This month's European Union summit in Barcelona is already being hailed as a likely triumph for free-market ideals. It would be too much to suggest that all Europe's prime ministers intend to sign up to the US model of freewheeling capitalism; but there is no concealing the sense of victory already being displayed by Tony Blair, Gordon Brown and the rest of new Labour's modernisers. The British government may continue to dither on the sidelines of the euro currency zone but, to a surprising extent, it seems to have seized the initiative in identifying itself with plans for the economic liberalisation of Europe.
The clutch of documents going to the Barcelona conference may be written in the bland and boring language beloved of Brussels bureaucrats, but their meaning cannot be in any doubt. They sketch out a sweeping agenda of reform in services, capital and labour markets that seek to transform the EU into a much more neoliberal area, dedicated to the pursuit of profit, ruthless competition and entrepreneurial dynamism.
Two years ago in Lisbon, the heads of government pledged to make the EU "the most competitive and knowledge-based economy in the world". The pace of change faltered, but now it appears to be picking up speed under the Spanish presidency of the EU, as much of the Continent struggles to pull out of recession.
Many on the European left are alarmed. They fear that the kind of modernisation promised will undermine social cohesion and solidarity, threaten workers' rights and weaken trade unions, as well as leading to greater inequality and poverty. There is growing concern that the European model of social justice is under threat.
Blair has done nothing to calm such anxieties. On the contrary, he seems to have gone out of his way to provoke. His visit to Rome last month to consort with the extreme right-wing Italian premier, Silvio Berlusconi, led to particular indignation, as John Lloyd reported here on 25 February. Elizabeth Guigou, France's minister of labour and solidarity, said the Blair/Berlusconi communique, supporting a flexible labour market in the EU, would have a "detrimental impact on the conditions and security of workers". Blair opposes EU regulations that allow part-time workers to enjoy the same statutory rights as full-timers, and he continues to resist any attempt to impose a maximum 48-hour week on Britain. Nor is he keen on the newly proposed EU law that would require firms employing more than 50 workers to create consultative committees. Blair has assured British employers privately that not only is he opposed to any further regulation to strengthen workers' rights, but he wants to see existing laws either abandoned or watered down if they inhibit job creation.
Blair and Berlusconi have already established common ground with Jose MarIa Aznar, the Spanish prime minister, on the need for a deregulation drive. This new axis could cover Germany and France if the right wins power in those countries later this year.
But all is not quite what it might seem on the European left. Shortly after the infamous Rome declaration, Blair was in Stockholm for a summit of centre-left heads of government to hammer out a global programme designed to modernise progressivism. France's Lionel Jospin and Germany's Gerhard Schroder were also there. Sweden's Goran Persson, New Zealand's Helen Clark and Canada's Jean Chretien all signed up to a document which was all that new Labour could have desired and not much out of line with the Rome declaration. They agreed to "reject free-market dogma", but added: "As progressives committed to a fairer, more socially just society, we often advocate novel means to achieve traditional goals. We must be prepared to experiment with different partnerships between the public, private and non-profit sectors." They also embraced a "new concept of citizenship" that "depends on an acceptance by all of clearly defined rights and responsibilities as the only basis for a commitment to tolerance of otherness and difference". Gordon Brown could not have put it better.
Such manifestos reflect the ideological confusion in today's democratic politics, where such traditional terms as left and right seem to have lost all meaning. The current level of political cross-dressing may reflect the realities in France and Germany as Jospin and Schroder face difficult electoral struggles. But the fog threatens to blind us to the ideological chasm that still exists between the US model of capitalism and the concept of a social Europe.
What is at stake is whether the EU can modernise itself without abandoning its traditional ideals of liberty, equality and fraternity. New Labour has virtually written workers and the trade unions out of its script. It would like to do the same in the rest of Europe. Brown's latest document on European economic reform bothers to mention social partnership between employers and workers only twice; the text is little more than a hymn of praise for unadulterated capitalism.
The real issue that needs to be addressed at Barcelona is whether new Labour's vision is shared by the rest of western Europe. Certainly, social Europe cannot succeed without the creation of a more dynamic economy, but it is unlikely to survive as anything more than a warm-sounding slogan if it fails to ensure its ideals resonate among workers and citizens. Blair's new allies - Berlusconi and Aznar - reflect a different tradition. In Barcelona, the left will need to make a start on opposing them.