But many unions, including leftwing ones in Europe and Canada, have serious questions about the proposal for a social clause. Some equate it with proposals in Europe to make a social contract between labor and capital part of the process of creating a single European economy. The social contract has tended to be a proposal of Europe's more conservative unions. The more radical ones have argued for opposing the process of merging economies itself, rather than negotiating worker protections within an economic framework dominated by transnational corporations and banks. In Europe, the movement towards a single currency and the merger of markets has brought with it austerity formulas for the elimination of social benefits and protections won by workers over the last fifty years.
Social democrats are now in power in Britain, France, Germany and Italy.
In some of those countries workers and unions have been able to reverse the economic trend, and some governments have been more responsive to worker pressure than others. But all these social democratic governments argue that for Europe to make it in the world economy, productivity has to be increased, and social needs and benefits brought into line. That often brings the governing parties into basic conflict with the working-class base which has brought them to power. The conflict is not so different from that which has taken shape in the U.S. between labor and the Clinton administration. The flaw in the social democratic argument is that its assumption and purpose is wrong.