Discord casts a cloud over the outcome of autumn jobs summit

Date: 11/09/1997

By Simon Coss

CONCERN is growing that this autumn's much-trumpeted EU jobs summit will turn out to be exactly the sort of inconclusive talking shop that Luxembourg Prime Minister Jean-Claude Juncker so desperately wants to avoid.

Juncker, who will chair the November meeting, last week warned that Europe's political leaders must agree on concrete measures to tackle unemployment at the summit or the Union would suffer another blow to its already tarnished public image.

But seemingly unbridgeable gulfs are emerging between the Union's three largest member states - France, Germany and the UK - over how best to proceed.

At the beginning of July, Juncker wrote to his European counterparts asking them to submit ideas for EU-level job creation strategies. According to national officials, the replies do not make for very encouraging reading.

“The French and the British seem to have almost directly opposing views, while the Germans are basically refusing to do anything as they feel this is a national issue,” said one.

In the UK, Tony Blair's 'New Labour' government is essentially arguing that the best way to promote employment is by encouraging flexible labour markets unhindered by overly burdensome legislation.

“Our approach at the summit will reflect ideas put forward over the summer by [UK Finance Minister] Gordon Brown. We will stress themes such as employability and competitiveness,” explained a London official.

French Socialist Prime Minister Lionel Jospin favours a more traditionally Keynsian solution, in particular opposing any suggestion of excessive wage restrictions. Some supporters of the Jospin approach say France's Loi Robien could provide a model for tackling Europe's unemployment. This enables employers to pay reduced social security contributions if they cut existing employees' working time and use the hours saved to create new jobs. Any such scheme must be agreed by the workforce and management.

But while France and the UK seem worlds apart on ways to tackle Europe's unemployment problems, they do at least agree that there is room for some sort of common EU approach.

Not so Germany, where figures unveiled this week showed a record 4.6 million people out of work. Bonn's argument that tackling unemployment is essentially a national problem, coupled with its insistence that there must be no new money for EU job creation schemes, will seriously limit the scope for concrete Union action.

Some funding is likely to be made available through loans from the European Investment Bank (EIB) and unspent finance from the existing EU budget.

But national officials warn that these will be comparatively small amounts which will have to be spread thinly across the Union's 15 member states.

Undeterred by the gloomy prognosis, the European Commission is busy drafting its plans for the summit, which it hopes to present to political leaders in the form of a set of employment guidelines. These are expected to include specific job-creation targets which governments should try to meet.

The institution will be looking into a whole range of issues such as shifting the burden of taxation away from personal income, supporting training schemes to ensure people's skills match the jobs on offer and encouraging the growth of small and medium-sized enterprises.

Commision President Jacques Santer this week criticised EU governments for failing to take concrete action. “The man in the street does not understand why this great global commercial power has failed to master unemployment,” he said.

But the Commission can only put forward proposals. It is national governments which must agree to any changes in the EU's economic policies which are required to put such plans into practice and, as one expert put it this week: “There does not seem to be a lot of common ground on the macroeconomic front.”