Delors maps out new strategy for EU economy

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JACQUES DELORS is in the final stages of completing a 100-page document setting out a new path for the European Union economy.

Officials in Brussels say that the Commission President's initiative may result in another ecu7bn worth of lending by the European Investment Bank, the EU's financial arm. That would take EU spending on transport, energy, and infrastructure to over ecu80bn a year by the end of the century.

The White Paper on Growth, Competitiveness and Employment is due to be finalised by the European summit on December 10-11 in Brussels. It was launched by Mr Delors in June at the Copenhagen summit, as a way of re-energising the EU after its political and economic reverses. Though it has been substantially watered down along the way, it is still likely to lead to an increase in the Commission's economic role, officials said at the weekend.

The EIB, which lends more every year than the World Bank, may see an increase in the lending facility agreed at last year's Edinburgh summit, according to officials. The Edinburgh facility, of ecu5bn, was increased to ecu8bn in June and may now rise to ecu15bn.

Proposals for a jumbo ecu100bn EU bond, floated by President Mitterrand earlier this year, seem to have attracted little attention. Equally, officials in Brussels now think it unlikely that the Delors plan will involve substantial new spending by the EU, since this would break previously agreed budget guidelines.

Last week, Helmut Kohl and John Major both made clear their resistance to further spending. 'This is not the time for the Community to engage in fresh and substantial expenditure plans,' the British Prime Minister said. Since the two countries are the main net contributors to the EU budget, their statements have added weight.

But officials pointed out that taking into account other EU spending - on research and technology, transport, energy and telecommunications links to network the 12 member states together, and new cohesion funds for the poorer members - the total of EU cash available for infrastructure will top ecu80bn a year by the end of the decade.

New lending on this scale would once again raise the profile of the EIB, which is headed by Sir Brian Unwin, a former British civil servant. It would mean that the institution would probably have to move sooner rather than later next year to increase its capital, which puts a ceiling on lending of ecu144bn.