THE WHITE HOUSE

Office of the Press Secretary

                        REMARKS BY THE PRESIDENT
                       AND OTHER PARTICIPANTS IN
                      DEMOCRATIC LEADERSHIP FORUM
                THE THIRD WAY: PROGRESSIVE GOVERNANCE FOR
                           THE 21ST CENTURY

                     National Press Club Building
                            Washington. D.C.

5:21 P.M. EDT

MR. FROM: Good afternoon. I'm Al From, President of the Democratic Leadership Council.

Welcome to this historic forum, entitled "The Third Way: Progressive Governance for the 21st Century." We are honored today by the presence of so many international leaders of the Third Way. The Democratic Leadership Council is an idea action center, dedicated to developing Third Way philosophy and a Third Way governing agenda. We are gratified and amazed to see similar themes cropping up all over the democratic world.

Ten years ago this week, Governor Bill Clinton agreed to become chairman of the DLC. Many of the new Democrats' themes -- (laughter and applause) -- many of the new Democrats' themes and ideas developed during his chairmanship have defined the Third Way in America, and as President he has put them into action.

Shortly after the 1992 election, we were first visited by a member of the Shadow Cabinet, Tony Blair, who was beginning his efforts to modernize the Labour Party in the United Kingdom. How far we've come in just one decade. Today's event is the latest in a series of conversations on Third Way politics that began at Chequers in November 1997, and continued last year at the White House and New York University. Today, three key continental leaders are joining this global conversation.

And before I talk about what we're going to do today, I want to recognize the one American who has done more to get this conversation underway than any other, the First Lady of the United States, Hillary Rodham Clinton. (Applause.)

This forum comes against the backdrop of NATO's 50th anniversary celebration. It will focus on new social and political questions posed by economic change and globalization. Its purpose is to highlight the common values and priorities that motivate Third Way leaders as they seek to strike a new balance between the imperatives of economic dynamism and social justice. Whether they're called New Democratic, New Labor, or the New Middle, the values, ideas, and approaches to governing for the Third Way are modernizing center-left politics around the globe.

They are grounded in a public philosophy that embodies fundamental progressive principles further by innovative ideas and modern means. The Third Way philosophy can be summarized this way: its first principle and enduring purpose is equal opportunity for all, special privilege for none. Its public ethic is mutual responsibility. Its core value is community. Its outlook is global and its modern means are fostering private-sector economic growth, today's prerequisite for opportunity for all, and promoting an empowering government that equips citizens with the tools they need to get ahead.

To lead our discussion, I'm honored to turn the program over to the man whose leadership has shaped the Third Way, the President of the United States. (Applause.)

PRESIDENT CLINTON: Thank you very much. I'd like to begin just by expressing my profound gratitude to Al From, and to all the people at the Democratic Leadership Council for having the passion and the patience to work at this for years and years and years.

I, too, want to thank Hillary and the hearty band within the White House who keep us focused on the big ideas and values that got us here in the first place. And I'd like to say a special word of thanks to my friend and aide, Sidney Blumenthal, for the work that he's done in trying to put this meeting together.

I would also like to just very briefly say how very much I admire the people who are here with me at this table today -- how much I have learned from them, how much I look forward to working with them at every opportunity. Wim Kok, from the Netherlands, actually was doing all this before we were. He just didn't know that -- he didn't have anybody like Al From who could put a good label on it. (Laughter.) But he was doing it, for years and years and years.

Tony Blair has made me long for a parliamentary system. (Laughter and applause.) Gerhard Schroeder had to wait even longer than I did -- (laughter) -- and was also a distinguished governor. And Massimo D'Alema has proved that you -- I think -- I'll make you a prediction here -- I think he is already proving that even in Italy, where governments tend to be like the flavor of the month for ice cream, that the right sort of politics can have a sustained long-term impact on some of the most wonderful people in the world. So I'm honored to be here with all of them.

I'd like to thank my friend and ally, Congressman Cal Dooley, who is out there; the Secretary of Transportation, Rodney Slater; the Secretary of the Army, Luis Caldera, who helped me in so many ways. And we're going to hear afterward from Lt. Governor Kathleen Kennedy Townsend, former Governor and Democratic Party Chairman Roy Romer; Mayor Wellington Webb of Denver; and Commissioner Michael Thurman. I thank them.

All of you know we've just finished a three-day NATO conference, celebrating the 50th anniversary of NATO, bringing in new members, celebrating an astonishing partnership with over 40 countries, including the countries of Southeastern Europe, all except for Serbia, and the countries of Central Asia in this amazing new group which, itself, is full of Third Way questions.

At our last luncheon, one of the members made a crack that we had five members of the last Politburo of the Soviet Union sitting around our table today. And another one said, yes, and a lot of the rest of us should have been on the Politburo, but we weren't. (Laughter.) And it was a picture of how much the world has changed.

What gives rise to this kind of politics, when the old order is destroyed or when the realities of daily life or popular dreams can no longer be accommodated by a given set of political arrangements through a political debate? We see that in Southeastern Europe today, with the crisis in Kosovo, where the old choices between state stability and being consumed by ethnic hatreds, and what we're arguing for is a new integration based on the embrace of difference, not the oppression of it.

I would like to just pose a couple of questions, and then let our panelists take off. Your heard Al From say that basically our lodestars have always been in the United States the concept of opportunity, responsibility and community. We worked on this for years. We tried to think of simpler and more complex ways to say what we stand for, but we've never done any better than that.

So I think I will just leave it there. But let me say, what could that mean in the present time? What is giving rise to all these people's elections? Why is this happening everywhere? It's not some blind coincidence. I believe it is because the social arrangements which were developed within countries and the international arrangements among them, which grew up from the Great Depression through the second world war, and then the Cold War, are no longer adequate to meet the challenges of the day.

And most of the parties of the right made a living by beating us in elections by saying how bad we were. And whatever -- we were always for more government and they were for less of it. And if you thought it was, by definition, bad, then less is always better than more.

So they had quite a run in the 1980s. And then it became readily apparent that that didn't really solve any problems. And that they were serious questions that demanded serious answers. So I will just pose three, and then let our panelists go in whatever order they would like.

It seems to me that the great question that any political party that purports to represent ordinary citizens must answer is, how do you make the most of the economic possibilities of the global information economy and still preserve the social contract? What can governments do to help make sure that every responsible citizen has a chance to succeed in the global economy? And how can we discharge our responsibilities, as the leaders of wealthy countries, to put a human face on the global economy so that in other countries, as well, no one who's willing to work is left behind.

The second question I'd like to ask is, what is the nature of the social contract now, and how is it different from what it used to be? What does it mean? Are there entitlements that we should still have? Beyond entitlements, what are the empowerment issues of the social contract? What is the role of the private sector and the relationship of the government to it?

And, finally, what do we mean by the concept of community? Who's in, who's out? And how can we create a concept of both national and international community that is a more powerful magnet drawing people together than the awful magnets pulling them apart, rooted in racial and ethnic and religious difference throughout the world?

And I will leave with that. It is a cruel irony that in this world we're entering that we have always celebrated in our dreams as a place of unbelievable technological explosion, unbelievable scientific advance, unbelievable advances in health care, and using computer technology to empower people in small African and Latin American villages, for example, to learn things -- would be dominated by the most primitive hatreds in all of human history, those rooted in our basic fear of people who are different from us. How can we construct a community in which those forces pulling us together are more powerful than those tearing us apart?

There are hundreds of questions we debate all the time, but just about every question we debate falls within one of those three categories. And so having set it up like that, we have no agenda, and I'll just turn it over to our friends.

Mr. Blair, would you like to go first?

PRIME MINISTER BLAIR: Thank you, Mr. President, and I think the first thing I would like to say is how delighted I am to take part in this event, and to thank Al From and the Democratic Leadership Council for having hosted it -- and I think, probably on behalf of all the leaders who attended this summit, to apologize to the people of Washington for the inconvenience that we've caused them. But it's just as well we're not running for election here, but -- (laughter.)

I also want to say a word of thanks to the President as well. I believe what happened over these past few days will in time be seen as something quite historic. I think we have witnessed a little piece of history in these last few days. And I don't know about my other colleagues, but I found, when I was sitting round the table today with people from all sorts of different countries, who would have considered themselves in a different world, really, from us, a few years ago, there was something quite humbling about their desire to be part of our family -- about their tremendous innocence, in the best sense of the word, belief in the values of democracy and justice and freedom, and creating a better society and better world.

I think something happened this weekend that I think was remarkable, and it wouldn't have happened without the leadership and the vision of President Bill Clinton. And thank you for that. (Applause.)

On the Third Way, itself -- and as Ger Schroeder was saying to me on the way in, look, I haven't found the first two ways yet, so you tell me where the third one is, but -- (laughter) -- on the Third Way, itself, I think we start from one simple proposition. And I find this when I talk to people in no matter what part of the world we're in, which is why this idea of dialogue I think is so important.

