EC agrees growth and jobs package

AN ECONOMIC growth package designed to stimulate investment and create nearly half a million jobs across Europe in the next 18 months was finally agreed by European Community finance ministers yesterday.

The success of the scheme, first mooted at the Edinburgh summit in December last year, will depend on efforts by individual countries to curb inflation and reduce debt, they admitted. To have real bite, it will have to reduce European interest rates and work as part of an international growth strategy with the United States and Japan. With EC and US officials meeting in Washington to try to defuse a potential trade war, the ministers went out of their way to stress commitment to strengthening transatlantic economic co-operation.

Norman Lamont, Chancellor of the Exchequer, while heralding the package, said it was 'overshadowed by the gigantic issue' of the Gatt trade talks. The successful completion of the Gatt round was the surest way to stimulate growth and restore confidence.

Henning Christophersen, the EC Commissioner responsible for economic affairs, said: 'It is only a first step. It is the first time we have managed to agree the convergence of macro-economic policies and it creates an interesting precedent.'

The Commission predicts the package will generate pounds 28bn-worth of investment by closer co-ordination of economic policy and the creation of cheap loans to guarantee fresh public and private sector financing.

EC governments are pledged to try to co-ordinate incomes policies and fiscal management and work together to cut red tape that deters company start-ups and labour mobility. The Commission has increased the money available for infrastructure development in Europe's poorer regions and created a new European investment fund worth pounds 1.6bn to add to increased lending facilities at the European Investment Bank worth pounds 4bn.

The emphasis is to be on capital investment, on better training and research and on improving the incentives and financial support for small and medium-sized companies. Every EC country has already put forward plans for incorporating the agreed objectives into national budgets.