Political power in France and elsewhere in Europe have typically oscillated between the moderate left and the moderate right. It is now going to the extremes, and the old political order is paying the price.
France's shift to the far right has ramifications for Europe
On Monday, some western stock markets lost virtually all their gains made in the first quarter of 2012. The massive sell-off was sparked by gloomy economic news and growing political uncertainty in Europe. The popular backlash against draconian spending cuts is empowering far-right movements that threaten the euro and the entire European project.
Spain's borrowing costs are hovering around the 6 per cent mark; that could trigger another sovereign debt bailout and a second global credit crunch, as international banks holding Spanish bonds will refuse to lend to one another. Moreover, the unexpectedly sharp contraction of private sector business activity in the euro zone over the past few months has shocked investors and dashed hope of a sustained return to growth.
Worse, global investors are spooked by the French socialist François Hollande's victory in the first round of French presidential elections. That is raising fears of wrangling over the euro rescue strategy, and simmering tensions between an emboldened France that demands fiscal stimulus and an embittered Germany that wants further austerity.
So far Europe's political trouble seemed confined to the periphery. Greece and Italy have seen elected democracy cede temporary power to appointed technocracy, as austere economists took over from party politicians at the helm of government. Meanwhile, Spain's new elected executive struggles to deal with the economic mess left by the previous administration.
But now the crisis has reached core countries. The centre-right Dutch coalition government collapsed on Monday after a clash over budget cuts. As France appears poised to elect a socialist president in the second round of voting on May 6, Germany finds itself isolated within the euro zone. Many French voters want a stronger Europe to protect the country against globalisation, but they don't fancy the German version. The rest of Europe wants out of the iron cage of austerity.
Last December it seemed that Berlin had got its way. At an acrimonious summit where the British prime minister, David Cameron, wielded his veto power, German Chancellor Angela Merkel and her French ally, Mr Sarkozy, agreed a "fiscal compact" that forces sovereign countries to balance their budgets under strict central control, backed up by the threat of heavy fines in case of noncompliance. Only last month did all but two EU states, the UK and the Czech Republic, sign up to the new treaty. That was supposed to be the beginning of the end of the euro zone's existential crisis.
Now the new consensus is fast unravelling. It is not just presidents and prime ministers who are losing power to their political opponents. What Europe is seeing is a growing popular outrage against the ruling elites. Across the old continent there is an inchoate awareness that big government and big business are colluding at the expense of the people. That is why there is such fury against states bailing out banks that hold sovereign bonds while cutting back on public services and failing to boost employment.
Reinforced by the contempt for professional politicians, the rage of impotence is fuelling the flames of social unrest - from mass protest in Athens to last summer's London riots. All this erodes the social contract on which European societies have rested since the French Revolution.
Traditionally, political power in France and elsewhere in Europe oscillated between the moderate left and the moderate right. Each sought to combine a promise of security for the old working class with a prospect of aspiration for the burgeoning bourgeoisie. But with falling real wages, growing inequality and pockets of entrenched poverty, France's social contract has given way to a deep disconnect between elites and the populace.
With the centre-left and the centre-right offering variations of the same old orthodoxies that are rejected by the electorate, it is the political extremes that benefit most from popular discontent. Little wonder that in last Sunday's presidential poll, the far-left guided by the dissident socialist Jean-Luc Mélenchon, won over 11 per cent and the far-right led by Marine Le Pen received nearly one-fifth of the vote.
Both view the EU's economic liberalism as a Trojan horse for greater globalisation that merely enriches the rich and impoverishes the poor. But whereas the far left struggles to mobilise beyond their old constituency, the far right appeals to the new "underclass" who are trapped in permanent welfare dependency and the "working poor" who struggle to make ends meet.
This, coupled with fears about immigration and Islam, puts the far-right front and centre. If Mr Sarkozy's party splits following defeats in the presidential run-off and parliamentary elections in June, Ms Le Pen's Front National will emerge as the leading right-wing force in France.
Her lethal mix of populism and Islamophobia is gaining ground and transforming European politics. From Austria via the Netherlands to Scandinavia, Europe's far-right has growing leverage over tax-and-spend and migration policies. That threatens Europe's post-national project of integration. France looks set to be at the epicentre of an anti-European revolt.
For now Mr Sarkozy cannot be written off. He remains a formidable opponent whose sheer energy could yet transform a lacklustre campaign into an electrifying contest with a much closer than expected outcome.
But his dilemma is that a turn to the far-right will alienate the centre and vice-versa, yet for victory he desperately needs the support of both. To square this circle, his chosen strategy is to mix patriotic clamour with scare tactics over a left-wing victory.
Whether or not Mr Sarkozy gains re-election, the real winner will be Ms Le Pen's extreme right.
Adrian Pabst is lecturer in politics at Britain's University of Kent and visiting professor at the Institut d'Etudes Politiques de Lille in France