The response of European social democracy to the crisis of the Keynesian socio-economic model that they created in the 1970s and 1980s was the market-oriented modernization of the social democratic parties. At the end of 20th - early 21st century, social democrats revised a number of principles of democratic socialism, borrowed some neoliberal concepts and almost completely abandoned the utopian elements in their ideology. The most active renewal processes were developed in the Labour Party of the United Kingdom under T.Blair, and in the Social Democratic Party of Germany under G.Schröder. However, the global financial and economic crisis of 2008 showed that social democrats lack a convincing alternative to neoliberalism. As a result, after 2008 social democracy faced new problems and challenges. From the point of view of the author, at present, European social democracy is in a state of crisis. There are several reasons for that. First of all, social democracy, which is in general a pro-globalist force, underestimates the negative consequences of globalization for its voters. It advocates a liberal migration policy and turns a blind eye towards the difficulties associated with the integration of immigrants into the European societies. Market-oriented mo dernization in the social democratic parties provokes resistance of the left-wing traditionalists, which can lead to internal party crises and splits or the success of the “hard left”, such as J.Corbyn. The shift of social democracy towards social liberalism strengthens the left-populist parties (Syriza, Pode mos, Unbowed France, etc.), which are becoming serious competitors to social democrats. It also contributes to the erosion of social democratic identity. Last but not least - social democracy is in intellectual stagnation and is not able to offer voters any fresh, original ideas. According to the author, European social democracy can achieve a real renewal only if it chooses the path of a creative synthesis of socialist, liberal and conservative ideas.