More than any other issue, the most serious perceived threat to the future of the European left and centre-left is the idea that the conditions of contemporary capitalism render its governing project no longer viable. The breakdown of the postwar Keynesian consensus with the collapse of the Bretton Woods monetary system in the early 1970s saw the relative stability and rising living standards of the trente glorieuses replaced by a more volatile and crisis-ridden economic environment. The economic landscape that the crises of the 1970s engendered – the neoliberal paradigm – has proven to be hostile terrain for parties of the left. The rise of global capital mobility alongside a widespread push for market liberalization, diminishing taxation rates and shrinking welfare states saw centre-left parties largely adapt to this phase of capitalist development through the adoption of Third Way principles.

There is a long history of scholarly work detailing the structural economic constraints that this neoliberal environment places upon governing parties, and which are seen to hurt the governing ambitions of left and centre-left parties in particular. These arguments have come in waves. The first arrived with the high tide of the globalization debate in the early 1990s and argued that the contemporary conditions of globalized capitalism had destroyed the economic foundation of progressive politics by empowering mobile capital over democratically elected governments. A second wave of literature, in the late 1990s and 2000s, concerned itself with the impact of European integration and the way in which monetary union and growing fiscal surveillance institutionalized an anti-progressive dynamic within the EU. A third wave, which has roots in the pre-2008 literature but found added meaning post-GFC, grapples with the indebtedness of modern states and the increasingly tight grip that financial markets have on governments as a result. Much of this scholarship has built a strong thesis of the “death” of democratic capitalism and the non-negotiable emergence of neoliberal economic governance in its place.

This chapter engages with these literatures to ask the question: to what extent did structural economic constraints determine the centre-left's strategy post-crisis?