Euro-doubts rise from the street to the elite

Sacked carmakers strike an international chord, says Sarah Helm in Vilvoorde

Four months after the closure, the union banners outside Renault Vilvoorde hang tattered and grey. Until February the giant blue hulk of the Renault factory, which dominates this grimy Flemish town, generated employment for 3,100 workers. Now it lies still beneath a viaduct thundering with trucks speeding towards Europe's markets.

On Thursday a new banner was hung over the factory entrance. It was the only one in French: "Jospin, aide nous a garder Vilvoorde ouvert" ["Jospin, help us to keep Vilvoorde open"]. The plea represents a desperate hope that France's new socialist prime minister, Lionel Jospin, might intervene with French Renault management to re-open the Belgian plant.

Yesterday the Vilvoorde workers took their protests to all 15 leaders of the European Union, joining a mass march for jobs in Amsterdam ahead of the EU summit, starting tomorrow. "We want a social Europe. We want to see if these politicians care," said Jean Pas, a Vilvoorde union leader. The Vilvoorde workers can even claim to have influenced the agenda of the European summit. It now looks certain that it will be dominated by the conflict destabilising the single currency - in particular, how to build both a competitive and socially fair Europe. Mr Jospin said last week that he would put jobs at the top of the agenda.

European people are increasingly impatient with their leaders' perpetual debate about institutional reform and now demand answers to real concerns, such as reducing Europe's 18 million unemployed.

Since the Maastricht Treaty was agreed in 1991, the spending cuts demanded by its convergence criteria for a single currency have begun to bite, and the perception has taken hold that ordinary people's jobs are being sacrificed for a project designed by, and for, a European elite.

The antagonism was containable until recently because a consensus existed among unions and the European establishment that Europe's only hope of competing in the world today lay in working together and forging a single currency.

Vilvoorde became symbolic of the conflict between economic cultures. The Belgian workers were sacked by Renault's management with no warning and no consultation, and the announcement was made to the press at the Hilton Hotel in Brussels, leaving the workers to learn their fate in the papers the next day. Yet the factory was widely recognised as a profitable, state-of-the-art plant where flexible working practices had long been in place.

The reason given for the closure was the slump in European car sales. But Vilvoorde workers want to know why their Belgian plant was singled out for closure ahead of French plants, and how Renault management was able to bypass worker consultation despite EU laws.

Most significantly, the closure highlighted gaping holes in Europe's social safety net as employers join battle in a globalised marketplace, and the impotence of Brussels, 10 miles up the road.

The move struck a chord across Europe, and calls for a "social Europe" shot up the EU's agenda.

The French Prime Minister promised in his election campaign to control the market forces which shut down factories, to boost investment to secure growth, and specifically to reverse the closure of Vilvoorde. But he has swiftly found himself at odds with his European counterparts, particularly Germany, over the design of the stability pact for the single currency.

The German-designed agreement, with its tough rules on budget controls, contained too few measures for growth and jobs for Mr Jospin, who demanded a rewrite. The French also looked askance at flexible job market proposals from Gordon Brown, the British Chancellor.

Mr Jospin, who has now declared that he will "go towards Europe without undoing France", has raised fears among some partners that he seeks to re-nationalise economic decision- making. The French newspaper Le Monde was suddenly echoing British conventional wisdom last week, declaring that the stability pact row shows that Europe remains a "mosaic of national economic cultures".

Yet no European leader in Amsterdam really believes that nations can go it alone, particularly on the economic front. The dangers of reverting to protectionism and nationalism lie all around: the Flemish far right nationalist group, the Vlaams Blok, has sought to secure new support among the Vilvoorde workers, who are deeply disillusioned with mainstream politicians.

Already there are signs that Mr Jospin is backing off from many of his election promises, recognising that he cannot control the market or fall out with the rest of Europe. At Amsterdam, a compromise is likely to be stitched up which falls short of his original demands.

At Vilvoorde, the workers have little faith that their factory will re-open. "We don't even know if the politicians want a social Europe," said a worker outside the plant. "But if they don't, they will find that the Europe they are building has no support from the workers at all."