PAOLA BUONADONNA: All over Europe, the left is in power. Britain, France and Germany all elected left-of-centre governments in just over a year. 11 out of the 15 governments in the European Union are run by Social Democrats. It started with Tony Blair's victory in May 1997. In France Lionel Jospin became Prime Minister a month later. In Germany, Gerhard Schroeder was elected Chancellor last September. Tony Blair has transformed British politics. Now he wants to export his Third Way philosophy to the continent. New Labour says jobs flexibility and market liberalisation is compatible with social justice. But the Third Way strategy is controversial. KEITH VAZ, MP: The Third Way is not a fuzzy compromise between Left and Right. It's a modernisers' agenda for social democracy. And hopefully the philosophy of the Third Way will help to modernise the agenda of social democracy in Europe. PIERRE MOSCOVICI: I don't think the Third Way is exportable, for example in Europe because we have another history. We were for example in France in power during the years our British friends were in opposition. And we don't feel like the Third way is good for us. RUDOLF DRESSLER (Interpreted) We don't want to encourage the British to change anything. That's for them. And the English shouldn't encourage us to give up our system. That is for us to decide. BUONADDONA: Tomorrow, Europe's Social Democratic leaders will gather here in Paris for a meeting of the Socialist International. They'll try to agree a common platform for Socialism in the next century - but it won't be easy - Gerhard Schroeder's SPD is split, Lionel Jospin will present his own blueprint, which he calls The New Alliance and is very different from Tony Blair's Third Way. Both the French and the British Prime Ministers are very keen to assert their leadership of the Left in Europe. The meeting will take place in the gleaming business complex of La Defence, at the edge of Paris, a symbol of the modernity of the French economy. Tony Blair will only visit briefly. There will be another conference of centre-left leaders in Florence in 2 weeks. But it is here in Paris that discussions of the different visions of the future will begin. French Senator Henri Weber is the main author of Jopsin's paper. He believes the role of social democracy is to mediate between capital and labour. The need to protect the workers is all the more important in the age of global markets. SENATOR HENRI WEBER: The underlying principle of French Socialism and possibly the key difference between us and Tony Blair is that we have retained a very critical stance vis a vis contemporary capitalism. Basically we are in favour of market-driven economics, freedom of enterprise and we are keen to foster private development at all levels but we also believe that the state, the public authorities at local, regional, national and European level should play a central role in both economics and social affairs. BUONADONNA: France hasn't embraced New Labour's approach to reform. The German Chancellor Gerhard Schroeder adopted the Third Way - which he renamed the New Centre - by signing a joint manifesto with Tony Blair just before the June European elections. It created a rift with Lionel Jospin, who felt slighted by what he saw as Tony Blair's attempt to muscle in on the special Franco-German relationship. But it also caused tensions within Schroeder's own party and critics say it's cost him a succession of electoral defeats . DRESSLER: The paper may be tailor made for the British situation - I don't want to pass judgement on that - but to transfer this to Germany must lead to misunderstandings, must lead to irritation and raise questions which cannot be answered in the way as in Britain.. BUONADONNA: Anthony Giddens, the leading British exponent of the Third Way, drew the political in-crowd at this conference in the centre of Berlin on Thursday. BUONADONNA: Among the Giddens admirers gathered here, is Government economics minister Siegmar Mosdorf. He wants to modernise the German economy but believes that Germany must find its own way to do that which may involve high welfare spending as well as increased taxes on the rich. SIEGMAR MOSDORF: We don't need a softer language, we don't need more compromises, we need a very strong, very straight position also in the government. But we must explain it and we must have the philosophy. What we want to do is to say to the people and also to the members of the party that we have clear goals for the future together with Tony Blair, but we must go different ways because of the different situations in the countries. BUONADONNA: Attitudes to public spending redistribution and job flexibility differ widely in Britain and the Continent. The Blair Schr�der document says that having the same job for life is a thing of the past, Social Democrats must accommodate the growing demands for flexibility. It calls for a business friendly environment with less regulation. Whereas the French Socialist Party says Social Democrats must pursue an employment policy which respects the right to work and doesn't encourage job insecurity. It believes that new forms of regulation are needed to control the new global market place. MOSCOVICI: Flexibility in French is an awful word, it means