Losing the way in Euroland

By Gavin Bowd

Nineteen months of New Labour have certainly shown Tony Blair's impatience to cast off the last vestiges of socialism. The "Third Way", combining "enterprise and fairness", has meant a basic acceptance of Thatcherite economics plus symbolic gestures towards the progressive agenda: the minimum wage will be minimal, the environment defended without real financial backup. If Blair rails against the crusty peers inhabiting the benches of the House of Lords, nothing is done to scare the shareholders and there is no discernible interest in any narrowing of the gap between rich and poor. For New Labour's middle-class leadership, the working class are no longer the guardians of the millennial dream: they are feckless children to be forced to work and save by government legislation.

The last weeks have seen Tony Blair expressing his admiration for the nineteenth-century Liberal William Gladstone. There is more to this rapprochement than a shared taste for moral condescension to the poor. There is also the explicit ambition to make New Labour the centre party of British politics, subsuming a Liberal Democrat rump which is already being coaxed into ever closer cooperation with the government.

Tony Blair and his acolytes are keen to point out that this stampede to the centre is happening all over Europe. In Germany, their newly-elected friends speak of a "radical centre": even "social democracy" has become an extremist misnomer. In Italy, the ex-communists, now Democratic Left, have ditched the hammer-and-sickle emblem, the red flag, the colour red, intend to abandon the word "Left" in their title, and now lead a government that is squeezing wages and public spending in order to join Euroland. Even in relatively radical France, the socialist-dominated government has decided to privatise its cultural missions abroad: from now on, the tenets of "liberty, equality, fraternity" will need corporate sponsorship.

But this social-democratic love-in is more precarious than their spin doctors might like us to think. The recent European summit in Vienna showed clear fractures, old and new. The question of the EU budget brought out vested interests and special pleading. Proud inheritor of Thatcher's handbag, Tony Blair defended Britain's rebate and opposed the "harmonisation" (ie increase) of wages and taxes. Germany is showing a new assertiveness, calling for a reduction in its disproportionate contribution to the budget. The question of enlarging the EU sows fear and division among the member-states: the cost of integrating Eastern Europe -- most of whose communist parties have jumped expectantly on the social-democratic gravy train -- would be crippling, and take money away from such peripheral countries as Greece and Portugal. Faced with this gruesome prospect, national self-interest, as ever, has broken the social-democratic consensus.

And it is this economic reality which should be the undoing of Tony Blair and his European counterparts. They may "face the challenge" of globalisation, with its consequences of financial instability and "flexibility" (Latin for sacking people), but the monetary straight jacket they have zealously created will offer little palliative to them. Unlike their right-wing opponents, the Euro-socialists are historically dependent on a working-class electoral base, which has changed but has not gone away. It is this base that has faithfully continued to vote for them while they extended the gilded hand of friendship to the middle classes. There may come a time when their patience with the "Third Way" will wear thin.

There are already signs that this is happening, with transformed communist parties coming to haunt their bigger social-democratic counterparts. Elections in Sweden saw a huge increase in the vote of the Left Party, which opposes moves to erode the welfare state. In Germany, France and Italy, socialists confront a solid fringe of far left and green parties. Even in Britain, New Labour is being rocked from its complacent slumber: a recent European by-election in Scotland saw Labour pushed into a humiliating third place, thanks to the success of the newly-founded Scottish Socialist Party. This party, unashamedly attached to the "Red Clydeside" tradition of Scottish radicalism, is widely expected to pick up seats in the new Parliament next May, and could even hold the balance of power. At this rate, it may not be so very long before Euroland turns topsy-turvy for Tony Blair and his continental cousins.