With major elections imminent in Germany and Norway, it is clear that centre-right politics in much of Europe is shifting dramatically – and the left has a long way to go in understanding what this means. This so-called ‘progressive conservatism’ eschews 1980s-style neo-liberal economics, but betrays renewed hostility towards centralised state bureaucracy. More significantly, ‘compassionate conservatism’ openly embraces the social freedoms of the post-‘68 generation, enabling Conservative parties to compete for votes in the centre. It is putting centre-right parties, notably Angela Merkel’s CDU in Germany and the Norwegian Conservative’s Erna Solberg, on the cusp of election victory.

The dramatic shift of political strategy is still poorly understood on the left. Merkel’s opponent, the SPD leader Peer Steinbruck, has been reduced to arguing that the CDU’s policies have been stolen – hardly a convincing prospectus for office. The more conventional tactic is to insist that centre-right is a ‘wolf in sheep’s clothing’ – adopting an apparently moderate rhetoric which conceals neo-liberal policies intent on shrinking the size of the state, defending traditional conservative interests among the wealthy, financiers, and the establishment. This may have more than a grain of truth: Conservatives (notably Angela Merkel) have espoused a form of post-crisis austerity which has revived the dubious science of ‘monetarist economics’. Making swift and large-scale public expenditure cuts in the name of budgetary consolidation is a risky step in the face of an on-going contraction in global demand, whatever the tentative signs of eurozone recovery.

Nonetheless, social democrats need to be wary of glibly dismissing the new model of centre-right politics as 1980s-style Thatcherite individualism. After the Conservative Party’s historic victory in 1979, the British left failed to appreciate its radical potential: the capacity of Thatcherism to project itself as being on the side of major changes that were sweeping through the world economy, and the popular recognition of a new settlement between labour and capital to halt Britain’s relative economic decline.

So today, centre-right parties are rediscovering their winning ways by aggressively tacking towards the centre-ground. The German CDU's Angela Merkel has long been willing to lean towards the left, having governed throughout her first term in coalition with the SPD. The financial crisis has reinforced the determination of Germany’s politicians to demarcate the German model from the worst excesses of Anglo-American capitalism and neo-liberal globalisation. The German Chancellor appears determined to outflank her social democratic opponents from the left. The CDU programme includes a federal minimum wage, government action to curb rising rents in the housing sector, and legislation for gay marriage. Merkel’s policy to bailout Greece and frequent calls for European solidarity have been supported by the SPD, which can hardly better her pro-European stance.

Similarly, the Norwegian centre-right (where elections take place next Monday) declare their open support for trade unions, and their intention not to interfere with existing labour market regulations covering sick-leave and laws governing temporary workers. Sten Inge Jorgensen, a journalist at Morgenbladt attests: ‘The success of the Conservative party is the fruits of a long and carefully planned strategy to become a people’s party’. Against the discernible shift to the centre and new rhetorical appeal, the Norwegian social democrat’s pledge of ‘safe governance’ hardly inspires confidence.

Throughout Europe, progressive conservatism has varied forms according to divergent political traditions, electoral imperatives, and social conditions. The unifying ideological rationale, nonetheless, is the willingness to modify the commitment to liberal individualism which became the dominant strand of Conservative thought in the 1980s; and to combine it with renewed scepticism about the role of the centralised state, and the efficiency and efficacy of the public sector. This ‘progressive’ Conservative agenda has four pillars:

First, establish dominance on the economy: Conservatives have fought hard to seize the mantle of economic competence, portraying social democrats as 'deficit deniers' incapable of remedying the fall-out of the financial crash. Centre-left parties have appeared complacent about the scale of public debt, apparently unwilling to make ‘tough choices’ about the balance of tax rises and spending cuts required to steer a sustainable fiscal path. The centre-right has succeeded in redefining the narrative of the crisis as one of ‘public indebtedness’, rather than ‘market fallibility’. No party in the industrialised world will remain a serious contender for office unless it is a trusted economic manager.

Second, redefine the centre-ground: ‘progressive’ Conservatives combine scepticism about the public sector with a renewed commitment to the values of community and the public good. In Norway and Germany, the centre-right is seizing the mantle of progressive reform. They espouse a commitment to include the poorest and most vulnerable, creating a new role for charities and the third sector. At the same time, centre-right politicians tread carefully in reforming entitlements such as healthcare, pensions and social insurance, appealing directly to voters unwilling to rely on privatised provision.

Third, renew ‘traditional values’ in a modern society: another characteristic of the Conservative appeal is a desire to stand up for the virtues of belonging, morality, and family without alienating younger, prosperous and educated voters. This means reinforcing traditional ways of life, protecting communities from the impersonal forces of modernity and social change. The centre-right has learnt to do so in a way that assiduously avoids cultural conflict relating to the role of women (as Merkel offers a 100 Euro allowance for stay-at-home mothers), recognising individual rights to non-discrimination and equal treatment among minorities. The traditional affiliation with social democratic parties is being broken.

Finally, strike a pragmatic posture internationally: Conservative parties have largely discarded their nationalist and protectionist instincts in favour of selective international co-operation in the European Union and within global institutions. As a result, centre-right Conservative parties in Europe are more electable than in the past, reaching out to lower and middle-income groups while governing through competence and fitness to rule, rather than ideological dogma. This represents a recovery of the core Conservative tradition which influenced centre-right parties in Europe during the 1950s and 1960s, embodied in the Christian Democracy of Adenauer, and the ‘One Nation’ Conservatism of MacMillan and Butler.

Of course, it would be wholly wrong to conclude that the ‘progressive’ Conservative agenda has few contradictions. Immigration, for example, remains a major fault-line within the centre-right, which is increasingly forced to choose between ‘traditional working-class’ voters who are defecting to far right parties, and liberal metropolitan voters who have largely embraced cosmopolitanism and globalisation. This is the choice that awaits David Cameron: his flirtation with Lynton Crosby’s ‘wedge’ politics may appeal to wavering UKIP supporters, but risks reviving memories of the Conservatives as ‘the nasty party’. There can be little doubt, however, that the new politics of ‘progressive’ Conservatism represents a potent challenge to centre-left politics.

Patrick Diamond is Vice-Chair of Policy Network and co-editor of “Progressive Politics after the Crash: Governing from the Left”