brings a new spotlight onto that old figure of the 1968 Paris student revolts, Daniel Cohn-Bendit, whose Europe Ecologie Party benefited from disillusionment with the traditional Left to beat the Socialists into an embarrassing third place in Paris. Widely popular and good on TV, Cohn-Bendit used to be known as Dany le Rouge (Dany the red) but is now Dany the Green and is the candidate that Sarkozy is said to fear the most in the next presidential election.