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EU: Economic Growth Key Concern For Summit

  • Ahto Lobjakas

The European Union's two-day autumn summit, which begins today in Brussels, will stray deep into territory normally reserved for the bloc's spring gatherings -- the economy. While nearly everyone agrees the EU needs to spur economic growth, there is little agreement on how that should be achieved. There also is little accord on the other major item on the summit agenda -- the EU's future constitution. The president of the European Commission, Romano Prodi, says EU leaders must avoid descending into the kind of petty institutional wrangling that overshadowed the Nice Treaty.

Brussels, 16 October 2003 (RFE/RL) -- With the European Union economy set to expand a mere 0.5 percent this year, with no relief in sight, spurring growth is high on the bloc's agenda.

Nevertheless, it is traditionally the EU's spring summit that grapples with the so-called Lisbon agenda. The Lisbon agenda was approved in 2000 at a summit in the Portuguese capital and is intended to help the bloc overtake the United States as the world's most dynamic economy by 2010.

But the lack of economic dynamism has ceased to be a long-term concern and is becoming a life-and-death issue for a growing number of EU governments.

There is no shortage of schemes to boost the EU economy. What is in short supply, however, is agreement among the major actors -- the European Commission and member-state governments.

Yesterday, European Commission President Romano Prodi insisted that the summit approve his plan, which singles out traditional infrastructure. "The European Council meeting that opens [today] should provide further guidance on some major issues that are at the top of the EU's agenda today. First of all, I expect the heads of state and government to agree on certain key measures to help revive the union's economy. My major concern here is to ensure that the union's leaders endorse the growth initiative which I launched at the beginning of this year," Prodi said.

Prodi argued that a few dozen "trans-European networks" should be picked before the end of the year, for which about 220 billion euros ($257 billion) should be made available in the next 20 years. He spoke at length yesterday of missing road links and the even sorrier state of essential rail links, the construction of which has in many cases not even started.

Prodi's plan appears to mesh nicely with a scheme presented by the EU's current Italian presidency, which envisages the injection of more than 50 billion euros, mostly in loans, into transport and energy networks.

However, France, Germany, and Britain have indicated they favor investments in high technology, to help close the technology gap with the United States. France and Germany both are currently in breach of the Stability and Growth Pact underpinning the euro, and further loans would only serve to worsen their already burgeoning budget deficits.

The prime ministers of six Nordic and Baltic countries sent both Prodi and Italian Prime Minister Silvio Berlusconi a letter warning that the EU must focus on areas that foster long-term growth, such as research and development, and retraining. They also stressed the importance of reform of Europe's labor and capital markets, as they have already been spelled out in the Lisbon agenda. The long-term sustainability of public finances -- in other words, the need to keep public spending in check -- was also raised as a key concern.

The other main issue on the agenda of the summit is the ongoing Intergovernmental Conference, in the course of which current and new EU member states will hammer out the details of the bloc's new constitution.

Here, Prodi warned yesterday, member states must do everything to avoid a repetition of the Nice summit in 2000, where long and protracted wrangling led to a generally disappointing deal. "It is important for Europe not to become bogged down in an institutional power struggle in the weeks to come, because these, after all, are not the main issues that will mobilize our citizens, as these are not the main issues to inspire our citizens," he said. "And we have to start looking ahead already now to the upcoming referenda [on the constitution in a number of member states]."

Prodi yesterday threw in his lot with the Italian presidency and countries like France and Germany, who want to see negotiations end in December.

However, he was not alone in acknowledging that the final stretch in negotiations is likely to be extremely complicated. There are a number of hotly contested issues. The most fundamental -- although perhaps not the most difficult -- is the future size of the European Commission and whether each member state will at all stages be entitled to a fully fledged commissioner.

Potentially more divisive is the Spanish and Polish demand to keep the Nice arrangements for how the voting weights of the member states are determined. As the draft constitution stands now, both countries would lose in their relative standing.

The third major issue on the summit agenda is the future status and role of a possible EU foreign minister.

Finally, Prodi said, the European Commission expects a "green light" from the summit for the creation of a Brussels-based EU agency for the joint management of border controls. He said the agency would coordinate common risk analysis, harmonize equipment and surveillance, and also manage the joint training of border guards.

Prodi also emphasized the need to address the need for legal immigration, noting that it is a factor that -- if properly managed -- would contribute "decisively" to economic growth in the EU.

EU leaders will also briefly discuss a number of topical global problems, among them Iraq, Iran, and the Middle East, although no decisions are expected.

The decision by German Chancellor Gerhard Schroeder to ask French President Jacques Chirac to stand in for him tomorrow is causing some controversy. Although no one questions Schroeder's need to return to Germany for a crucial parliamentary vote, some observers are voicing fears that the move could signify a return to "pre-cooked" private deals outside of EU structures.

However, Prodi yesterday said he considers the maneuver perfectly "innocent" and hopefully a step toward overcoming "narrow nationalism."