Singing to the tune of the Conservative European choir

Helle Thorning-Schmidt missed an opportunity to become a strong if lonely progressive voice at the European top-table

The Social Democrats are finally running things again. Freshly elected Danish Prime Minister, Helle Thorning-Schmidt, who took the rotating presidency of the European Union on New Year's day, is in the minority given the centre-right domination of European governments.

Could the Danish presidency mark a return to centre-left thinking in Europe? A readjustment from austerity to growth policies? A much needed focus on fighting unemployment in the Financial Compact? Well, think again.

On several important issues of economics and growth, Mrs. Thorning-Schmidt sounds just like another voice in the conservative European choir.

Helle Thorning-Schmidt’s speech introducing the presidency at the European parliament went down fairly well with her former colleagues. The work programme focuses preparing a 7-year budget framework for 2020, acting within annual cycle of macro-economic and budgetary coordination known as the European Semester, and obviously also on the economic crisis.

Mrs. Thorning-Schmidt has also made an impact in the European Council. During her first few meetings she's been checked out by Silvio Belusconi and told off by Nicolas Sarkozy.

According to the Financial Times the French president rebuked Mrs. Thorning-Schmidt, when during a late night session, she spoke up for a financial compact including the UK: "You’re an out, a small out, and you’re new. We don’t want to hear from you".

Danish euro sceptics interpreted the incident as a sign that the rest of Europe places little weight on Denmark’s opinions or role, whilst the Danish press portrayed Sarkozy’s outburst as another example of French arrogance.

But the more remarkable feature, from a progressive point of view, is that a Social Democratic prime minister chooses to spend some of her political capital defending David Cameron's guarantees to the financial markets in the city.    

There's obviously a purely national interest at stake here: the Danish government is desperately trying to gain the strongest possible foothold within the eurozone without actually joining it.

But remarkably, the Thorning-Schmidt government also refuses the very idea of a Europe-wide tax on financial transactions, as put forward by Merkozy. They do so by essentially repeating the argument of the Cameron government, that the idea can only be realized in a global framework if massive job losses are to be avoided.

"If the financial transactions just move somewhere else, we haven't accomplished anything except losing income. And I' m not convinced that the proposed framework is robust enough", the prime minister remarked at a press conference.

This has prompted heavy criticism from progressives for positioning Denmark to the right of conservatives like Merkel, Sarkozy and Barroso in the European debate.
 
Former Danish PM and PES President Poul Nyrup Rasmussen, accused the government of outright manipulating of the facts of a financial tax. Mr. Nyrup Rasmussen has also been a critical voice on the government’s lack of focus on job creation and growth in relation to the negotiations on the Financial Compact.
    
Thorning-Schmidt has brushed off this criticism, remarking that fiscal discipline is not a trademark of the right-wing, and rejected any Keynesian style approach to the euro crisis: "I'm convinced that first we'll have to fix the euro and bring down interest rates, which in it self will increase demand. Once the healthier economies can afford it, we can get started fighting the slump with fiscal policy, which is also possible within the Financial Compact. But there's just no way to manage business cycles without solid finances", she remarked to Danish daily Jyllands-Posten.

Not exactly your standard progressive outlook on job creation. In fact it sounds an awful lot like the bizarre idea of 'expansive austerity' which has taken hold of the centre-right mainstream in Europe: if we cut public budgets, it will somehow increase private confidence, which in turn will create private sector jobs and calm financial markets. Problem solved. Except that it hasn't really turned out this way in any of the countries taking that path.

The sad fact is, that Helle Thorning-Schmidt had an opportunity to become a strong if lonely progressive voice in the circle of heads of governments for a different approach to the crisis, championing the causes of millions of unemployed Europeans, taking on the financial sector and teaming up with Francois Hollande and the likes to create a second wave of centre-left values shaping Europe like during the late 90s.

She just lacks the ideas.

A contribution to State of the Left - Policy Network's monthly insight bulletin that reports from across the world of social democratic politics

Kristian Madsen is editor of Politiken