All countries have different ways of coping with these two basic problems -- how you get economic prosperity in a world of economic globalization and massive technological change, number one; and number two, when societies are changing, families are changing, lifestyles are changing, the whole way that the people live their life in our society is changing, and how you provide social stability in these times. I think those are the two things that confront us always, the whole time -- how do you provide prosperity in this world of economic change, how do you provide stability in this world of social change?

Now, the way that I define the Third Way is this, that what I would call, really, if I could use British or European terms, what I would call the old left would have almost tried to resist change, would just have said, we don't like this change. And we became associated with high taxes, producer interests, big government. In terms of crime, for example, we were often perceived as simply soft on crime, indifferent to it, more worried about the rights of those committing crimes than those people that were victims of it -- and, basically, didn't appear to have answers to these problems of the future. That was the old left.

The new right that was produced in a sense as a sort of counter-revolution to that, in the '80s, thought the solution to everything was just get rid of government, just get it out -- as little of it as possible, get rid of it all, economics of laissez faire and socially, often I think indifferent to what was actually breaking apart the bonds of society.

Now, I think that our whole process, really, for the center and center-left is a voyage of rediscovery. What is it that we're really, really about? And I believe what we're really, really about is the politics of community, summed up as Al From put it -- community, opportunity, responsibility.

And I think that, then, leads to four different parts from that, that derive from that basic principle. In other words, it's about reasserting ourselves as a party of values -- not as a party of fixed ideological or policy positions, but party values -- and then it's saying, well, how do you apply those values to these great economic and social changes.

I think there are four parts, as I say. I think, first of all, in economic terms, we define the new role for government. And the role for government is not old-style corporatism or heavy-handed intervention, it's essentially about government's role in promoting education, skills, technological advance, small businesses, entrepreneurship -- it's a role for government, but it's not the role that it used to be. And it's distinguishable, both from the old politics of heavy-handed intervention and some of the new right politics, which is laissez-faire.

In social terms, it's about the concept of a modern civic society. I'll tell you what my generation wants, I believe. We went through a period in the '60s where, if you like, people just sort of said, well, you do your own thing. I think want my generation and younger wants -- and I notice this with young people in my society, particularly today -- is they want a society that is free from prejudice, but not free from rules. So they want to make sure that the sexual and racial equality, that there isn't discrimination against people -- they don't actually believe that its tolerable that old ladies are beaten up by young thugs.

So and neither do they believe it's tolerable that someone simply takes money off the welfare state and feels no sense of responsibility toward the society in which they live. So I think it's also, then, secondly, about a civic society based on rights and duties.

Thirdly, if you do believe in active community, you have to redefine and reinvent government. And this is what this administration here and Vice President Gore have done an immense amount in really pioneering work on. But all of us in our different ways are trying to reinvent the institutions of government. You do things differently, different mechanisms -- sometimes you use the voluntary sector, there will be partnerships between public and private sector; decentralized government will be done in a different way than it was before.

And the fourth area -- which is why I think it's good in a way that we are having this seminar, even though the whole of this weekend has been overshadowed by Kosovo -- because I think the fourth principle that derives from our belief in community, opportunity, responsibility, is a belief that this applies internationally as well as nationally. And, therefore, when we say what is happening in Kosovo is utterly unacceptable and we are not going to tolerate it, we will stand up to the rights of oppressed people there, that is every bit as much about our values as it is about strategic interest.

And so, internationally, I think we are people that are outward, not isolationists. And what I noticed with a lot of the talk on parts of the right in my country and other countries, is they increasingly retreat into a sense of national interest that I believe ultimately is contrary to national interest, because it seeks to shut nations off from each other in the world at large.

So I think, derived from a rediscovery of our essential values -- the belief in community, opportunity and responsibility as being the basis for that -- a derivation from those values in the economic, the social, the government, and the international sphere, adds up to practical policies in the end. It's an agenda of values and principles that ends up with practical policies that make a different to the people whose lives we're looking after, and trying to help.

And a couple of other things, by way of finishing. The first is that I think it's really important in this that we understand that the people at the table are all in government. I mean, Bill, and Massimo and Ger and I have been in government a little bit shorter, I should say, but for Wim and Bill -- all of us, we've been doing these things. I mean, there's actually policy content to this. And the policy content is driven by these ideas and values, and that is very, very important. Because in the end what is important also is to give a sense of vision in which the values, the principles, and the policies form one seamless line.

And the other final comment is this: It is very important, in my view, for this whole project of renewal to be a dynamic project. Our center is a dynamic center. It's not a soggy center. It's not just the lowest common denominator between left and right. It is a genuine attempt to address the problems of the future according to the principles of justice. And I truly believe that it offers a new, different, radical and better way forward for politics in the 21st century. (Applause.)

PRIME MINISTER KOK: Thank you. Allow me, please, to join first Tony when he made his comments on this, this weekend, this NATO summit. The summit was, of course, overshadowed by what is still happening in Kosovo. And I think the outcome of the summit is encouraging, in terms of unity -- and not in an unnatural way -- unity between the member states of NATO, in spite of the fact that there are, of course, nuances, because I very much understand the specific position where, for example, Italy and Greece are located so closely to Serbia and to Kosovo -- that makes a difference. But there's unity.

And on top of that, we have that very, very remarkable experience of having such a large family of 19 members and 23 other countries together around one and the same table. And that shows that in the new century, NATO will be as necessary as before, but will be a different, new NATO, based on the same values -- rule of law, justice, against crime, against inhumanity. We will do it in another way, in accordance with the new situation. And I'm most happy that we're under your leadership here.

Having said that, I come to the item of today -- as you said yourself, Bill, we put it into practice without having the label on it, the Third Way. Sometimes I have the impression that the Third Way is a very broad Third Avenue, but -- (laughter) -- anyhow, it is symbolic for renewal.

And I like the approach very much, because -- well, I am Prime Minister of a relatively small European country, only 16 million people. An open economy, very dependent on international trade, a high share of our national income is exported and imported. So we became perhaps earlier aware of the necessity to change and to adapt some other larger economies in Europe and outside Europe. And I'm proud to be a citizen of a country where we have a very high social standard.

I think we belong together with the Scandinavian countries, to the countries who have the highest level of social benefits, which is good, but, if you are not very careful, dangerous at the same time. Because in these modern times, people do not just -- must have the right to be protected if they need to be protected, in terms of social standards, of social care; but people also must feel the urgency of responsibility. Opportunities is one thing, responsibility is the other thing. And solidarity, in fact, has two aspects. People who cannot take care of themselves must be protected in a decent way.

But the taxpayer -- that's also the average worker and worker family -- must know that what he or she is paid is dealt with in an appropriate way, by those who get the money. So, participation and responsibility is as important as solidarity. We have -- solidarity is a two-way Third Way -- a two-way road. (Laughter.)

So what we did, what we had to do is renewing the social system, not by breaking down these walls of social standards, but by activating social security policies, bringing people from welfare to work, and making people responsible for their own decisions, and also being, in community terms, being straight-forward. Because you have rights, but also responsibilities.

I'm like Tony Blair, very much in favor of taking change as reality, because we are living in a world -- an interdependent world, where change is a must. New technologies are not only a danger for some people, but offer opportunities and possibilities, and these can be translated into new possibilities.

What that means to the government must be an empowering government offering the tools to people on the basis of equal opportunities to make the best out of their life. But then we must be very keen, of course -- when we use the word community, we must know that there are not only winners, that too many people also in my country -- and it will not be different in other European countries or here in the United States -- who will never be the winners because of technological change. Where empowerment and where the modern possibilities of training and education are not possible anymore.

So we have only a community if the winners feel responsible for the losers and make -- give the best possible opportunities for those who cannot afford to follow the rhythm and the speed of technological change to have a good living. And this is true for the national case. It is also true for the international case.

We have, again, in the international world, of course, to stress what we have to do in terms of giving help and showing solidarity with the poorer countries. But they must also be in the possibility to do so. So that relief for the countries in the most miserable financial situation -- in African countries, for example, is a must. If we don't do so, give them the possibility to get rid of their debts, because they pay more money on interest rates because of the debt than they even earn, then the spiral is going all the time deeper and deeper. That's also community and that is done in my approach also, part of our approach.

And my final word is, let's not forget the ecological aspect of what we are doing, because the quality of our lives, and the quality of our future, will be based not only on the basis of material progress -- on profits, or salaries, or whatsoever -- we want to have a world for our children and our grandchildren that is really worthwhile. And that means that we must be prepared, in our own economies and altogether -- and quite often it can be better done in the international field than just nationally -- to pursue policies that are not always popular, but are necessary to prepare a better world for the next generation.

Thank you. (Applause.)

