Mr Blair should invite the TUC to his round table

'A platform with Mr Berlusconi was not the ideal place to launch a call for economic reform'

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Leading article: Mr Blair should choose his allies and issues in Europe more carefully

Last Tuesday morning Tony Blair had a breakfast meeting with the European Round Table to discuss the economic issues being debated by the EU summit which will be concluded today in Barcelona. The Round Table includes some of the most powerful CEOs in European industry and represents many more. It's doubtful whether it would have even occurred to Mr Blair to invite in an equivalent delegation of trade union leaders. In any case, no such meeting took place.

But John Monks, the general secretary of the TUC, is a grown-up, remarkably free of personal side. He would not say, as he did this week, that it was "bloody stupid" for Mr Blair to issue a joint call with the Italian premier Silvio Berlusconi for a halt to EU legislation on workers' rights, without a better reason than mere pique at being excluded from Mr Blair's pre-Barcelona breakfast invitation list.

Mr Monks's worries go to the heart of a central, European-wide argument about how to deal with a widely acknowledged problem: Europe's noticeably slower economic growth than that of the US. As the Treasury's recent White Paper on European Economic Reform puts it succinctly: "Had the EU matched US levels of both employment and output per employee in 2000, its output would have been higher by the equivalent of around £5,000 per person per year. The challenge... is to close the gap in economic performance without sacrificing Europe's high levels of social justice."

There is nothing in this with which Mr Monks would disagree. The fear in his mind is that at times Mr Blair may indeed show a willingness to sacrifice "Europe's high levels of social justice". The TUC is not unhappy with the EU economic reform process which began at Lisbon and seeks, with the backing of the European Commission, to spread some distinctly British-style ideas about welfare-to-work, for example, to European countries still paying benefits at levels that act as a disincentive to claimants seeking jobs. But it fears that Mr Blair, who is an ardent champion of less restrictive employment legislation in countries including Germany, France and Italy, to boost EU growth, is slowly seeking, in company with some of the more right-wing European leaders, to strip the EU of the very "social dimension" which converted the British trade union movement to Europe in the first place. Without it, Mr Monks warned, the unions might be rather less keen on the euro.

This is a more complex argument than it looks. There is certainly something in the TUC's view that Mr Blair feels more comfortable – on these issues – with right-of-centre politicians like Spain's Jose Maria Aznar than with the broadly social/Christian democrat consensus reflected by the two French presidential candidates. On the other, Mr Blair is privately optimistic that once this year's elections are over, Gerhard Schröder, if he wins a second term as German Chancellor, will drive ahead with labour market reforms. So Mr Blair may not be so far out on a limb as he looks.

Secondly, the Government has, by signing the Social Chapter, accepted a raft of legislation broadly welcome to the TUC: parental leave, the works council directive for multinationals, anti-discrimination, health and safety, and measures on information and consultation with employees. But there is a limit, it argues, if there are to be more jobs, which the unions ought to want. Yes and no, says the TUC: on the last measure, for example, the Government sought for two years to block the directive – hardly an impediment to growth – and has still given no sign of how it proposes to implement it. Will it have to be dragged to the European court, they ask, to be forced to do so properly?

What's more, the TUC argues, in Sweden, Denmark and Holland, there is high employment and growth with quite a high level of legislation on workers' rights. Yes, say Mr Blair's supporters, but that's because the unions there were responsible enough to agree to economic and social restructuring that Britain only achieved after a long fight with the unions. Can they yet be trusted to show just that kind of responsibility?

Which bring us to another point. Mr Monks, also a moderniser, prefers to have his disagreements in public. But, though Mr Monks has no complaints about having access to Mr Blair when he wants it, Mr Blair did not do very much, after 1997, to build him up as a, perhaps the only, spokesman for the unions he was prepared to do business with and meet regularly, perhaps in parallel with the CBI leadership. This would have afforded less credibility to much more vociferous union critics like John Edmonds, and helped to strengthen the TUC's grip over its affiliates.

Secondly, symbolism does matter. Of course, Mr Blair should be talking to Mr Berlusconi on a wide range of issues. But it's very doubtful whether a platform launched with him – he is after all a highly controversial businessman – was the ideal place from which to persuade doubters of the need for labour-market flexibility. The Government has a strong case. The TUC has a right – duty even – to express its criticisms. Mr Monks acknowledged in his interview that Mr Blair has also done much the unions can thank him for. It wouldn't harm Mr Blair – and as the going gets rougher might actually help – if the Prime Minister had a little more real dialogue with the TUC General Secretary. And it doesn't have to be breakfast.

d.macintyre@independent.co.uk