Slovak Prime Minister Robert Fico let rip at the Party of European Socialists conference in Prague at the weekend, venting a decade of tension between the Smer leader and the PES establishment.

In a speech to delegates, the prickly premier bemoaned the PES’ failure to support Smer, despite its political success over the past decade, and said the umbrella Social Democrat group had made him “feel like a real outcast” with its investigations of his coalition deals with nationalist parties and his adoption of their rhetoric on minorities.

The diatribe reflected more than personal resentment or the simmering conflict between Western and Central Europe over how to handle the wave of refugees from the Middle East and North Africa. It also illustrated the deep divisions within Europe’s Social Democrats over how to react to the threat posed by rightwing populism, both to their political future and to democracy in general.

Social Democracy was reborn in Central and Eastern Europe after the collapse of Communism in 1989 just as its counterparts in Western Europe were fighting a losing battle against neoliberalism. The fall of the Soviet bloc only added to the left’s crisis of confidence, leading many Western parties to make themselves indistinguishable from their centre-right rivals on economic policy.

In the east the environment was if anything even less promising for the left. The backlash against Communism partially discredited all leftwing movements in the former Russian satellites of Central and Southeast Europe countries. This was the case even where the Social Democrats were a reformed historic party, such as in the Czech Republic, or a new project, as in Slovakia, rather than just the rebranded former Communists, as in most of the rest of the region.

Centre-right parties typically steered the economic transformation process and – after initial pain – benefited electorally from growing living standards, and the cheap privatisation and restitution of state-owned property to supporters. Leftwing parties often found themselves in a defensive crouch, criticising the costs of transformation when out of power, trying to ameliorate them when occasionally in office, but not fundamentally altering the economic model.

The most successful leftwing parties in the region were the ones that associated themselves with transformation by embracing foreign investment and the EU, such as the Czech Social Democrats.

Currently strongly pro-EU Social Democrats lead governments in the Czech Republic and Slovakia, while in Albania, Montenegro and Moldova they head their countries’ drive for EU accession. Elsewhere Social Democrats are junior coalition members in Slovenia, Lithuania and Estonia, and are the main opposition party in Romania, Croatia, Bulgaria and Macedonia.

On the surface it looks a more solid performance than in Western Europe, where, though Social Democrats are in power in France, Italy, Sweden, and Austria, none currently look likely to retain office at the next election.

Yet the Social Democrat position in the east is also precarious, because they face the most successful rightwing populist parties in the whole of Europe.

Slippery slide

Poland and Hungary show that the slide from being the technocratic ‘party of power’ to political irrelevance can be a precipitous one. Even more so than in Western Europe, where at least there is a strong middle class leftwing vote to fall back on; once Central European Social Democrats lose working class support, they are finished.

If competence is your main selling point, economic or corruption crises can swiftly destroy your voters' loyalty. In Hungary the Socialist Party lost power in 2010 over their handling of the global financial crisis and are now marginalised: the rightwing Jobbik party has become the main opposition to Viktor Orban’s ruling Fidesz party. In Poland the Democratic Left Alliance government was brought down by corruption scandals in 2005 and has never regained credibility: the party lost all its seats when Jaroslaw Kaczyinski’s Truth and Justice returned to power last year.

Apart from Romania – where the PSD has a strong chance of winning the election in December partly because rightwing populism there is weak – Social Democrats currently look unlikely to retake power anywhere in the region.

Even the Czech Social Democrats look likely to become at best a junior coalition partners after next autumn’s general election in a government led by the billionaire populist Andrej Babis. The finance minister has managed to claim credit for the coalition’s solid economic performance, while at the same time retaining the image of being an outsider railing against the corrupt establishment, even though he has been a member of it for his entire life.

Meanwhile in Slovakia, Fico’s Social Democrats narrowly secured re-election in March, but they are losing ground to an array of populist, eurosceptic and nationalist parties that exploit disappointment with the EU and over the sharing of the benefits of economic growth since the collapse of Communism.

Fico himself has had heart surgery and he told the PES he doubted whether he would ever attend another Council. If, as some predict, he does step down next year, it is unlikely that the party he founded will retain its current dominance under a successor.

The Smer leader – who has long been criticised for being a populist himself – therefore used his speech to make a valedictory clarion call for Social Democrats to wake up to the threat of rightwing populism. Rather than confront or isolate it, he argued that Socialists should address the fears that fuel populism, and adopt some of their enemies’ tactics, such as simple messages and rough and ready language.

He launched into an attack on political correctness, saying it had prevented Social Democrats listening to their traditional working class supporters. “I had to bite my tongue because of political correctness,” he said. “We must learn a lesson… our opponents use political incorrectness to win points. They say things that people want to hear.”

“If we stop being politically correct and we are as open as our opponents are we will not lose,” he added. “Down with political correctness!”

“We must not be afraid to say the truth and to say that in a way people can understand,” he reiterated later at a press conference in response to a question from bne IntelliNews.

Anti-Roma

Fico has been one of the most outspoken European opponents of the EU’s mandatory quota scheme to redistribute refugees around the bloc. Unlike the Czech Social Democrats, he has allied himself unequivocally with Orban and Kaczynski. Like them he has declared that he wants to stop his largely Catholic country becoming multicultural, and has drawn a link between immigration and terrorism. “Islam has no place in Slovakia,” he said earlier this year.