PRESIDENT CLINTON: Gerhard?

CHANCELLOR SCHROEDER: Well, the search for a Third Way has got historical reasons, or historical origins. People have put the question, I think even longer than ten years ago -- I mean, some of us have been working for ten years or more -- but with us, is there an alternative to neoliberalism on the one hand side, and some kind of orthodox state socialism on the other hand?

That is the reason why people have started for a Third Way, because both of those tracks have been discovered to be misorientations and -- well, misguided ways. People who are dealing with the question of a Third Way will have to answer the questions as to how one can lead developed industrial societies, industrial countries, successfully in the new millennium.

And I think if we're looking for an answer to that question then it makes sense to deal with the things that already exist in our world. For example, we've got the Southeast Asian model. Possibly, if you look to Southeast Asia you can see it most obviously what I mean.

That model is based upon the fact that capital has accumulated in the hands of only a very few; access to education has been restricted to very few; and the wide areas and the wide masses of the working populous have been forced to forego their participation in wealth, education and affluence through political means.

I would like to say that one of the origins, the root causes for the Asian crisis is to be found right there. The European model has a completely different one. After the second world war people tried to venture upon a path that they called social market economy in Germany where they tried to emphasize the word "social," and that was not based upon the wider masses of the population, the worker, foregoing their just share for prosperity within their society and their just share of education. But it was based upon participation and involvement of the working masses.

They were given their fair share of prosperity within their society. And if you ask yourself what could be the flesh to the bone of the Third Way, then I think we have to go back to those roots. For me, Third Way means participation of as many as possible. Participation in the values that the society holds precious, but also regarding vocation, training, education, et cetera.

And whenever I am involved in a discussion of the Third Way, then I'm normally doing it in such a way that I say we need to make sure that as many people as possible can participate in, can share in the opportunities, but also responsibilities within the society. And I think if that is understood, if we are talking about participation and co-determination within that society -- and I think that holds true for women as well as for men -- then I think you have found a definition for the Third Way that ties with itself, within itself. I think you then only have to go in and determine what does that mean in the individual detail.

And I would like to respond to a few of the questions that President Clinton just put, and I'll try to answer them. I, by the way, also think that the experience with systems that promise to make mankind happy and lucky have shown that the true magic formula here doesn't exist, and that in real life one has to go in and run an experiment to keep the good things and then throw away what's bad. I think trial and error is an important principle here. It seems to become ever more important when we see how complex these industrialized societies are these days.

But let me come back to those questions the President has said, which economic opportunities are the ones that we can grab; which ones can we use. I think that is a good question in this context. And I think there would be a general answer to that question, but it needs formulating in detail as well. If we tried to provide economic opportunities for as many people as possible, we need economic growth.

But the question is, what is economic growth within our environment under our circumstances. My proposition will be that growth in economic terms is an increase in knowledge and an increase in skills. That is, I think, what holds true for our society today.

And that leads me to what I think is the crucial question here -- how can we make sure that we keep all people and all parts of our society up and running, and keep them involved in the offer of knowledge and education. Because only if we manage to do so can they partake in the prosperity thereof as well.

So we need an utmost degree of education and training available to as many people as possible. But it's not just something that is demanded by humanity, but it makes economic sense. Because I think if economic growth and prosperity in the future is more knowledge-based than ever, and if new products are going to be even more knowledge-based and skills-based than they ever have been in the past, then I think the criterion that will decide about the fate of a society, fate of a country in a positive or negative sense will be exactly that.

The second question that was put to us -- what is, sir, the relationship between justified demands within a society and the responsibilities -- I think in market economies today, we do not have a legal right, but certainly a moral right, an entitlement, I should rather say, to education and work, a job afterwards. If that holds true, though, then that should be balanced by the responsibility to then also do work thereafter. And he also holds the responsibility to undergo vocational training and make the effort.

You may be too young or you may be too old; in that case, it's up to your society to look after you and protect you, but it has to be very obvious. And that is really where our Social Democrats made mistakes in the past. It has to be obvious. And that is really where democrats made mistakes in the past. It has to be very obvious that just as Wim just said, solidarity is a two-way street, it is not a one-way street. Solidarity means the that person has to do whatever they can for themselves and their family. And only if they fail or are entirely unable to do so, only then does solidarity within the society mean that that society has to look after him and care for him.

I think that the demands that we are faced with from our citizens, that there are very obvious responsibilities. On the other hand, we really need to implement that. And I think he who does not comply with his duties and responsibilities should lose his original entitlement to the solidarity, namely, the support by the state. I think that is justice. It is a justified model, because otherwise, the people who bring the performance, the people who earn the money will finally say they're no longer ready to support the weak ones.

The third thing we need to do is that we need to come to some common-sensical ration between private factors on the one hand side and public factors on the other. And if you look at America -- I think our European tradition is a little different from yours. Here in the U.S. it always went without saying that the private sector was the prior one and it was strong and it was seen positively. And I think if we had a healthier relationship and in Europe and Germany, between the private sector and the public sector -- I think if we adopt some of the things you have done here in America in that field, then we could certainly gain. And I think possibly in a similar way, Americans could gain from taking over some of our educational approaches.

And I think the vocational training system, for example, we had in Germany -- for quite a long time it was debated -- also, in America -- whether some of that should be taken to and be brought to the U.S. I remember that Mrs. Clinton very much thought about creating a health sector that wasn't meant to be very similar or the same as in Germany or in Europe, but to adopt certain components that were already in existence in Europe.

So I think we can really learn from one another here, and I think as to this healthy relationship between the private sector and public sector, Germany can certainly learn a lot from America -- certainly when it is about the question of the flexibility of the markets. And in the markets I include the labor market, as well. But if I understand Europe as one thing, then I think that degree of flexibility is difficult. Because, I mean, in Europe you have all the different languages. I mean, you can see my English is just not good enough to get across to you what I want to say. So that is something that does factually restrict mobility across Europe. And also the very different state cultures and traditions are dividing factors to some degree.

But nevertheless, I think the high degree of flexibility that you have here in America, the flexibility, and the dynamism, of course, arising from it, and the momentum, is something that we would like to share with you. I think we do not just need a new relationship between the private sector and the public sector. But if you want to put it like that, on the vertical level we need the same things.

Let me explain. Even if there are certain responsibilities that lie within the responsibility of the state, the state is not necessarily the same as the field of politics. So if you tell the state that those are crucial tasks to be looked after the state -- hopefully, less than the state was supposed to be doing in the past, but still -- then the question still is on which level of that state are those different tasks looked into.

In Germany, we've got this principle of subsidiarity. That is, by the way, something that is also important for Europe. And the principle behind that term is easy. So everything and anything that can be decided very close to the people can be decided and should be decided there. And that makes sense because the closer the decision to the persons affected by it, the more easy to understand, the more direct, the more close. And I think the more removed the decision-making body is, the more difficult to find the legitimation for that decision-making process, and the more difficult for the people affected to understand it.

So the principle of subsidiarity means that the tasks that can be done by a local authority should not be transferred to the next level or the second next level, but they should have actually been taken on the local authority level. And there yet again, I think we can learn a lot from America because this is a very well-developed addition here in this country.

And I think if we make ourselves aware of the fact that the Third Way means letting as many people as possible participation in the haves and in the say within their society, and then break that down on to the different detailed levels, then I think that the Third Way must never be understood as a closed circle or as a closed system that we just put on to our people as if we were putting on a hat, but as a context that needs to be open, stay open to change.

Because I think the worst thing we could do, that we take our dynamically changing society, our dynamically changing environment, with an economy that develops dramatically -- it skyrockets in some areas -- that we apply static systems to it. That was the reason why state socialism was doomed to fail in the first place, because those two can never go together.

So if we then understand the Third Way as an open system, then we also understand that the right tool to develop it further is dialogue and learning from one another. And that's what we're trying to do here. (Applause.)

PRESIDENT D'ALEMA: First of all, let me tell you that this meeting of NATO leaders has been a great success, and this wasn't at all to be taken for granted. This summit was held during hard times because a war is a war. It is a burden to bear, even when this war is waged with very good motivations and with very great belief in these motivations.

We have come out of this summit more united, more determined, and there are differences, but they are differences in the tones that were used. But we do have a common strategy, and this strategy aims at achieving a just peace. We said, and we stated at the summit that we shall not rest at peace until these people who have been deported and humiliated go back to their homes. We intend to use both force and politics to achieve this goal. Then some of us maybe threaten the use of force more, and others are stressing the use of politics, rather. But this is not really a division among us.

Italy is right there, very close to the scene -- we're a front-line country. But Italy is not outside the action that is being carried on. We have 42 aircraft; we have helicopters engaged; we have 5,000 troops in Bosnia, Macedonia and Albania; we have 2,000 Italian civilians who are assisting and providing relief to refugees in Albania; we have ships doing the work, together with the other forces of the Atlantic Alliance. We have been there right from the start and we shall be there to the end. (Applause.)