that the workers are totally submitted to the will of the firms, that they are like objects or merchandise and that's what we don't want. BUONADONNA: One way in which the French government prevents it is through state control - half of Renault is still owned by the state. France also offers much greater employment protection to its workforce. And from next January there will be a thirty-five hour week which Jospin's government believes will generate more jobs. But while France's economic growth is the envy of Europe, unemployment at eleven per cent is still nearly double that of Britain. CHARLES GRANT: Jospin's introduction of the thirty-five hour working week is an old left style measure rather than a Blairite measure. However, at the same time that this thirty-five hour working week is being introduced much more flexible working practices are coming at the same time. So even there they're using the thirty-five hour working week to modernise some aspects of the French economy so the overall effect may not be harmful. BUONADONNA: There is also debate on taxation, spending and the welfare state. The Anglo-German manifesto says: 'Public expenditure has more or less reached the limits of acceptability. Constraints on 'tax and spend' force radical modernisation of the public sector.' The French Socialists agree and also argue that social investment on health, education and training cannot replace the traditional function of the welfare state. In other words, the state will always have to provide the generous safety net. France spends considerably more on its railways than Britain does. The railway network SNCF is still totally state owned. The French government is convinced that publicly run industries can provide a better service than private companies. MOSCOVICI: We believe that there are some public expenses which are at the same time just and efficient, especially those who are made up for preparing the future. If we invest in innovation and if we invest on the information society, if we invest on space, if we invest on also public infrastructure which are necessary for the people, in trains for example, well this is useful and this is why we're still in favour of an efficient public spending. VAZ: This is not a competition between Britain and our partners in the rest of Europe. I think every finance minister in Europe and indeed in the world will want to ensure that they are prudent with public expenditure as Gordon Brown has been. BUONADONNA: There's another important difference. The Third Way document says that: "in the past the promotion of social justice was sometimes confused with the imposition of equality of outcome." The emphasis is on people taking more individual responsibility for their welfare. The French manifesto says that: 'the goal for Socialist governments is to win people over to the idea of redistribution." They must listen to the middle classes but try to persuade them to accept left-wing policies. WEBER: This implies that income must be taken from the well to do, from those who benefit most from progress because our economic growth is not the result of the achievements of this or that individual but of the combined efforts of society as a whole. VAZ: We believe fundamentally in the values that we've always had but we also believe that those values need to be made relevant to the lives of people in this country, not words on pieces of paper but actual deeds. We have been able to do what we've done for the British people because we have got a strong economy and we promised to be prudent. BUONADONNA: Here in London, the question of the future of Socialism in Europe may appear remote. But the scope and pace of economic reforms on the continent is central to Downing Street's strategy on the European Single Currency. Tony Blair hoped to use the Third Way to persuade the British public that France and Germany, the engines of the Euro, would follow New Labour's lead in modernising their economies. Yet only five months after the launch of the Anglo-German manifesto the rest of Europe seems far from persuaded. GRANT: I think Tony Blair is keen to export the idea of the Third Way to Europe, because he wants to be seen to lead in Europe. It's a kind of intellectual leadership he's searching. MOSCOVICI: One of the reasons why there cannot be for the time being British leadership in the socialist movement is that you didn't make for the time being the total choice of Europe. Britain can be a leader in Europe and I'm looking for that, I'm expecting it, but when the pound will be part of the Euro, because the Euro is our main common realisation and this is why for the moment I think that the British Labour is not totally at the centre of the European socialist movement. VAZ: I've had many conversations with Pierre and indeed other Euro ministers who are like minded, they all believe there are lots of common values that we can work on. There is no question of anybody trying to impose views BUONADONNA: Europe is changing - what started as a common market is now a currency area and could even become a political union. But the leaders of the centre-left parties which rule most of the EU subscribe to very different philosophies. Whoever wins their ideological battle may decide the future shape of Europe.