Fico has form on this. He has never shown any sympathy for Slovakia’s large impoverished Roma minority, and two of his three governments have included the virulently anti-Roma Slovak Nationalist Party (SNS).

This has made him a black sheep in the PES, which suspended Smer after Fico formed its first government with the SNS, and has put the party currently on notice because of the premier’s anti-Islamic comments. Critics also argue his stance has paved the way for a new openly neo-fascist party to enter the Slovak parliament for the first time.

But Fico believes that by articulating the beliefs and fears of poorer Slovaks, he has been able to become the dominant political figure in a country that had never previously elected a leftwing government in a free election.

He attacked the PES for trying to impose a ‘one size fits all’ policy prescription for all countries, and said it should instead respect the success of parties such as his. “We must be stronger if he want to win parliamentary elections but we will not win those elections if we dictate to each other what parties should do,” he told a press conference with the nervously grinning PES leader Sergei Stanishev and other top Social Democrats. “In every country there are topics that are special to that country.”

“Solidarity is not just doing what the big countries say,” he added.

It was an appeal to respect different attitudes to immigrants across the bloc. Voters in Central Europe are even more hostile to immigrants than in the West because many countries do not have them, and the minorities they do have – notably the Roma – are regarded as problematic.

Bread and butter

Furthermore, Fico broadened his assault on Western European Social Democrats by arguing that they had not only ignored their voters’ fears over immigration and multiculturalism, but they had forgotten about bread and butter issues such as wages and living standards, allowing the populist right to steal their clothes.

His views echo criticisms that Western Social Democrats and liberals have been so busy trying to build coalitions of minorities with ethnic and gender issues that they have lost their working class base, who feel their living standards are under threat from globalisation and technological change. This, Socialists such as Fico argue, is the lesson that should be drawn from Hillary Clinton’s defeat by Donald Trump, as well as Britain’s surprise referendum vote to leave the EU.

In Central Europe the picture is more nuanced, as most workers have benefited from EU membership and the transformation from Communism. However, convergence with Western Europe has slowed down since the global financial crisis and many workers feel that the new wealth has not been shared out fairly. Since 2008, Social Democrats and centre-right parties have often seemed indistinguishable in their austerity policies, enabling rightwing populists such as Kaczyinski to come to power despite Poland’s strong economic growth.

Even before the worldwide explosion of anger over corporate tax evasion following the Panama Papers leak, a lot of this frustration was directed against foreign-owned companies. They were accused of paying low wages and mistreating their workers, overcharging consumers, driving local competitors and suppliers out of business, and extracting huge dividends from their Central European operations.

Fico believes that by focusing on economic issues such as these – which have been almost ignored in the drive to modernise the economies of the region – the left could win back working class voters and find a way back to power.

His government has hiked minimum wages, forced foreign-owned utilities to lower charges, and levied special taxes on banks – all policies that had already been pursued by the populist rightwing governments in Hungary and Poland. “Are we really sure that we discuss issues that people want to hear?” Fico said.

“Social Democrats should be more active, we should point to these problems,” he argued, highlighting the need for convergence of wages, improvement in living standards and better protection of employees.

Equal pay

Central Europe is fed up with being a low-wage production centre for Western European companies, but Western Social Democrats ignored him when he asked about convergence of wages across Europe, Fico claimed.

“Equal pay should be an issue for the PES,” he declared, asking rhetorically why Volkswagen workers in Bratislava are paid one third of the wages of their German counterparts, a question that Sigmar Gabriel, the German Social Democrat leader next to him, passed on the opportunity of answering.

He warned that unless Social Democrats discussed these problems, “they will be presented in an attractive way by rightwing extremists”.

His comments were reinforced by Czech Prime Minister Bohuslav Sobotka, who has recently attacked Dutch retailer Ahold for the low wages it pays its Czech staff, and is likely to pledge to introduce special sectoral taxes in its election manifesto.

“We should really reply to the real concerns of people,” Sobotka told a press conference in answer to a question from bne. “Social Democrats must go back to the real policies of Social Democrats and try to protect those who are threatened by globalisation.”

“We have to make sure the European project makes sense to all our citizens,” Sobotka said, adding that, “convergence of living standards is a very important issue for Central Europe”.

This theme of attacking multinational companies and trying to boost living standards could also enable Sobotka to forge an alliance with the country’s populist President Milos Zeman ahead of next year’s election.

Sobotka, a centrist, has fought a running battle with Zeman – a former Social Democrat premier who now rails against Islam and supports Trump – but he now appears to be downplaying his differences and a recent cabinet reshuffle was widely seen as a sop to his onetime party boss.

But just as there are risks to Social Democrat values in pandering to intolerance, there are also dangers in pursuing economic ‘populism’: it could damage Social Democrats’ relationship with foreign investors and the EU – two rocks on which parties such as the Czech Social Democrats have built their success.

Moreover, it might not work: the populist right has already discovered and patented this formula, and, unlike Social Democrats, they really enjoy antagonising the EU and foreign investors.