Delors unveils hi-tech plan to create new jobs: Commission President sets out ambitious scheme for fighting 'Eurosclerosis'

JACQUES DELORS yesterday presented a new plan for the economic renewal of Europe which could be worth up to pounds 100bn a year. Britain immediately voiced reservations about the strategy, which it fears does not focus enough on increasing competivity and reducing labour costs.

The Commission President's plan, presented to the European Community summit in Copenhagen, would redirect resources to high-technology industry and improve training and education. But it accepts not everyone in Europe will have a full-time job.

In a lengthy presentation to EC leaders, Mr Delors laid out the problem. Unemployment was Europe's 'Achilles' heel', he said; competitivity was slipping, and growth was stagnant. The EC was once more in a period of 'Eurosclerosis', as it had been in the early 1980s. Then, salvation came in the form of the single market programme, he said. The new Delors plan is clearly set in the same mould, as a way of restoring momentum and confidence to the Community, and was broadly welcomed by the EC leaders.

'The European crisis is the sum of our national crises and is above all about psychology,' said Chancellor Helmut Kohl of Germany. 'We must kill off this image of weariness, we have just as many grey cells as the Americans or Japanese.'

The Delors plan proposes a 'Common Information Area', defined as a modern, decentralised economy linked by a new hi-tech infrastructure. This is similiar to the idea of 'information superhighways' supported by President Bill Clinton.

Initial investment of 5bn ecu (pounds 4bn) would be required, followed by 5-8bn ecu a year. This would be supplemented by increased co-operation on research and development, which Mr Delors suggested should increase from 2 per cent of EC gross domestic product (GDP) to 3 per cent - about 70bn ecu. He also envisaged new transport and telecommunications networks with a 10-year package of 30bn ecu a year.

Education and training would be given a greater role. People should be encouraged to keep learning after they left school, and everybody should be entitled to lifelong training through a voucher system, said Mr Delors. He argued that spending on job agencies should increase from 0.1 per cent of Community GDP to 0.5 per cent, which is an increase of about 28bn ecus.

The Commission President also suggested a 'new model of development', taxing natural resources rather than labour, work-sharing, and creating jobs through environmental policy. But the paper warns that no one can any longer expect a job for life. 'Priority must be given to providing everyone on the labour market with a job, activity or useful training,' it says.

Before the Brussels summit in December the Commission will turn the ideas into a detailed blueprint, if EC leaders agree today. The total amount of spending in the paper amounts to a massive 133bn ecus. But it is unclear how much of this would be new money, and how much would involve spending by the EC rather than member states. Indeed making the plan work could spark huge rows. It is very vague at the moment, and sparked little controversy yesterday only because the details are absent. In particular, the role of EC social policy is hardly touched on.

Britain made it clear it wanted the Commission to scale down its aspirations in this area and tackle labour costs. 'I fear we are pricing ourselves out of world markets and our workers out of jobs,' John Major, the Prime Minister, told the summit. 'There is a real danger that harmonisation at Community level is locking us in to costly labour market rigidities and driving away business to our competitors.'

Other member states made it clear they would not countenance dropping the social dimension of Europe, and said Britain was isolated. 'It's not the thinking of most governments that the crisis would be solved by returning to traditional policies,' said Neils Helveg Petersen, Denmark's Foreign Minister. 'We must train the workforce better and seek other ways of improving productivity.'

Leading article, page 19