This is something that I wanted to say. There's a saying between Germans and Italians, according to which Germans love Italians and Italy; whereas Italians respect Germans and Germany. I have answered to those who reminded me of this expression -- I find the Germans very lovable. And I do think that Italians must be respected, or must learn to become respectable. (Laughter and applause.)

This is very important for me. Italy's a serious country when it takes up an engagement, and a commitment; even when such commitments have to be taken with a heavy heart, as in this circumstance.

The Third Way, in my opinion, is a major cultural challenge, first of all. In the course of this century, we have experienced open democratic societies -- very dynamic ones, very competitive ones. But these societies also have suffered a sickness -- social injustice. In these societies, it is easy to race towards success, but at the same time in these societies, those who do not make it dropped out, and they are left at the margins.

At the same time we've had other experiences, societies that were able to develop systems of solidarity and social protection, but through heavy bureaucratic systems in such a way that these systems have, in fact, slowed down development, dynamics and the possibility of attaining success.

The Third Way is the effort to find a meeting point between the positive aspects of these two major experiences. Is it possible to have a dynamic economics and the society based on solidarity? I think it is. But this is a challenge. There is no prescription that you can write down for this. It is an attempt, an effort that is pursued day after day. The Third Way is not an ideology. The answers are to be found day after day and have to be tried and tested. The need for a Third Way is the result of a crisis of ideologies, not of the victory of ideologies.

So I like to raise this issue also when talking about values and cultures. The idea of social solidarity in the 20th century all too often was accompanied by the idea of authoritarianism. And freedom, all too often, has shown the face of inequality. And the conflict between these values has left a deep mark on the 20th century. It has even been an armed conflict, the conflict between solidarity and freedom. If we intend to open up the way to a new age, we must find a peaceful coexistence between solidarity and freedom.

I think that this approach to the issue has also got something to do with the question of the dialogue between Europe and America. America, after all, has been and is the great dynamic country, being dynamic and the country of progress. West Europe in different ways has experienced systems of solidarity through authoritarianism in Eastern Europe and through democracy in the West, but with some bureaucracy involved in the West, too.

For geographic reasons maybe, Tony Blair is sort of a bridge between these two cultures and these two experiences. But I think this is an important and positive role to play. And I think he is performing this role, and will perform this role, effectively if he involves the whole of the European left in this dialogue. This is a problem. This is a question. I think we Europeans should not be divided. I think we should move towards this new cultural challenge united.

I'd like to say a few things on the questions that were asked -- I'm trying to be a bit more precise in my answers, but let me say -- in order to win this challenge, probably we'll need less national government, less central government, but greater governance over local processes. I think the direction of our efforts -- when we talk of crisis of community, well the crisis is of national communities, particularly when it is accompanied by an ethnic and religious view of what the national community is. But our leverage should be local communities, should be the actual physical community among people. The living community of people -- because solidarity, as it is developed at that level is less bureaucratic, less cumbersome.

And we should introduce a notion of a global community, as well. After all, what have these new friends who have opened up to the dialogue with the West and with America told us? They have told us that if we wish to guarantee peace, we should give these people a chance, an opportunity of development and growth. They have told us that we cannot be content with just giving opportunities to the individuals who live within our societies; that is not enough. We have a larger responsibility there. We must give opportunities to people, and we should have a global view of responsibility and community.

In the official fora, I expressed no congratulations or words of thanks to the President of the United States. Maybe that was too official. I'd like to say a few words here, sincerely speaking, with great sincerity. In these days, we have been successful because President Clinton didn't just talk the language of force and determination, he also has spoken words of hope. And I think we shall be successful if we keep this hope alive, and if we feed it through concrete choices.

In a few days, we shall meet in the G-7. We will have to talk about debt of the poorer countries. Tomorrow, there will be the discussion on the interim committee of the Monetary Fund. I think the real challenge of the Third Way is to take action, take decisions, which are difficult. It was difficult to decide to go and fight for Kosovo. We should show the same determination when we decide to pardon the debt of the poorest countries that will never be able to pay back because they're too poor. We should show the same determination and force in taking the decisions that are needed to seed hope. And that's what I wanted to say.

Thank you. (Applause.)

PRESIDENT CLINTON: I should say that the Prime Minister is a good friend of the man who is now the most famous Italian in America, Roberto Benini. And after his performance at the Academy Awards, you have both affection and respect. (Laughter.)

I would just like to try to comment on a couple of things, to maybe make the conversation somewhat more specific and sort of segue into the participation of our other American leaders here.

If you look at this whole Third Way challenge, in America, for the Democratic Party it meant we had to prove we could manage the economy in an intelligent way and then deal with the whole question of social justice. And in our country those questions basically meant three things. One is what to do about the poor and how to have a welfare system that empowered people who could take care of themselves, but also took care of people who could not take care of themselves -- first question.

The second question, how to deal with the fact that we had phenomenal economic growth, but increasing inequality. That inequality had been increasing for quite a long time -- partly because of government policies, partly because the new economy gives such a wage premium to education and skills.

And the third question, to my mind, in many ways the most important, how can this country with all of its phenomenal success and low unemployment -- the lowest unemployment in 30 years -- and now finally rising wages again, how can we strike the right balance, a better balance between work and family -- give families the support they need to raise their children, take care of their parents, have the time they need, have the child care, the health care they need, and still maintain the economic dynamism. What is the right balance?

Now, for Europe, it goes the other way. I wish Prime Minister Jospin were here from France. Very interesting -- France has had economic growth averaging over 3 percent for the last three or four years, but their unemployment rate hasn't gone below 11 percent, I think -- something like that. Any way, still in double digits. And we know from our own experience that when unemployment -- I mean, when growth can be sustained above 2.5 percent in an industrial society, normally the unemployment will go down until it bottoms out at around, at least around 6 percent -- even without going over 3 percent.

So the European question is, how do you get growth manifested in jobs and not give up your social solidarity. In America the question is, how do we keep all this growth -- we love it -- and get a little more stability for families, and make sure we have done what we should for the poorest of our communities and our people; and try to make sure that Americans who do work and carry the load in this country have a chance to have more of the growth in terms of their personal wealth and well-being.

So to some extent we are crossing. Now, I mention that to just give you a couple of specific examples. Gerhard Schroeder mentioned the German job training system. We sort of copied a lot of elements of that and tried to amend it for America in setting up our school-to-work program in 1993, because the Germans do the best job of moving people from -- who do not go on to university for four years -- moving most people into the workplace with modern skills so they can claim a higher wage.

And in our country, we have -- John Sweeney, the head of the American labor movement -- the labor apprenticeship programs -- a lot of the labor training programs do a good job of that, but as a society, we don't do as good a job of that. So we're trying to improve that.

Another interesting example -- how do you deal with the fact that more and more people are working at home, more and more people are working in flexible work environments, you're going to have more and more part-time jobs -- how is that consistent with maintaining a kind of social safety net. I would argue that the Netherlands have done the best job of that. Wim Kok's country has the highest percentage of voluntary part-time workers in all of Europe -- that is they choose to do so. And they've worked out an agreement, which maybe he would like to talk about, so that even the part-time workers earn, on a pro-rata basis, their vacation -- annual vacation, and have retirement and health care and other things -- they have the social protections, and there it makes them more willing when necessary to take part-time work. This is a big deal.

When I became President in America, there were 3 million people making a living primarily out of their own home, for example. When I was reelected, there were 12 million. Now there are 20 million, in only two years. So this economy is going to, if you will, atomize a lot. It's going to get a lot more diverse, and kaleidoscopic. So we'll have a lot of challenges to face in having the proper sense of social safety net.

And then, as I said, the most important thing is getting it right between work and family, since I think we would all admit that the most important job of any society is raising children as well as possible -- something we are even more burdened with in the moment, that conviction.

So I just throw those ideas out. These are things that are going on in other countries, something that we're battling with here constantly. And I wonder if any of you would like to comment on that.

PRIME MINISTER KOK: Well, perhaps I could say a few words about responsible choices one has to make, individually and collectively, in terms of what do we do with our economic growth?

First of all, of course, we have to create economic growth, and be able to keep that speed of growth on a qualitatively acceptable basis, as I said before, because the quality of the environment and ecological aspects are not just somewhere things in the margin, they are part of the heart of the matter.

But I think responsible choices made by workers and by trade unions and responsible leadership in companies and enterprises are necessary elements for good government policies in this respect, because there's quite of a lot of choice for people to be made between what do we do with our prosperity. Do we translate growing prosperity into higher salaries for those who have already the job, the insiders? Or are we prepared to use part of the growing prosperity for extension of the number of jobs.

