Europe struggles to follow a 'Third Way' path

Germany, France, and Britain all saw vocal debates this week overplanned reforms.

As European Socialists - in power almost across the Continent - battle to modernize their movement, three skirmishes over the past week have highlighted their problems in following a common "Third Way," in the political style of President Clinton's New Democrats.

Three recent vignettes from the front: In Paris, Communist trade unionists and members of the employers' federation both staged rallies on Monday to attack the Socialist-led government's plans for labor reform.

In Germany, the country's largest trade union launched its annual convention on Monday with a demand for a lower retirement age that would destroy the foundations of Chancellor Gerhard Schrder's budget reforms.

In Bourne-mouth, England, the most vocal opponents Prime Minister Tony Blair had to deal with at his Labour Party's annual conference were country-dwellers defending their right to hunt foxes.

In France, the pragmatic Premier Lionel Jospin is having to navigate carefully between left and right; in Germany, Mr. Schrder cannot ignore the power of traditional trade unions; only in Britain can the government count on broad public support for its vision of the future.

Schrder's woes

In the deepest trouble, as he struggles to build the "New Middle" that he used successfully as an election slogan little more than a year ago, is German Chancellor Schrder.

This autumn he and his Social Democratic Party have suffered a string of humiliating defeats in state and regional elections, sometimes garnering only half the support they won a year ago. Violent struggles within the ruling party, between its left and right wings, and spats with the environmentalist-oriented Greens, their coalition partner, have left the impression of a floundering and directionless government.

"It is not clear exactly what Schrder's vision is," says Anke Hassel, a researcher at the Max Planck Institute, a Cologne-based think tank. "There is a contradiction between what he says and what he does."

'Vision' falls short

The vision should have come with a joint declaration Schrder issued with Mr. Blair in June, titled "Europe: The Third Way, Die Neue Mitte." The statement called on the two leaders' European peers to deregulate markets, cut taxes, and hold down public spending. The spirit behind it was the one that has moved the British Labour Party since it took office two years ago - to broaden individual opportunity, rather than to guarantee social protection from the state.

But this enraged the left wingers in Schrder's party, who had scarcely been consulted. The attitude also perturbed voters. "Schrder's dilemma is how to mobilize old Social Democratic voters and the New Middle at the same time," says Christoph Strnck, a ruling party adviser.

At the same time, predicts Dr. Hassel, "the trade unions are going to be an obstacle" to Schrder's hopes to streamline the German economy. "They are certainly not going to support him in cutting social spending and changing the labor market" to make it more flexible, she points out.

The government's austerity budget, unveiled this summer, has already proved unpopular. But while Schrder risks more unpopularity with his New Middle rhetoric, he has yet to actually implement the reforms he says will regenerate the sluggish German economy.

Taking quite the opposite tack on the other side of the Rhine is French Prime Minister Jospin. Sheltering behind his image of a more traditional socialist, he has preserved his popularity while carrying out a set of reformist policies that Schrder can only envy.

Jospin's spin

Jospin has privatized more state-owned companies than his two conservative predecessors combined, has stood aside as a wave of mergers and aggressive takeovers have reshaped French capitalism along US lines.

Even his flagship piece of social legislation - reducing the workweek to 35 hours - leaves employers freer to impose more flexible labor habits.

But French sensibilities came to the surface when tire giant Michelin last month announced it was cutting 7,500 jobs in Europe within half an hour of declaring a 17 percent rise in profits. Jospin denounced the move as "unacceptable," but when he was asked what the government should do about it, he replied, "I do not think that from now on the state can administer the economy."

That observation, unremarkable enough in Britain or the United States, sparked an outraged public debate that reminded Jospin of the narrowness of the path he is treading.

"The government was seen to think it was unable to do anything about something it said was unacceptable, and that looked like weakness," says Gerard Grunberg, author of several books on the French Socialist Party.

"The French Socialist movement still cannot accept that the state should not interfere too much in economic affairs," he adds.

"At bottom, Jospin's policy is one of adapting to economic changes, but this row could be a nuisance to him."

Jospin's troubles, and Schrder's struggles, set beside Blair's relatively easy ride, illustrate how much of an advantage the British leader enjoys when it comes to public attitudes, which are by no means shared on the Continent.

"The real revolution that [British Conservative Prime Minister Margaret] Thatcher accomplished was in changing popular expectations," says David Walker, a political analyst in London.

"People here don't expect anymore to rely on the state when they are old, for example," Mr. Walker adds.

If the French and German electorates felt like that, the Third Way would be a good deal straighter and smoother elsewhere in Europe.

(c) Copyright 1999. The Christian Science Publishing Society