EU defers strategic reforms to avert French poll flop

24th March 2005, Comments 0 comments

BRUSSELS, March 24 (AFP) - By effectively putting key economic reforms on ice at a two-day summit here, the European Union is hoping it can rescue the EU constitution from a fatal defeat at the hands of angry French voters.

BRUSSELS, March 24 (AFP) - By effectively putting key economic reforms on ice at a two-day summit here, the European Union is hoping it can rescue the EU constitution from a fatal defeat at the hands of angry French voters.

But it remains to be seen whether the gamble will pay off, EU experts told AFP as the EU's two-day spring economic summit drew to a close in Brussels on Wednesday.

"It's a long, long haul between now and the vote" on May 29, said Richard Whitman, head of the European programme at the Chatham House foreign policy institute in London.

"I think the 'no' side (in the French referendum campaign) has been very effective in getting its punches in first. We haven't yet seen a well-organised 'yes' campaign kick in."

With opinion polls showing a majority of decided French voters ready to reject the constitution, French President Jacques Chirac came to Brussels dead set against proposals to liberalise Europe's vast services sector.

In doing so the 72-year-old conservative styled himself as the unlikely champion of the French working class, going so far as describing neo-liberalism as "the new communism".

His fellow EU leaders obliged by agreeing to review the European Commission's services directive - a move that pulls it out of the political spotlight until the referendum is out of the way.

Aurore Wanlin of the Centre for European Reform policy institute in London said Chirac now can go back home and tell French voters that he has stuck up for their interests in Brussels.

But she added: "That won't be enough (to swing French public opinion). The government (in Paris) will have to become more proactive in promoting the constitution."

Officially, the Brussels summit - the second of four this year - was focused on the Lisbon Strategy, a to-do list of reforms for making the EU the world's top knowledge-based economy by 2010.

That bold vision, a product of the dot-com boom, has slipped by the wayside, however, with growth and job creation lagging behind the United States and many Asian economies.

"Five years after the launch of the Lisbon Strategy, the results are mixed," read the opening words of the summit's conclusions.

"Alongside undeniable progress, there are shortcomings and obvious delays ... It is essential to relaunch the Lisbon Strategy without delay and re-focus priorities on growth and unemployment."

Many Europeans fear, however, that freer markets will lead to "social dumping," with workers in richer countries losing their jobs to low-cost, ex-communist EU member states.

"We need open markets in the services sector," conceded German Chancellor Gerhard Schroeder at the end of the summit.

But he added: "They must be built in such a way that does not produce salary dumping, or social dumping, so that order can be maintained in the jobs market."

Chirac warned Wednesday that France's standing in Europe could suffer if French voters reject the constitution.

"It's clear that if France blocks the construction of Europe today, the consequences will not be negligible and (France) will lose a large part of the authority it needs in the Europe of tomorrow," he told reporters.

Meanwhile, EU plans to lift a 15-year-old arms embargo on China - despite US opposition - fuelled debate on the sidelines of the summit, although the issue was not on the formal agenda.

EU foreign policy chief Javier Solana said the ban, slapped on Beijing after the Tiananmen Square massacre in 1989, was "unfair" given the changes in China over the last decade and a half. The EU has been aiming to end the embargo by June, but China's adoption of an anti-secession law authorizing the use of force against Taiwan has complicated the matter.

Solana said Wednesday it was "too early" to say when the ban will be lifted.

© AFP

Subject: French News

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