Chartist, October 1999
Continental social democrats are deeply ambivalent about Britain’s Labour government – though their reasons vary widely. Paul Anderson reports
When Labour won the 1997 general election, there was barely concealed rejoicing throughout the continental European political establishment. Tony Blair was an unknown quantity the other side of the Channel. But few mainstream continental politicians doubted that he was an out-and-out pro-European whose accession to power meant the end of a decade of Tory obstructionism in Europe.
Today, the picture is rather different. The sense of relief that the Tories are gone is still just about palpable. But Blair is no longer an unknown quantity. And although he is still much admired on the continent, doubts about new Labour are now widespread, particularly among left-leaning social democrats.
There are several things new Labour is generally seen to have done well. Most important, Britain is now firmly established as a co-operative member of the European family, not its black sheep. The Blair government has signed Britain up to the social chapter of the Maastricht treaty, has given substantial impetus to west European defence policy integration and has played a constructive role in the gruelling process of reforming the Common Agricultural Policy in preparation for EU enlargement.
The most common cause for continental grumbling about Britain under Blair is the apparent cooling of new Labour’s enthusiasm for participation in the single European currency. In 1997, hopes were high among other EU governments of all political colours that Blair would take advantage of his extraordinary popularity among British voters and his giant parliamentary majority to call a snap referendum on Britain joining the euro in the first wave. That didn’t happen – and the British government subsequently decided to rule out a referendum during the current parliament.
In the wake of this June’s European elections, the Labour leadership has wavered again on the euro. Blair has agreed to front the pro-European Britain in Europe campaign – but only on condition that it drops its focus on arguing for British participation in the single currency and instead emphasises the benefits of Britain remaining in the EU. Blair has continued to argue for British membership of EMU when the time is right, but sources close to Gordon Brown have indicated that the chancellor is no longer as favourable towards sterling joining the euro as he once was. With the opinion polls showing strong public opposition to Britain joining EMU, it would not be surprising if Labour decides not to hold a referendum even in the next parliament.
Euro-zone politicians who want Britain in are not impressed – and they are right to detect a failure of new Labour nerve. Yet the truth is that Britain’s dithering on the euro, however damaging it is to the political credibility of new Labour, does not make a great deal of difference to them. The euro “ins” have to make the single currency work regardless of what Britain decides to do. If disappointment with the British stance is widespread, it is not intense.
By contrast, there is deep hostility among some continental social democrats to new Labour’s enthusiasm for deregulation and flexible labour markets, which they see as part of an attempt to replace the European model of workers’ rights and welfare provision with something akin to what prevails in the United States.
Since becoming prime minister, Blair has consistently proselytised for policies to encourage competitiveness, doing his utmost to persuade his fellow social democratic leaders – and some moderate conservatives – to sign up to the “Third Way” represented by new Labour in Britain and the Clinton administration in the United States.
There is something about the ‘Third Way’ initiative that gives it the air of a desperate attempt by Blair to secure influence over euro-zone economic policy that British non-participation in the single currency has denied him. And so far, the results have not been spectacular: a few seminars and conferences and a pamphlet launched jointly by Blair and German chancellor Gerhard Schröder just before the European election, Europe: The Third Way — Die Neue Mitte.
But enough social democratic party leaders have become involved in the ‘Third Way’ initiative to give it momentum – and this in turn has set alarm bells ringing, particularly in the French Socialist Party, on the left of Schröder’s SPD and among German trade unionists.
‘We are different, unique,’ French prime minister Lionel Jospin declared when asked why he had not signed up to the Blair-Schröder pamphlet. “We are less free-market, less attached to transatlantic ties. We favour global economic regulation.” In Germany, the SPD has spent much of the summer arguing about whether the Blair-Schröder pamphlet played a part in its miserable result in the European elections, with the left and prominent trade unionists attacking its free-market thrust.
Not all the hostility to the Blair-Schröder pamphlet should be taken at face value. It is a moot point whether Jospin’s differences with Blair and Schröder are much more than rhetorical. With the exception of its introduction of the 35-hour week, his government has been notably deregulationist, and his distancing himself from Blair and Schröder has more to do with his need to retain Communist Party support for his government than with anything else. Similarly, SPD left criticisms of the Blair-Schröder document have a lot to do with continuing resentment at the ejection of Oskar Lafontaine from the government in March and opposition to the austere budget package put forward by his successor as finance minister, Hans Eichel. The reality is that all the social democratic governments in the EU enthusiastically embrace the market even if they spurn the rhetoric of the “Third Way”.
Nevertheless, worries that the Blair government is a Trojan horse for American-style labour-market and welfare practices are real enough, and they are unlikely to go away if it continues on its current course. If new Labour seriously wants to keep in with its social democratic sister parties in continental Europe — and they are in power in 13 out of 15 EU countries — it would do it no harm over the next few months to make it clear that it thinks trade unions, workers’ rights and comprehensive welfare states are good things rather than impediments to enterprise. Come to think of it, that might even boost morale in Labour’s own ranks. 
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