The Globe and Mail Tuesday, June 17, 1997
Compromise ends bickering between France, Germany
Unemployment problem gains recognition at EU summit
By Madelaine Drohan
European Bureau
France declared victory yesterday in its battle with Germany over joblessness,
securing a promise that European Union leaders would pay more attention to
the problem, starting with a special jobs summit later this year.
The promise ended the public bickering between Lionel Jospin, the new
Socialist Prime Minister of France, and German Chancellor Helmut Kohl over
whether European funds should be used to finance large public-works projects.
Their public fight had threatened to derail the summit of European leaders that
began yesterday.
"This is a great success for France," said Manuel Valls, spokesman for Mr.
Jospin. "It's a good compromise. It's a good deal."
Dutch Prime Minister Wim Kok, whose country holds the six-month rotating
presidency of the 15-member union, helped restore harmony with a package of
measures including the jobs summit, a pledge by the European Investment
Bank to investigate ways of funding small businesses, and the joint promise by
the leaders written into a treaty that they will make employment a priority.
Mr. Jospin was satisfied that France had moved employment high on the EU
agenda. And Mr. Kohl went along because no new money would be spent. The
European Investment Bank is funded by EU countries but only makes loans on
a commercial basis to projects and companies that are commercially viable.
"There are only winners in this game. There are no losers," declared Jacques
Santer, who as president of the European Commission is the EU's top
bureaucrat. "We're extremely relieved and very happy that we've managed to
get this action."
Mr. Santer was happy because the compromise saved the Amsterdam summit
from failure and kept the drive for a single currency on track. If France had
stuck to its guns about using public funds to create jobs, it could have delayed
the Jan. 1, 1999, launch date for the currency. Yesterday's compromise also
meant the leaders could turn today to what was supposed to be the real meat of
the meeting: streamlining how Europe operates and preparing the group to
accept new members in the 21st century.
Mr. Jospin's demands on jobs had shaken the other European leaders, who did
not know what to expect from the Prime Minister whose left-wing coalition
took office only two weeks ago. His opening position was that Europe should
revive plans shelved three years ago for massive, publicly funded projects such
as high-speed train lines criss-crossing Europe.
Just how effective any job-creation measures will be in reducing the number of
unemployed in Europe from the current level of 18 million remains in doubt.
European leaders have held so-called jobs summits before, and they have done
little to fix the problem.
A spokesman for British Prime Minister Tony Blair was dismissive of the
employment package, saying there were differences between Britain and
France on how to go about tackling unemployment. Britain, whose
unemployment rate is among the lowest in the EU, sides with Germany and
against France on the question of spending public money to create jobs.
When asked how many jobs might be produced by yesterday's action, the
British spokesman replied: "Eight." He added that job creation is a matter of
national policy, not European policy.
But France's attempts to reform its generous social-security system and make
the kind of spending cuts necessary to give its economy a boost have met with
widespread labour unrest. Truckers, fishermen, doctors and students have
taken their turn marching through the streets of Paris to protest against even
the most minor changes.
The former right-wing government lost the June 1 election because its
popularity had been so badly dented by strikes and protests.
Mr. Jospin was elected on a platform of promising to create 700,000 jobs, half
of them in the public sector, and reducing the working week to 35 hours from
39. No other country in Europe has recently adopted such methods.
The kind of changes that a country such as Britain has made, cutting public
spending, allowing freer rein to market forces and removing layers of
regulation, have been dismissed by French Socialists, who say they want to
have nothing to do with what they call the Anglo-Saxon model.
