With a Labour Government in Britain and a Socialist Government in France the tide in European politics has turned. Nine of Europe's 15 governments are headed by Socialist or Social Democratic parties and participate in coalitions in another three. Germany and Spain, and recently Ireland, are the only Right-wing governments in the European Union. A German newspaper wrote that Labour's triumph in Britain and the victory of the Left in France, were an indication that two of the most important countries in the European Union had voted for change. A change from the neo-liberal monetarist policies - or for governments that emphasised social concerns over the strict fiscal criteria of the European Monetary Union (EMU) and single currency.In the five weeks since the Labour Government came to power and the week in which the French Socialists formed Government, the European Union has had to re-adjust itself to a new vocabulary and the possibilities of changed priorities. A European Union (EU) dominated by Germany is no longer a given. The German Chancellor, now isolated in a sea of pink in Europe, has also been weakened by a failed attempt to plug a deficit gap by re-valuing the country's gold reserves. Besides, although the French under Lionel Jospin and the British under Tony Blair come from two ends of the Left of centre pool, their common emphasis is on economic recovery and job creation, rather than the single currency time-table driven by Helmut Kohl.This week, the newly installed French Government threw a spanner in the single currency works by announcing that it would not be signing the stability pact for EMU at the EU heads of government meeting next Monday. The pact, agreed to in principle last year, will impose fines on countries who fail to keep their budget deficits under control (3 per cent of GDP unless the country is in recession) once a single European currency gets underway. Members of France's new Socialist Government, elected just a week ago, have said they are unhappy that the pact, officially called the Growth and Stability Pact, is too heavily weighted in favour of price stability at the cost of growth and jobs. French Finance Minister Dominique Strauss-Kahn, told his EU counterparts that his government needed more time to study the framework and to consult the new parliament.Britain's Chancellor, Gordon Brown, backed France's decision and said that employment should be Europe's first priority. Brown told a gathering of EU finance ministers that the time had come to move on from the obsession with the time-table for economic and monetary union. He said that employment was more important than who was going to join in the first round of monetary union in 1999. ``In or out of monetary union, people in Europe now know that unless we face up to the issue of jobs and low growth, Europe will remain sluggish and we will not create the prosperity that everyone wants.'' Brown presented an employment proposal to his EU counterparts that focused on job creation and employability, help for small businesses to create jobs and completing the EU single market. While the Labour Government's proposals accept the principle of labour market reform, and talk of flexible labour markets; they do not amount to a Thatcherite deregulation of the labour market. On the contrary, Labour puts a great deal of weight behind job security and a minimum wage. As well as promoting economic growth and stability, Labour believes that the Government must invest in human capital and create a fair and inclusive society.The new Centre-Left worked its magic. By the end of the day, Holland, which currently holds the rotating EU presidency promised that every effort would be made in the next few days to re-balance the wording of the `Stability Pact' to place far more emphasis on the need for economic growth.The `measure of support' for the French position and the British approach was enough to prompt the Dutch to agree to new wording which would give ``a policy of growth a greater role as part of the discussion''.But, the Centre-Left does not speak with one voice, and in coming months they will have to manoeuvre to accommodate each other. Blair and Jospin represent, to some extent, the old and the new Left. While both the new stars of the European Left put the emphasis on job creation and moving away from policies that had over the last 10 years left 18 million unemployed across Europe, there are deep differences in their approach. Blair stresses the need for competitiveness, skills and enterprise and warns against ``rigidity, unnecessary regulation and old style intervention''. He sees the State as an economic facilitator while Jospin continues to hold that the State is an economic actor with a responsibility to provide jobs.Blair is the messiah of change who has accepted some basic tenet of Thatcherite economic reforms. Jospin, on the other hand, led a party to victory in a country that has escaped Thatcherism and was determined to keep it that way. At the European Social Democratic Parties' Congress in Sweden last week Blair set out an agenda for reform. He said that the task of the Left was not to go on fighting old battles but to show there is a third way, ``a way of marrying flexibility and security in a world of change.''``There are two types of conservative parties,'' he said, ``one is the reactionary party of the Right. The other is the party of the Left that refuses to change.'' Blair warned that Socialist governments in Europe will lose their advantage and be voted out of power if they go back to the old ways of the Left. His `modernise or die' message underlined the fact that unless voters' concern at rising taxes and the need for welfare reform is addressed, people would turn to the extremist parties of the Right.This in some ways was seen as implicitly critical of the new French Government and its election manifesto. But the French Prime Minister emphasised the common ground. He said: ``We are all deeply attached to the European ideal, whatever our differences of opinion.what unites us is stronger than what keeps us apart.'' Jospin also emphasised the fact that in a situation of high unemployment and low growth and increasing impoverishment it was no longer acceptable just to concentrate on the economy. People and their social concerns were the priorities, and he said: ``Europe will only get back on track for growth if we can make short-term non-profitable investments'' in education, research and modernisation.Whatever the differences, `social concerns' are back on the European agenda. But, also an acceptance of reform, and the fact that reforms are needed not to meet the criteria for a single currency, but to modernise society.