In my country there has indeed been a remarkable growth of the number of jobs, also part-time jobs, but different from, I suppose, in the past. In Germany these part-time jobs are equal. I mean, there are equal rights for those who have a part-time job compared to those who have a full-time job. In Germany the system was in the past that those who have a part-time job got less social security rights, for example; that makes, of course, quite a difference.

Having said that -- and this is my final remark -- on work and family, I think people should, of course, take their own responsibility in making the choice between two earners in households -- men and women -- man and wife both want to have a job, and they have a choice, of course, how to deal with raising children.

But it's of key importance that we offer opportunities for workers, not only for women, but also for men, to have the possibility to combine working with having enough leisure time for taking care of not only raising children, but also for those who are sick -- and elderly people, for example. And there, the word "flexibility" gets quite a new phenomenon. In the past flexibility, which is a dirty word in the ears of quite some Europeans, or just an instrument for employers, for entrepreneurs who -- just to organize work in a flexible way. But the workers had to wait and see what happened to them.

But flexibility should also be to the benefit of workers, if they have the free choice to organize leisure time and working time in a way where they cannot only earn their money, as a worker, but also be responsible for children and elderly people if they want to take care of them. And there labor agreements, at least in my country, are becoming more flexible. And government policies are based on, for example, fiscal stimulus to those who want to take leave -- people can, for example, make use of special arrangements organized by government policies, to make it possible to combine having young children, working and taking care of the children.

So there a lot can be done in the triangle of clear government policies, responsible trade unions -- but responsibility does not mean that you are just weak and soft -- that can only be the case in the case where also employers and entrepreneurs take their responsibility. Because in a community-sense approach, everybody must be responsible, not only the weakest, but also the strongest, who know that it's in their benefit to work into the direction of a better society.

PRESIDENT CLINTON: Anyone else want to talk?

CHANCELLOR SCHROEDER: Just one aspect, if I may, because I think we might have neglected that aspect of it. I agree fully with what's Wim Kok said and what the American President said as to the need for internal reform. I have just realized how difficult that is. I mean, seen against the background of very specific traditions that my party, that our society has grown used to, there is one aspect that I believe to be very important in this respect.

We've been talking about alternatives. And that is the international aspect of politics, of policies. I am not saying that now with an eye to the United States of America or the countries represented here. But when I look to the countries in the Third World and to the newly industrialized countries that tend to be so much stronger than the poorest countries in the world, here the international development, the internationalization, globalization of the economies of the financial markets create a situation where the political achievements that you have brought about in your own society is being destroyed by these developments.

International, financial speculators can destroy an economy. We've seen that in Asia. And the consequence of what we've seen there was that the international financial institutions that have to come into play -- that is to say, the stronger countries have to make their contribution, which they generally do because it is in their very own interest -- and that economies are being supported by international financial institutions who pay for the liberties of the speculators in the international markets. One of the causes by the crisis, for example, that has set us back in our economic development.

So the internationalization of economies -- and we should not try to counter that trend, nor to stop it or to block it, It's something that develops, information technologies contribute to that -- but this internationalization, this globalization of the economies, should it not be followed and accompanied by an internationalization of our policies, when we look to economic policies, for example.

And I think that it was last, but not least, the American President -- but it was also others who submitted proposals as to how to cope with the activities of these speculators and international financial markets that can destroy the whole economy. As I say, the internationalization of politics is important and we have to begin not with trying to control financial markets, but trying to make them more transparent and trying to coordinate common action on the part of the various governments concerned and affected.

We have to include the private business community in this endeavor. Of course they should have their liberties, the freedom of choice and the freedom to take decisions that they consider right. But we should bear in mind that our efforts can be destroyed overnight, whereas we are not able to respond in an appropriate manner.

And that brings us to a somewhat curious situation, a difficult situation. The people in the countries in which we are in power politically, they expect of us that we take care of these developments and these matters. And we, at the same time, are not able to solve them or to deal with them at the national level. So there is this big gap between the responsibility that we are burdened with by the people -- especially when it comes to international developments -- and the objective means and possibilities that we have to act.

So what we need is to counter that, if we want to remain credible in the policies that we pursue. And that is a very important thing, the importance of it should not be underestimated. We've decided -- "we," the industrialized nations of the world, the G-7, the G-8 -- want to talk about it in Cologne, and to take decisions in that respect. Of course, we will not be able to conclude that ban, but at least we want to make headway here, because I think otherwise we will be in a very difficult credibility situation, we will not be credible to our very own people.

And, now, when we think about the instruments at our disposal in the international and the national arena, then we realize that it is going to be the quality of political leadership; and the quality of political leadership will become dependent on the credibility of governments, dialogue will become a determining factor. And, therefore, politicians will also have to adapt to the changes in time.

The success of politicians will be measured in their success to participate in dialogue, their ability to participate in dialogue.

PRESIDENT CLINTON: Let me just say very briefly, I think when we meet in Germany in the next few weeks with the G-8, I hope we will ratify a number of changes to the global financial system that I believe will be adopted by the international financial institutions and other bodies that will avoid having another financial crisis like the one we saw in Asia that we have all worked so hard to keep from spreading to Latin America and elsewhere.

And it really is a classic Third Way problem, because what happened was, in the last 50 years after World War II when the so-called Bretton Woods instruments were developed, the IMF, the World Bank and others, designed to promote global trade and global investment, with the explosion of technology and the explosion of trade, more and more money had to move around the world.

And then as always happens, there came an independent market in money, unrelated to the trade and investment. So that now every year, every day, there will be about $1.5 trillion in trade per day in goods and services, and the amount of money that moves -- excuse me, $1.5 trillion a day in trade and money, which is roughly 15 times the daily volume of trade in goods and services. And that's the basic problem. So we don't have a framework that has the right incentives to keep that from getting out of hand and collapsing economies, protecting people from their own foolishness, as well as from the foolishness of investors.

But I think we can make some changes and keep the growth going, and get rid of the problems, which is obviously the kind of balance we've been striving for.

PRESIDENT D'ALEMA: I wanted to go back to the very interesting issue which concerns the relationship between employment, work on one hand, family life, spare time and education. I think one of the greatest social issues in our society, and social problems in our society is how to reorganize the relationship between work and family life in a freer way. The relationship between work and time, the time we each use for our own personal life, for our family life, for the people we love, for the things we love to do -- our hobbies -- and the time we use for our education.

In the new -- known for this -- (inaudible) -- social model that characterizes our present societies, these aspects of our lives should be organized according to a relationship which is increasingly free. And we should create opportunities where individuals can, themselves, take the decision how to organize time and the use of time in their lives.

If at one point in their lives they wish to stop -- for example, we have introduced in Italy a piece of legislation -- women or men to take leave from work for a certain amount of time in the form of parental leave to look after their children. And this is an entitlement for both women and men, because up to now in a patriarchal society, such as the one we live in, the problem of the correct relationship between work and family has been a burden only on women's shoulders. Either women are excluded from work or working women are oppressed by the double burden of work and family and caring. And this is not right.

I think this is a problem, too. We can no longer concede social issues as though they had no gender attached to them. Because this is a very selfish way, in our perspective and in the perspective of the gender which is represented on this side of the table, this is a very selfish approach to social issues and no longer an adequate one. I am convinced that we should promote a freer way to organize the use of time. The time for education need not necessarily occupy the first part of a person's life. Indeed, technology innovation requires life-long learning and continuing education and life-long learning and adapting to new knowledge.

And one more comment on this point: in the culture of individuals is today the biggest form of social protection you can ever conceive, at a time of mobility and technology innovation. Ensuring the people are educated and have skills is the biggest form of social protection you can ensure in a society. Whoever is highly educated and has high-skills will spend these assets on the labor market. Those who do not have these assets will be cut off and excluded. Culture is the most important form of social inclusion, and I think we should invest in culture.

And not just technical and vocational skills. Here, the left should fully recover and revalue the value of the human sciences, of the fundamental aspects of culture, because technical knowledge and skills become obsolete -- technology changes. But what really matters is being able to learn, learning how to learn. And this is the basic cultural foundation that will help an individual to be able to quickly learn, to become a learner.

And we have discovered that the educational systems that develop these fundamental skills are more solid and sustainable and lasting than the educational systems that push people too early towards technical and specialized knowledge and learning. I think this is a very big problem here and a rather new one, compared to the old approach to social protection measures.

This is one of the key issues that should be developed if a Third Way culture is to deal with welfare systems and reform.

PRIME MINISTER BLAIR: I'll be really brief, because I can see Al itching to get to the microphone there. There are just two points I want to make, arising out of this discussion.

The first is that all the problems that we have been discussing, I think what is different about this political approach is the idea that these problems can best be addressed and governed through a concept of active community. And I mean that in this particular sense, that our position is that enterprise and justice can live together, and that actually in today's world, they have to. Because economically, we are in an Information Age where there is a premium on knowledge, and therefore you have to invest and develop the potential of all the people to be economically successful. So that is the way that we will succeed in the future.

