European governments turn left in global crisis

By Adrian Croft - Analysis

LONDON (Reuters) - The global financial crisis has brought nationalisation, regulation and state intervention back into vogue in Europe but the turn to the left may not last long.

European governments are pouring hundreds of billions of dollars into bank rescues and economic stimulus plans to try to prevent the crisis becoming a deep depression.

Governments in France and Italy, suspicious of free-wheeling "Anglo-Saxon" capitalism, seem happy to play a more active role in the economy to combat problems widely blamed on capitalist excess. Germany's government has also shifted to the left.

Others, such as Britain, are more likely to resume business as usual when the crisis eases, even though the merits of the world financial system are being questioned and world leaders will seek solutions at a summit in Washington Saturday.

"People are looking to politics and the state to bail out the failures of economics and the market," said John Monks, general secretary of the European Trade Union Confederation.

"Events have taken us some steps to the left, (but) obviously there are a lot of people just trying to get back to business as usual as quickly as they can," he said.

Sometimes reluctantly, governments are resorting to policies that smack more of managed economies than the liberalism that has held sway in Europe since the days of former British Prime Minister Margaret Thatcher and U.S. President Ronald Reagan.

Deregulation has become a dirty word, and bankers earning big bonuses and oil companies raking in huge profits have become whipping boys for politicians and the media.