BBC Economics correspondent, Ed Crooks (2'02")

If Tony Blair really wants to take a lead in Europe, then employment may be the field where he has the most to offer. Britain's recent performance has been enviable, halving unemployment over the past five years, while that of Continental countries has, on the whole, been dismal. In France, Germany and Italy, unemployment rates are around twelve per cent, and show little sign of falling.

Europe has 18 million people looking for work. Labour can hardly claim any of the credit for Britain's success, which is mainly due to the pound's devaluation after leaving the European Exchange Rate Mechanism in 1992, and changes to the labour market introduced by successive Conservative governments.

John Philpott of the Employment Policy Institute thinks the Government can make a difference, by challenging the Continental labour regulations and generous state benefits that make up what's known as the European social model. "By protecting people at work it's tended to neglect the needs of people without jobs. And I think it's that issue in particular, how to get the so-called outsiders back into the jobs market so they can contribute to society, that really is at the heart of what the UK Government can try to push forward over the next six months," he said.

Europe is crying out for solutions and Tony Blair will, on the whole, get a sympathetic hearing. But pride may go before a fall. Pam Meadows of the Policy Studies Institute points out that, although a deregulated labour market is important, for jobs to be created the economy must be right. And the British economy is by no means certain to be right next year. "By the Spring of next year, the economy will have been growing steadily for five years, and that's quite a sustained period of boom if we look at it in terms of post-war history. There therefore has to be a worry that the economy will slow down and will stop creating jobs at such a rate.," she said.