And, socially, because unless people have some part in society, then this idea of opportunity and responsibility going together just doesn't work. They need the two things happening, otherwise, it doesn't work. This whole notion of community, then, breaks apart. So I think that concept of act of community, based on opportunity/responsibility is absolutely critical to this.

And in the '80s, all the way through the '80s -- I remember this -- when we allowed, certainly in the British Labour Party, the choice to be put by the right you either voted for yourself or you voted for everyone else for a sort of nice society. And we all thought, well, that's a really great program. Then they'd all go into the polling booth and they'd go, I think I'll vote for myself. (Laughter.) And of course, the whole essence of our politics today, this is a foolish choice.

If you live in a community that's broken apart, if you actually don't have a society in which there is opportunity for everyone, we all lose as a result of that. A simple thing to say, but it is actually true today because of the economic social circumstances in which we live. So that's why I think this new political approach is so important, and we've got to give real substance to it in the times ahead.

And the second point I want to make was really about what we're doing here today. And I know it would be nice -- I think on another occasion we would maybe take questions from everyone and have a real discussion and all the rest of it. But it is remarkable that all five of us are here, sitting here discussing these issues. This would not have happened some years ago. And I think it is mightily long overdue, because here we are all engaged, all leaders of governments engaged in this conflict in Kosovo in which we believe and in which we will persevere -- and, you know, it is easier for us to be solid together if, at the same time, we are actually discussing ideas that Europe and the United States of America don't think of themselves in completely different contexts. But we have, actually, some sharing of common experiences and common ideas.

And I think one of the best things that can come out of these types of discussions, and why I think it's good that everyone is here -- because in a sense, I mean, Massimo is right. For us, in a way, it's perhaps easy -- you know, the British, both in respect of America and in respect of Europe. Sometimes it's not all as easy for America in respect to Europe, or for other Europeans in respect to America.

But actually, what we have in common is infinitely more important than what divides us. And we are, in our own ways, in the European Union and the United States of America, we are the key to a modern, free, democratic world, prosperous world. We are the key to that. And the fact that we're here, I think, is good and it's significant. And thank you all for coming along. (Applause.)

MR. FROM: Thank you very much, Mr. President. This was just incredible, I think. But as Prime Minister D'Alema said, for the Third Way to endure, Third Way ideas must improve the everyday lives of ordinary people. And that's why for the second part of this forum we've asked four new Democrat innovators from state and local government in the United States to frame our discussion with brief presentations about ideas that have worked in their jurisdictions.

After they've finished, then I'll turn it back over to you, Mr. President, for a discussion among your colleagues.

First, Lieutenant Governor Kathleen Kennedy Townsend of Maryland has pioneered efforts to bring all resources of local communities together to fight crime and drug abuse. Lieutenant Governor Townsend.

LIEUTENANT GOVERNOR TOWNSEND: Thank you, Al. And I want to congratulate you. (Applause.) Al, I want to congratulate you for the work you've done for more than a decade to bring about the Third Way. And, obviously, I want to thank President Clinton for his leadership for the Democratic Party, that has made us such a strong party. Thank you, Mr. President.

Thank you for that question. Obviously, the issue of crime and violence has very much been on our minds this weekend -- and it's really more than an issue, it's been a human tragedy of enormous dimensions. But what has been hopeful, is American's reaction to that tragedy. I send my comfort and sorrow to the families of Littleton, Colorado. But what Americans understand is that we do not want an ideological answer. They want results. They want to know what can make a difference. How can we, first, make sure that we don't have guns in the hands of children. And let me just describe three things that we're doing in Maryland.

First of all, we believe that kids aren't born bad, violence is a learned behavior, so that we as adults have a responsibility to teach kids right from wrong and personal responsibility, a sense of kindness and generosity and an ability to solve problems without violence, but through talking and learning and understanding. And we're the first state to do a statewide character initiative, and we're having good results.

Two, we want to make sure that we keep guns out of the hands of children, and we're the first state to do a statewide initiative that targets traffickers in guns, to make sure that we use the same energy that we'd use to go after illegal drug dealers, to go after illegal drug -- guns, traffickers.

And, third, we have to child-proof our guns. It is now easier to shoot a gun than it is to open an aspirin bottle. That is outrageous, and we want to make sure that we can have child-proof guns in Maryland next year. But we want to use that same Third Way approach for other issues.

Let me just give you, quickly, two facts. First of all, 50 percent of all crime occurs in three percent of our neighborhoods. Second fact, between 50 and 60 percent of all drug, of all cocaine and heroin use used in the United States is used by people on parole and probation.

Those facts lead to two things. First of all, we have to target our high-risk neighborhoods. We've done that through our Hot Spots program that targets 36 neighborhoods with more government resources -- police, probation officers, prosecutors -- but in partnership with citizens. And just as you have said throughout this panel, it is absolutely imperative that we engage citizens, that we get people to believe that they can work with the police, that they can identify the drug dealers, that they can testify in court, that they can join the community watch groups, that they can volunteer in the after-school programs so that they have a role.

The results are good. Across the United States we reduced crime 2 percent, in Maryland 7 percent; in our Hot Spots, the highest crime communities, we've reduced it 12 percent.

Second, the issue of making sure that we're targeting those people who are most apt to get in trouble through drugs, we've made sure that everybody on parole and probation is tested twice a week for drugs. If they test positive there is a series of graduated sanctions, and there is treatment.

Already we have had results that show up to 80 percent reduction in drug use. The idea is, you don't deal with these issues ideologically. You deal with them practically, what gets results. And what's good about getting results, when you start government, is you encourage a sense of hope and confidence that government can work, that we can solve our problems together and that we can initiate a sense of trust in one another, in ourselves and in what we try to do and accomplish with one another.

Thank you. (Applause.)

MR. FROM: Governor Roy Romer, former Governor Roy Romer of Colorado, has gained a national reputation as an education reformer. Governor Romer?

GOVERNOR ROMER: Mr. President and fellow heads of state, all of you emphasized how crucial education is to that opportunity. The economy is increasingly global, it's changing from an industrial-based to an information-based economy. Therefore, one of the first steps that we're doing in Colorado and many other states in this country is to clearly define what a youngster needs to know and be able to do, setting standards.

Secondly, we're saying clearly how good is good enough. And in that endeavor, we are very much partners with you, because we need to not only arrive at that definition of what you need to know and be able to do, but we need to benchmark it against the world in which we're involved.

But it's just not enough to set standards and have accurate assessments. We need to think clearly in our education reform and we're doing that in many states in this country, as to how we improve the learning experience. And, again, we're partners. To be frank, you do a much better job in 6th, 7th and 8th grade math than we do in this country. You have defined the curriculum better. And we know that you perform better as a result of that. We need to learn together how we can share not just standards and assessments, but how you improve teacher quality, how you improve the organization of time, how you improve the curriculum of the schools, how you involve the parents and the community in that endeavor.

Third, technology is going to blow us away. It is just unbelievable what kind of new learning experiences we are going to have by virtue of technology. And that is a global issue. The employers who are going to hire our children are global in the main way. But the technological aspects are just simply absolutely fascinating.

The final comment I want to make is this: that when we have new ways of learning, particularly beyond high school, which are at a distance, or through a CD-ROM or through interactive computer software, we're going to have to develop a certification of competency, a process of certifying skills so that they can be relied upon by an employer, but also so that any student can say, test me on what it is that I really know, not where I sat in the classroom or what kind of a brand name of the school.

And here is a particularly unique thing for the Third Way -- because if we can establish together truly what it is that person, as an adult, needs to know and be able to do to be a network engineer; and then we open up the free market to say, who can best provide that learning experience, go for it -- that is something that will be absolutely, it will be opening the opportunity of learning and education opportunity worldwide. For example, it's unique -- in Europe, you often have an overcentralized form of administration of education. In our country, we have an overly dispersed system. And as we work together, we have so much to gain by continuing this dialogue.

But just let me conclude, four things. One, we need to set standards and assessments that are really honest, that give people true opportunity. Secondly, we need to have a way to share better ways of enabling that learning experience to occur. Third, we ought to take advantage of the size and the scale of technology. And, fourth, the certification of competency will free the marketplace to provide something that we, as a society, do.

Final comment, as the Prime Minister of Italy has said, technical education is not enough. Culture is tremendously important. I come from a state that is living through the agony of that imbalance.

Thank you. (Applause.)

MR. FROM: Mayor Wellington Webb of Denver presides over a city with an unemployment rate of 3.4 percent, which is virtually unheard-of for a major city in America. He's going to tell us his secret. Mayor Webb?

MAYOR WEBB: I wish I could box it up. Let me say first that it's a pleasure to be here. Our philosophic view of governance for our city is neither left nor right. It's based upon the pragmatism of being able to govern the people that live in our municipality. And it's based principally on six principles.

