Are Europe's conservatives now dependent on the far right?

Yesterday’s news that the government of Dutch Prime Minister Mark Rutte had collapsed sent almost immediate shock waves through the world’s financial markets.

Investors, who were already feeling skittish about the first-round victory of French Socialist presidential candidate Francois Hollande on Sunday, found themselves with something much more serious to worry about. The government of the Netherlands, one of the core austerity-pushing states of the Eurozone, couldn’t even pass the tough medicine they helped design for Europe.

Holland and the three other euro-using countries that still have triple A ratings (Germany, Finland and Austria) have pushed for every eurozone country to make massive cuts by the end of the month. But yesterday Rutte was forced to tender his resignation after it became clear he could not get his own parliament to approve the tough medicine he had helped design for all of Europe.

But perhaps more interesting from a political perspective is who it was that precipitated this crisis – the infamous far right leader GeertWilders. Rutte was only able to form his governing coalition in 2010 by relying on the backing of Wilders and his far right Party of Freedom group, which had polled at 15.5% in that year's election. Wilders has been tried in the Netherlands for hate speech against Muslims, and has been banned from entering the UK in the past.

Sakozy loses French Senate to the Left

Small signs of hopes for the European left continue to mount. In a vote over the weekend the French Senate changed hands from Nicolas Sarkozy's centre-right UMP party to the Socialists. It is the first time that the Senate has ever been out of the centre-right's control since the creation of the current French state in 1958, and it is a stunning setback for the French president just seven months ahead of France's general election.

So is this outcome a harbinger of a wider reascendance to power for the left, not only in France but also in Europe as a whole? Like the recent centre-left victories in Latvia and Denmark, this news comes with some important caveats. For starters, French Senators are not directly elected by the French people. They are instead chosen by 150,000 local officials throughout the country. These include mayors, city councelors and regional councelors as well as members of the lower house, the National Assembly.

In terms of power the French senate is much more similiar to its British cousin the House of Lords than to its American counterpart. The real power in France, after the presidency, lies with the National Assembly. The Senate can propose law and it must sign off on law, but like in the UK with the House of Lords, they can be easily overridden by the lower house and the president. Like with the House of Lords the French senate is often considered a refuge for people who used to be important, such as former assembly members or cabinet officials.

Sarko pleads his case as l'Oréal crisis deepens

The scandal that has rocked the French political class for weeks came to a dramatic climax last night, as French President Nicolas Sarkozy took to the airwaves to assure the public he is innocent of the charges leveled against him. The allegations are part of a complicated web that originally sprang from a lawsuit involving France’s richest woman, l'Oréal heiress Liliane Bettencourt.

In what the French press was calling the most important interview of his presidency, Sarkozy strongly denied, in vigorous and often aggressive terms, that his 2007 presidential campaign was partly financed by illegal donations of cash stuffed in brown envelopes from the 87-year-old heiress.

It is a scandal that has threatened to sink Sarko’s presidency, coming at a time when he is suffering the lowest poll ratings since he came to power and right before his big push to make major cuts to the French budget and raise the retirement age from 60 to 62. It is a push that has met with fierce opposition.

Europe Goes Conservative in Crisis

If you heard a soft whimpering sound Sunday night, it was likely the sad echoes of Europe's left sobbing into their beers. All across the continent, with only the exception of Greece and Slovakia, Europe's Democratic Socialists were dealt crushing blows in the European Parliament election, whether they were the ruling party or the opposition.

Considering this result has come at a time when a majority of Europeans want to see more state action in the economy and people are reeling with anger against "fat cat capitalists", the result has left Europe's socialists scratching their heads, wondering what to do next. Though there is a mood of public anger across the EU, the ruling conservative governments in Germany, France, Italy and Poland didn't see their parties punished at the polls, in fact some of them even gained seats. On the other hand, the governing socialists in Spain, Hungary and Britain all took a drubbing at the polls. The Party of European Socialists (the block of various centre-left parties in the European Parliament that includes Britain's Labour, France's Socialists and Germany's Social Democrats) lost 20 seats.

I watched the election results while in Berlin this weekend, and I can tell you that even though the Social Democrats knew they weren't going to do great, the sheer margin between them and Angela Merkel's Christian Democrats was highly depressing for them, since it now seems certain she will no longer need to ally with them after the general election in Germany in the Fall. Sarkozy's UMP also easily defeated his socialist rivals, gaining 13 seats to put the UMP representation in the European parliament over the French socialist contingent for the first time ever. In Britain Labour received its lowest vote in the history of any UK country-wide election, coming in with a shocking 15.7%. The dismal results may even have the effect of forcing Gordon Brown to call an election, which would almost certainly lead to Labour being ousted from power.

So does this mean Europeans are turning to traditional conservative economic theory to guide them out of the current crisis? Not a chance, say most analysts. The poll result is being attributed more to the chaotic and fractured state Europe's socialists find themselves in today than any kind of ideological shift for the continent. As the Socialists have been in chaos, Europe's centre-right has hijacked the traditional tenants of socialism, co-opting the ideas of the left. Sarkozy suddenly went from being "Sarko l'Americain" to Sarko the French champion against unrestrained Anglo-Saxon-style capitalism. It would seem that Europe is now asking, what is Socialism in Europe in 2009? What is it the socialists represent?

So the coming months will see the socialists regrouping, in each country, and figuring out who they are and what they represent. It's clear they have lost control of the narrative, and they have lost credibility with much of the public. Socialist floor leader Martin Schultz was probably right Sunday night when he called the result "a very sad evening for social democracy in Europe."

*Of course the election was also a big victory for extreem parties, particularly the far-right. But I'll write more on that tomorrow. Oh and yes, the Swedish Pirate Party did win a seat. Arrr, matey!