‘It does not happen here either’
Why social democrats fail in the context of the great economic crisis
in European social democracy during the global economic crisis
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Social democracy is apparently wavering between a continuous adjustment to the constraints of neo-liberal globalisation and the search for an improbable continent-wide 'green high-tech Keynesianism'. This chapter explains the reasons for this situation, focusing on the relationship of social democracy have forged with the capitalist economy and the European institutions. It looks at the defeat this political family of parties had to contend with as a result of the exhaustion of the social democratic/Keynesian project. The chapter also explains how social democracy made two 'Faustian pacts', thereby strengthening the neo-liberal paradigm established in the late 1970s: the conversion to the European integration process and the enthusiasm for the knowledge-based economy. It argues that the Faustian pacts that have been forged continue to make it difficult for the social democratic family to offer a comprehensive and coherent alternative to the ailing neo-liberal paradigm.

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