Community law has seen some of the fiercest battles over ‘new’ social democracy and ‘Third Way’ politics. To simplify somewhat, the core idea of the Third Way is to rely on the market to provide services to the public efficiently, without however disconnecting them from certain key social values. In the Community legal order, these social policy devices invite the application of the Community’s economic jurisdiction, where public services can be classified as ‘market’ services. They frequently lead to what Joerges has labelled ‘diagonal’ conflicts between the Community’s economic law and its competence to uphold the EU Internal Market, and the Member States’ individual choice, and competence, to administer their welfare states. In ‘diagonal’ conflict situations, a single set of facts is analysed via two different ‘logics’, one following the economic perspective of the Internal Market, and the other marking the Member State’s political and social competence, where states are regularly guided by a more diffuse set of values, including public and constitutional rights, and practical political pressures. Whilst states may well invite the market into their welfare state, for example as part of a political ‘third way’ solution, the national electorate, who will ultimately hold public authorities accountable, are likely to concentrate their judgement on the realisation of substantive public service targets rather than how they have been achieved.