Delors' New Deal on jobs rejected

THE PRIME MINISTER was last night on a collision course with Brussels after the European Commission President, Jacques Delors, disclosed sweeping plans to create 15 million jobs in Europe by the end of the century.

The Government reacted angrily after being sent the Commission White Paper on competitiveness, growth and unemployment two days before the European Union summit opens in Brussels tomorrow.

Senior British officials said the timing of the long-awaited 200-page document had been a 'cynical ploy' to by-pass detailed discussion by finance ministers last weekend.

But the Government's hostility is rooted more in deep ideological distaste for the 'excessively interventionist tenor' of the document. German foreign and finance ministers have also poured cold water on it.

However, Brussels officials believe Chancellor Helmut Kohl will broadly approve the ideas because they might help to finance German unification.

With considerable support for the White Paper in smaller EU countries, and broad approval likely in Paris and Rome, John Major could find himself isolated once again at this weekend's summit.

The plan is a kind of European New Deal, aiming to reverse the continent's decline, improve competitiveness and halve unemployment by 2000.

The White Paper, masterminded by Mr Delors, a former French Socialist finance minister, envisages pushing growth higher in the next five years, and increasing the number of jobs that growth delivers. It proposes a pounds 92bn investment programme in energy, transport, telecommunications and the environment.

It seeks to increase the labour flexibility by encouraging wage moderation, changes in working hours and reductions in social security costs. The Government believes Delors' ideas do not go far enough. It has said repeatedly that increased flexibility - including lighter employment protection - deregulation and reduction of non-wage labour costs should be central to job creation.

The White Paper asks for extra borrowing of pounds 6.2bn a year by the Commission. The cash would be lent governments and companies.

Details, page 12