The prospect of populist left election victories in Greece and Spain this year is real. So real, in fact, that the survivors of the old, un-populist left from the 20th century have concluded, in advance, that disaster looms.

All across the social media you can, as you search for the words Podemos and Syriza, read as many denunciations from the hard left as you can critiques from the right.

Though insignificant in themselves, the pained outrage of these far-left groups is a signal that something big and real is happening in European politics. To me it looks like a new form of social democracy is being born – and one moulded to a very different set of priorities to those that guided Labour and its socialist variants in the 20th century.

It was the Bloomberg journalist Joe Wiesenthal who invented the term for it: “Tsiglesias” – a portmanteau for the Syriza leader Alexis Tsipras and Podemos leader Pablo Iglesias. But what does Tsiglesias actually stand for? When in office how might it react? And if successful, is it replicable across Europe?

Iglesias’s party did not exist 18 months ago; Syriza – a more conventional product of the new left of the 1970s – has evolved both its politics and structure rapidly as the prospect of coming to power looms. But if you look at their respective manifestos, they are moulded around the 2014 Euro election programme of the European left, whose 52-strong group in the European parliament is four members bigger than Ukip’s.

Debt restructuring

At the centre of the economic policy is debt restructuring: the proposal that the scale of debt reduction facing most of peripheral Europe is so large that it will suppress growth for a generation. A reversal of austerity, some mild fiscal expansion and the reversal or end of privatisation programmes completes the basic list.

Though this runs at odds with both the principles and rules of the eurozone, almost none of the new-left populist parties wants to leave it. Instead they propose the ECB becomes a true lender of last resort, using quantitative easing to revive consumption and manage debt forgiveness.

The new-left parties, in other words, want Europe to become a Keynesian fiscal union with a high welfare state. It is not the status quo but it is not what the Marxist professors who staff their economics departments dreamed of when they were on the streets in 1968 either.

The apoplectic reaction of free-market commentators to the possibility of a Syriza government in Greece, or a Socialist-Podemos coalition in Spain later this year, poses an interesting question, whose answer could shape politics in Britain just as much as in the Euro periphery.

Is a Keynesian welfare state, committed to public ownership and deficit-financed growth either possible, or permissible, in the European Union?

So far, much of what’s driven Euroscepticism has been the desire of conservative voters in various EU countries to take back control of issues important to the right: migration, business regulation, crime, agriculture and foreign policy. There’s been barely a glimmer of opposition to the EU project among traditional social democrats.

Taking leads from Greece and Spain

But the electoral logic of Greece and Spain may be about to change that. Within a month, Tsipras stands a 50:50 chance of becoming the Greek prime minister. Though he is ready for a prolonged negotiation with Frankfurt and Washington over debt reduction, he is pledged to cancel the austerity measures imposed by Greece’s creditors on day one.

A clash with the ECB, the commission and probably parts of the Greek state are pretty likely thereafter – and the outcome will be watched closely across Europe. Because if basic Keynesianism and an expanded welfare state are not permissible, and if the European institutions are seen actively to collude with attempts to sabotage them, a change of sentiment about the EU on the centre-left might follow.

If you study the programme of the new European left, much of it is not economic. Podemos, which has recruited thousands of young activists from the indignado protest movement of 2011, led its manifesto with demands to repeal anti-protest laws, for abortion rights and for the right of Spanish regions independence.

Syriza’s 2012 programme emphasised – as well as anti-austerity policies – demands like drug decriminalisation, de-militarisation of the police, withdrawal from Nato and recognition of Palestine.

The principles that radicalised young people across Europe in 2011-12, and which have continued to guide numerous protest movements since then, are summed up by the oft-repeated phrase: “I don’t want to live in an economy”.

The one thing Bolshevism had in common with mainstream social democracy was that they were defined by economic programmes. The new populist left has begun from the recognition that – in the highly marketised, globalised and granular economy created in the past 25 years – social justice begins at a small scale and from below.It is as much about restoring the power of agency to deprived and shattered communities, and autonomy to peoples lives, as it is about delivering percentage points against various economic measures.

And the absolute baseline for the youth swarming into the new left parties is that the state must get out and stay out of their private lives.

What about at home?

In Britain – beyond the one-man turbulence that is Russell Brand – the only political force that understood the power of these issues was the Radical Independence Campaign in the Scottish referendum. It promoted the idea that Scotland should become the “warm south of Scandinavia” – and if you think about it, all Podemos and Syriza are really trying to do is bring the Scandinavian model to the Aegean and the Med.

But here’s the problem: in a neoliberal world, even the basic welfare state can look revolutionary. Most projections for the survival of free-market capitalism involve the creation of greater inequality, a smaller state sector and a lower-paid workforce.

It is, then, most likely not over some prolonged debt restructure process that a populist left government in Greece or Spain might clash with the Euro authorities and the local elites; rather, on “Scandinavian” issues like police demilitarisation, abortion, the re-regulation of the labour market or an attempt to provide basic humanitarian solutions for illegal migrants clamouring at the borders of both countries.

For more than a decade, radical demonstrators have held up banners saying “Another World Is Possible”. This year we might get to see what phase one of that other world looks like. The question it poses for the EU institutions and the elites who run them is existential: is another strategy even tolerable?

The answer will make 2015 a critical year for the wider left in Europe. The whole crisis and decline of European social democracy after 2008 was triggered by the conviction that alternatives to austerity do not exist. For politicians like Ed Miliband, Francois Hollande and for that matter Jim Murphy, it is not the fate of Syriza they should be focused on but the fate of their own sister social-democratic party in Greece, Pasok. It, currently, stands on 4.6 per cent. Two years ago it ruled Greece.

However inexperienced, naive, and lacking in machine-party discipline the new populist left in Europe is, it is setting the agenda.