The first is the foundation for our community and our city. The foundation for that is, one, the fiscal discipline and appropriate stewardship of the dollars that we govern for the constituents in our city. The second part of that is to enhance the basic city services that we provide in a business-like way that the customer is right and changing the attitudes of public employees to a business-like approach.

Based upon that, we have four pillars that we build our city on. The first one is public safety. No city can survive if the people that reside in that city do not feel safe -- they'll move. It's not a gender issue, a class issue, or it's not a race issue. People are going to protect their families. The second one is kids in schools, and we separate that to some degree. Even though mayors that do not have responsibility for public education, we believe that what happens to the children in our cities is directly linked to the educations that those children provide.

In many instances it means that mayors need to involve themselves in investing in public education and fighting for public education and at the same time, work with the kids in their municipalities, which in many cases may mean job opportunities, employment opportunities, career opportunities.

The third part is -- the third pillar -- what do you do to enhance the livability of your city, to make it more competitive against other cities that you compete with for business. We believe it's parks and open space, cultural activities -- whether it's sports teams, symphony, ballet or whether it's dance or whatever those amenities are -- to build upon our ability to enhance the quality of life because we believe people move to cities and they're taking corporations and businesses with them, where all they need is a telephone and a computer in order to operate those businesses out of major cities around the country.

The last point is economic opportunity for all. We believe in order to enhance that and how we do that, that has worked for us, is business and labor and government and neighborhood organizations sit down together and we empower the citizens of our city to help allow them to make the decisions of what's appropriate for bond issues, for future programming in our cities. Then they feel empowered because it's not coming from the top, down. It's the bottom and the top sitting down together jointly, making decisions that will enhance the community as a whole.

We believe that that provides a sense of community. We believe that's one of the reasons that people have moved in our city, mainly because of the quality of life. Our crime rate has dropped 28 percent in the last seven years. Our employment has gone down to 3.4 percent. And our population has grown because we believe, one, people feel safe; number two, they have amenities to enjoy; and, number three, they feel their kids will have a quality education; and, four, they have the ability to live, work and play in the municipality in which they now live. (Applause.)

MR. FROM: Labor Commissioner Mike Thurman of Georgia developed the model system for moving welfare recipients into jobs. And Prime Minister Blair, it's such a model system that New Labour is bringing him over in a couple of weeks to tell you how he did it. Commissioner Thurman?

COMMISSIONER THURMAN: I bring you greetings from the great state of Georgia. And, first, I would like to take this opportunity to thank President Clinton for his leadership in moving us forward, and transforming and reforming America's welfare and public assistance system. Because of the devolution of authority back to states like Georgia, I'm happy to report today that more than 67,000 families in Georgia have moved from welfare to employment. (Applause.)

I'm happy to report that because we now have opportunity, authority to create and design and implement locally driven welfare systems, we've also saved the taxpayers of Georgia over $250 million in the process. Much of this money, under the leadership of former Governor Isaiah Miller and now Governor Barnes, has been reinvested in child care, in drug rehabilitation training, we now have a statewide system of teen pregnancy prevention centers.

And we've also innovated a very new process. We understand that welfare reform is not just about women and children, that males have a major role to play. And through our Fatherhood Initiative, we've taken non-supporting fathers, provided them training, provided them with jobs, taught them the values of responsible parenthood, and 84 percent of those fathers are now working, supporting their children and participating in their lives.

I am very delighted to hear these five great leaders say that they are also concerned, in the midst of a global economy that is growing and expanding, also concerned about the plight of those who are now left behind without skills, and in many ways without hope. Ultimately, the Third Way -- really, our society -- will be judged not by how those at the top profit; but ultimately we will be judged by the quality of life of those who struggled at the bottoms of our society. (Applause.)

As President Clinton has said many times, that you repair a leaking roof not when it's raining, but you must repair it while the sun is shining. This is the perfect opportunity to provide additional skills and additional training, to teach the value and the dignity of work, and to make sure that the millions who are now working poor will have the skills needed to find jobs that will provide sustainable income for themselves and their children. I only encourage you to continue to believe in the Third Way, because the Third Way has proven to be the right way.

Thank you. (Applause.)

MR. FROM: Mr. President, you've just heard four of the great innovators at the state and local level in America. I turn it back to you for the discussion, as you want to take it.

PRESIDENT CLINTON: Well, let me say, first of all, I want to thank all four of them for speaking here today and for the work they do. And they're all friends of mine and was sitting here feeling like, sort of like a proud father or something. I'm so proud of my friendship of many years with Governor Romer; and Mayor Webb, who did so much to help me become President; Kathleen Kennedy Townsend -- we're glad your mother is here -- Ethel, welcome. There is no Lieutenant Governor in America who has had remotely the impact that she has had on the lives of her constituents. It's a stunning thing in many ways.

And I think Mr. Thurman can speak for himself. (Laughter.) But I'm really proud of him, as well. (Applause).

You see -- the reason -- let me just say, one of the reasons that I so much love the DLC and I was so proud of hearing them talk is that for most of us, including those of us at this table, the stories you just heard -- that's why we got in politics. And then when you become the leader of a country and you're arguing about what's in some bill, or what is the debate before the Parliament or the Congress -- if you're not careful, the debate gets very abstract and very frozen and very wooden, and very meaningless to the people that put you in this position in the first place.

And the further you get away from your constituency -- and I think sometimes our friends in the press almost contribute to this in a way, because they have difficulties, too. You know, they have to write a complicated subject, and they've got to get a headline out of it. Or they have to figure out how to take an issue that's going on, and how to put it into 15 seconds on the evening news.

But what you just heard is the ultimate test of whether ideas and our values and our work amount to a hill of beans. It's whether it changes the lives of people in concrete, positive ways. And, so, I just want to thank them and those whom they represent. And I'd like to give my fellow panelists here the chance to make any comments or ask any questions they'd like of those who just spoke.

Tony, do you want to start?

PRIME MINISTER BLAIR: First of all, I thought they were wonderful presentations. Indeed, all I was thinking was I just wanted to know how to go and register and vote for you. (Laughter.) But I guess that's not possible.

But you gave, just in short presentations, exactly what it's all about. And I think there are just two little things I would pick out of it, in a way.

The first is that you all had a faith that we could actually do things together and get results. That's quite important, I think, because that is a big difference -- that is a political point I want to make, too. That is saying history does not pose problems that humanity cannot solve. There are things we can solve and we can do things. That's important.

The second thing which I think is interesting about what the Third Way is about is that a lot of what you are talking about involves the element of a contract or a deal between people, and between government and citizens. In this sense, when you're talking about getting to grips with crime, you're talking about saying, look, we will give you help to get out of the position you're in; but it doesn't come without any responsibility attached to it -- you've got to do things, too. It means that when we're talking about public services -- and this is something we're stressing as a government of my country in education and health -- we're putting a big, new investment into education and our national health service.

But we are demanding fundamental reform and modernization in return. We are -- it's a quite difficult thing we're doing -- in relation to teacher contracts, in relation to public service efficiency, and what we're saying to people is, look, the days when you just thought, well, in comes the Labour government and here's the pot of money and you go away and spend it whatever way you want. We need to say what are the objectives, what are the results we want. We can sit down and work it out in partnership together, but it requires some give on all sides to get this thing done properly, because in the end, it's the results that do matter.

And I think what is interesting in all the four examples, in all the things that you're doing is this sense that that's what community is about in the end. It isn't just about giving a whole lot of money to something; it is about a genuine deal between people, a contract between people where there is mutual respect and benefit on both sides.

And in a way, what we're trying to do is -- and this is to pick up the point that the President was making -- about the press. See, I think the press often -- they can't get a handle on this because they say, well, look, you're either a liberal or you're a hardliner on law and order. You're either a taxer-and-spender, or you're a sort of slasher. You know, everything's got to be --

And, therefore, when people come along and say, well actually, no, that's not really the context in which we're operating anymore, people find it difficult to understand. But that is precisely what we're about. And I think -- you know, the interesting thing about the four presentations was that they -- quite apart from, it seemed to me, a fantastic policy agenda -- and, Mr. Thurman, you're not going to be the only one that's coming over to Britain to tell us all about it -- you know, quite apart from the fact there is an exciting policy agenda there, I think there is also a very clear demonstration of the link between what we're talking about in a general sense, and the practical, specific measures that can make a difference to people's lives. And I think that's a really exciting thing.

And in different ways, all these governments -- not running through all the policy agendas of all of us -- we are trying to do the same type of thing, in the face of the same problems. You know? And even us -- you know, everyone talks about the European education system, and we've got great examples of it along this table, in the national governments -- we've still got to do a lot more to reform our system, make it even better. You know, there's big change that's necessary all the way through.

