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EU: Bloc Tempers Economic Ambition, Displays Widening Differences Over Goals

The two-day European Union summit that ended in Brussels today predictably agreed to scale back the bloc's ambitious "Lisbon strategy" for economic renewal. The decision reflects poor growth and job-creation records, which have made catching the United States a patently unrealistic goal in the foreseeable future. Meanwhile, differences emerged on how to reconcile the seemingly conflicting objectives of restructuring industries and opening markets with the wish of many old member states to protect their living standards. Separately, EU leaders set up a new task force for Croatia to assist that country on its path to entry talks.

Brussels, 22 March 2005 (RFE/RL) -- Gone are the days when the EU's economic ambition was defined by comparisons with the United States.

The goal to overtake the United States by 2010 as the world's most dynamic economy has now been dropped in favor of more mundane concerns.

At the close of the EU's tradionally economy-dominated spring summit in Brussels, Luxembourg's Prime Minister Jean-Claude Juncker appeared to dismiss abstractions such as growth, competitiveness, and productivity.

Juncker, the head of the current EU presidency, said that what really matters is what "comes from the hearts" of European citizens and affects their daily lives.

"What the Europeans really want is to work," he said. "They want to be able to work in good business conditions; they must have the funds to be able to create businesses; they want to take advantage of open markets; they want to be able to make use of communication and transport networks that deliver; they want to be better counseled on how to share responsibilities among partners in professional and family life; they want to remain in step with new technologies, with 'Planet Internet.' They want to be able to provide their children with good education."

These, Juncker went on to say, are the "real objectives" of the Lisbon strategy.

The scaled-back strategy now also makes member states directly responsible for planning and conducting their own reforms. This clarifies responsibility, but it has raised fears that pan-EU coordination of reforms might suffer.
In a separate move, responding to pressure from Austria and a few other member states, the summit decided to set up a special body to facilitate the launch of EU entry talks with Croatia.

The decrease in global ambition has been accompanied by an increase of bickering among member states over conflicting national interests.

Differences were thrown into sharp focus at the summit in exchanges over the fate of the so-called "services directive" -- a legislative measure proposed by the European Commission to open member states' services markets to Europewide competition.

France, Germany, Belgium, and Luxembourg -- among others -- have objected. They fear what they call "social dumping" from new member states. The concern is that companies from countries with lower wage levels, meager social provisions, and lax labor laws, if allowed to operate in richer countries on their own terms, would drive down living standards in the older member states.

In France, the issue has become linked to the fate of the new EU constitution, which will be put to a referendum in late May. France has demanded the European Commission withdraw the directive.

Today, EU leaders agreed to extend consultations on the directive, meaning it will not come into force before the French referendum.

Jose Manuel Barroso, the president of the European Commission, said the delay does not mean services markets will not be liberalized.

"We are ready to consider some modifications in the services directive within the legislative process," he said. "We would lose the momentum if we started a new process. That would be the way to lose the momentum if, for instance, there was the idea of a new directive, or as I heard some people say -- not in the Council -- I've heard some people say, to withdraw the directive. I want to tell you that nobody around the Council [table] proposed to withdraw the directive."

Barroso reiterated earlier promises that French concerns would be addressed. This has raised fears among new member states that the directive could be watered down, and substantial parts of the services sector excluded from open competition.

In a separate move, responding to pressure from Austria and a few other member states, the summit decided to set up a special body to facilitate the launch of EU entry talks with Croatia.

The talks were initially to begin on 17 March, but were postponed after the EU decided Croatia had not done enough to apprehend fugitive war crimes suspect General Ante Gotovina.

Juncker today said the new EU "task force" will look into ways of "helping" Croatia to fully cooperate with the International Criminal Tribunal for the former Yugoslavia (ICTY).

"We have put in place a 'task force,' which consists of the Commission, the [EU's] high representative [for foreign policy, Javier Solana], the Luxembourg [EU] presidency, the future [EU] presidency of Britain, and the presidency that will follow Britain -- that is, Austria -- to consult with both the Croatian authorities and The Hague tribunal."

The "task force" has no set objectives nor a timetable. It is expected to report to EU foreign ministers either next month or in May. The composition of the "task force" has been tailored to give representation to both Croatia's supporters -- led by Austria -- and critics, among whom Britain figures prominently.

Diplomats have told RFE/RL that the creation of the "task force" represents a small victory for those member states who believe arresting Gotovina is not the only way Zagreb can prove compliance with the war crimes tribunal. Proving that Gotovina is not in the country or otherwise showing that Croatia does cooperate with the tribunal might also be options.

One EU source told RFE/RL that the EU is trying to "get beyond Carla del Ponte," the tribunal's chief prosecutor, who is highly critical of the record of the Croatian authorities. The official said del Ponte has a judicial role as a prosecutor, whereas the EU must make a political decision that takes account of "other elements," too.