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EC Leaders Adopt Modest Job Stimulus Measures

By Joel Havemann
Los Angeles Times


European Community leaders Tuesday adopted a modest package of measures to stem Europe's rising tide of unemployment but fell short of reconciling differences that have blocked completion of an international treaty to liberalize world trade.

Two issues -- Europe's sagging economies and Bosnia-Herzegovina's civil war -- dominated the two-day summit that ended Tuesday. The EC leaders agreed to send more troops to protect Muslims in six so-called safe areas of Bosnia, but they rebuffed German Chancellor Helmut Kohl's 11th-hour appeal to lift the international arms embargo that has hampered the Muslims' attempts to defend themselves from the country's ethnic Serbs and Croats.

On other issues, the leaders of the 12 EC nations also:

* Agreed to drop some of their barriers to imports from six Eastern European nations -- Poland, the Czech Republic, Slovakia, Hungary, Romania and Bulgaria -- and reassured the six that they were in line to become full EC members sometime in the indefinite future.

* Urged the quick conclusion of a partnership and cooperation agreement with Russia.

* Declared that four Western European nations now negotiating their entry into the EC (Norway, Sweden, Finland and Austria) should be ready to join as of Jan. 1, 1995.

The adoption of a package of economic stimulus measures papered over a dispute among Britain and many of the EC's other members over the causes of an EC unemployment rate that is 11 percent and rising.

British Prime Minister John Major laid much of the blame on the EC countries' generous pension and family benefits, unemployment compensation and other social programs. To finance these programs, employer-paid taxes in many EC countries are so high that they discourage companies from adding new employees, Major said.

But the EC summit's final statement made no mention of the issue, and some heads of government, including Irish Prime Minister Albert Reynolds, said there was no question of cutting social benefits to create jobs.

Nor did the leaders directly take on the issue of high German interest rates, which are widely blamed for depressing economic growth not only in Germany but throughout Western Europe.

The EC leaders pledged expanded public works investment sponsored not only by the 12 EC nations but by the Community itself. They called on the EC's European Investment Bank to increase by $3.5 billion its special $5.8 billion lending facility for telecommunications and transportation projects and small- and medium-sized businesses.

In their concluding statement, the leaders issued a familiar call for a speedy conclusion to the international trade negotiations that have been deadlocked since 1990.

That statement could not hide France's continuing opposition to an agreement between U.S. and EC negotiators last November on agricultural trade, one of the key issues in the international trade talks. French Prime Minister Edouard Balladur said he was pleased that, after the EC summit, the U.S.-EC accord was "not already engraved in marble."

The trade negotiations will be on the agenda of next month's meeting in Tokyo of leaders of the world's seven major industrial nations.

The EC leaders also said that Eastern European nations could join the Community only after democracy and market economies had firmly taken root.

For Russia, which is still negotiating a partnership and cooperation agreement with the Community, the EC leaders proposed regular six-month meetings between Russia and the EC. Such meetings are now held between the EC and the United States.