So, anyway, I thought it was a fantastic presentation. And I think it's exactly the right balance between, if you like, the values, but also the serious practical measures that you're taking. And if this is what the Democratic Leadership Council has brought about, well, you can be pretty proud of yourselves, too. (Applause.)

PRESIDENT CLINTON: Anybody else want to talk?

PRIME MINISTER KOK: Well, perhaps a few words. The presentations we just got make clear what you can realize when you work with people, for people. And this is also true for the field of crime, because there is a lot of similarity between what we heard and what we experience at home, also in my country. And it's very important to strike a balance between prevention on one hand, providing better social conditions, better housing, job opportunities, get people out of the misery of not being able to participate; but at the same time, of course, also repression -- let people know that what is not allowed is not going to be tolerated, because if we are going to be too soft, we will never have a result.

And then, I think, what you heard is that we are not dealing with the problems in ideological terms, but in practical terms -- work for practical results. In the field of technology, all oriented on participation. And I was struck by what was said earlier this afternoon, a dialogue -- that's, indeed, a necessity for politicians, to have the dialogue with the citizens, the dialogue with the electorate; but also create a framework of consensus.

I mean, we in the Netherlands, we are a little bit known about our so-called Polder Model. And of course we should not exaggerate that. That means that we have a kind of consensus society where we try at the community level, also at the national level -- we are not that large, so we can do it easily -- try to at least to convince each other and take common responsibility, take a community approach, even at the national level.

And my final point is that for some goals and targets you want to realize, the level of the federal states, or the level of the central government is far too high. And the presentations we got illustrate how much practical results, how many (inaudible) you can get at the local level. And sometimes even lower than the local level. But for other purposes, the national government, even the national government of a big, almost a continent like the United States, is not powerful enough. And there we have to shoulder together in order to tackle a number of common problems we have all over the world, and that brings us together also around this table, between the U.S. and Europe.

Thank you very much.

PRESIDENT CLINTON: I just want to comment on one thing, because a lot of you talked about at what level something should be done. We're having a hugh Third Way debate here in this country that has many different manifestations related to how the federal government should give money to local governments in various areas. And it's very interesting. By and large, the Republicans will say -- and they really believe this -- that since we can't run law enforcement, for example, we should just set aside how much money we want to give and give it to local government and say, go enforce the law -- they'll lower crime. And the old motto would have been we would have passed a law which would have had 15 different programs, each with a different subcommittee chairman's name on it and said, go spend the money in this way.

Now, what I'm trying to do is to say, okay, we shouldn't tell you how to do things, but you have told us what works. Therefore, we should stop giving money for things that don't work and start giving money for things that do. So we say, if community police works, that's what we should do. If Kathleen's program works on testing parolees -- which, by the way, I'm trying to get enough money out of Congress to do that nationwide, just what she said, she's proved it's worked, right? So we don't tell them whether they should contract with people to do the drug testing or what they should do or exactly how they should do it. But I think we should say, look, in Maryland, this works, therefore, we'll give you the money if you do this. But we're not going to just give you the money, and you decide whether you want to waste it or not.

And that's the debate we're having. You know, because we're not trying to micromanage local government; but we are trying to take things that work and say, okay, if they work in Denver, or if they work in Georgia, if they work someplace else, we need to stop funding things that don't work, start funding things that do -- but we're not going to tell you how to do it, you figure out how -- but this is a thing that works, and so do it.

And it's a big debate. And I urge you all to watch it this year. It'll play itself out in three or four different areas. And we may not win them all. But I think it's a very important debate to have, because it will be about the nature of the federal responsibility in a lot of areas in the years ahead.

Would anyone else like to talk before we adjourn? Gerhard, do you want to say anything else? Massimo?

CHANCELLOR SCHROEDER: Perhaps just briefly to comment on the four contributions. We've seen four examples, examples for the principle of subsidiarity. We listened to the Mayor, to the representative of the Governor, who explained at what level things can be decided, what can be decided at the local level. And he said that what can be decided at that level ought to be decided at that level. Because we take it that it is easier to find out what people find beneficial and what not if you stay close to the people and listen to them. That is what we understand by the principle of subsidiarity and we've had, we've listened to very good examples in that respect.

Of course, politicians can set a framework. The national government can set a framework. But if the citizens then don't have the right to film that framework in a responsible manner, to commit themselves -- and that is what we mean when we speak about community, not only to be interested in your very own person, in your very own interest, but to work for the community and its interest. And if we don't do that then all our political initiatives will be useless; because there has to be a kind of (inaudible) network of relations between the framework setting politicians at the federal or national level and those factors at the local level in the sense of community and community spirit.

And I think we've listened to very good examples, excellent examples of both of the points that I made. And those who act as citizens in that sense of the word can only be recommended, I believe.

PRESIDENT D'ALEMA: -- is that the answers that we are providing are very similar. The answers we're thinking about are very similar. We have similar experiences, too, that are moving along the same lines in cultural terms.

Let me just make an example. We have introduced reform in the educational system in Italy based on the principle of the autonomy of school institutions; namely, you have national curricula -- this is our public education system. But the management of the individual school is no longer something for the national government and the national public administration to deal with, put it in the hands of the community represented by teachers, students, pupils and their families.

What is the basic idea behind this? The idea is that whatever is government-owned is considered belonging to nobody. In Latin we say "Res nullo est"-- it doesn't belong to anyone. But we want to get people used to think that whatever belongs to the state is theirs. We have to put it in their own hands for them to feel it belongs to them. You have to give them responsibilities. And I'm sure our schools will operate better and there will be a certain degree of competition among schools -- the desire to make my school work better than that of the other neighborhood next door -- and this will improve the quality of the system, we hope.

Of course, we could tell a lot of stories here and we could tell about a lot of different experiences --there's no time for that. Why don't we promote direct communication at this level, among these experiences at the community level; so we four here belong to a movement. We meet occasionally, don't we, among ourselves, in other fora. And this movement is a movement that, for example, has promoted a very beautiful conference of mayors, mayors belonging to the socialist international from all over the world. We hosted it in Italy -- of local authorities. And we had a beautiful discussion among local authorities from mayors from Latin American, from Europe, from many continents. Now, I wonder, shouldn't we create a form of communication with these extraordinary experiences you are telling us about, find direct form of communications between the experience we four belong to, the movement we four belong to, and your great experience.

There's a big problem here that would have to be discussed elsewhere. It concerns the words we use. There are words that in your civilization and your history sound difficult to understand or to accept. For example, we belong to the socialist international, and I'm aware that this word is somewhat sensitive here. And I can see that we have avoided pronouncing this word here. But we should prevail over this fear of words, because when we move from the words to the actual facts and the actual experiences, we discover that these experiences are much closer and more similar than they expected to be, and we should find a form of communication among these experiences that would make us all richer. That's all I have to say. (Applause.)

PRESIDENT CLINTON: Thank you. Yes, I'm not sure I would even have you here, Massimo, if I were running for reelection. (Laughter.)

No, no. I'll tell you a serious story. Hillary and I went to Italy over a decade ago, and we were in northern Italy, and I met these Italian Communists who were anti-Soviet Union, pro-NATO, and pro-free enterprise. And I thought to myself, I've got to be very careful about what words mean, anymore. It was amazing. (Laughter.)

Let me introduce three more people who came here, and are just as tired as our panelists are, and they sat through this whole thing. I'd like to thank Cherie Blair, Rita Kok, and Doris Schroeder Kopf for being here. Thank you all three for coming, and being a part of this. (Applause.)

And let me say, I'm sure you all know that this was a very difficult, but profoundly important, three-day meeting we had of NATO. And all these leaders, I think, must be quite exhausted. We have worked very hard and tried to do the right thing on every front. But they cared enough about these ideas and the worldwide movement to try to achieve what we have worked on and believe in, in common, that they came here to be with us. And I think we owe them all a very great debt of gratitude and we thank them. (Applause).

MR. FROM: Thank you all. Thank you, President Clinton, Prime Minister Blair, Prime Minister D'Alema, Prime Minister Kok, Chancellor Schroeder for this unbelievably -- just unbelievable session. Our guarantee to you is that we're not going to let the momentum you created tonight die.

I'm pleased to be able to report that the DLC's affiliated think tank, the Progressive Policy Institute, and the Smith Institute of London will launch a series of Third Way conversations to be held over the next year in the U.S. and in Europe.

This is a joint venture that will aim at getting a lot of the intellectual firepower involved in this conversation. And we're undertaking it because, as Prime Minister Blair told us at the first meeting at Chequers, we cannot be satisfied by winning political power, alone; we also need to win the battle of ideas. In the Information Age, more than ever, ideas will drive our politics. Ideas move nations. Men and women armed with good ideas can change the course of history. And I believe we've made a bit of history tonight.

Thank you all very much. (Applause.)

END 7:24 P.M. EDT