EU leaders OK economic measures

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Posted 9:20AM on Saturday, March 16, 2002

BARCELONA, SPAIN - Eager to get economic reforms back on track, European Union leaders signed off on a slew of pledges Saturday to cut red tape and boost Europe's floundering economies. As a two-day EU summit ended, however, the leaders announced a deal that would only partially open energy markets to competition, one of the more contentious areas of reform. The opening up of national markets, boosting investment in education and research and development, and promoting high tech, are all part of the EU goal to become the world's most ``dynamic economy'' by 2010. Admitting that they failed to meet targets set two years ago, EU leaders say they are adamant in pushing through reforms, in an attempt to catch up to the United states and boost job creation. Privatizing publicly owned utilities, however, proved difficult. In the end, they agreed to open the gas and electricity markets to competition by 2004 at the latest, but only for commercial customers. Officials said this amounted to 60 percent of the EU market. A date to open the gas and electricity markets for private users will be decided in the next 12 months, the leaders agreed. Energy liberalization has become a hot topic in France, where French Prime Minister Lionel Jospin and President Jacques Chirac face each other in presidential elections just weeks away. Both candidates are wary about the French public's concerns over energy prices. At the summit, Chirac and Jospin demanded ``solid guarantees'' that traditional public services remain off-limits to free enterprise. Still, Spanish Finance Minister Rodrigo Rato said the partial liberalization was progress. ``A year ago there was no possibility of agreement at all, that is why we should be pleased,'' he said. The EU leaders agreed to boost their research and development spending to reach 3 percent of gross domestic product by 2010, with two-thirds of investment coming from the private sector. They also aim to increase daycare for at least 90 percent of children of working mothers and move the average retirement age from the current 58 to 65 across Europe by 2010. In education, leaders promised to back increased training and to ensure each child learns at least two foreign languages and improve access to internet-connected computers. They also pledged to lower taxes for low income earners. The 15 leaders were also debating Mideast peace efforts, drafting a statement praising a peace initiative by Saudi Crown Prince Abdullah and demanding that Israel lift all travel restrictions on Yasser Arafat, the Palestinian leader. The Europeans also considered slapping more sanctions against Zimbabwe for staging flawed elections. ``The elections cannot be accepted as free and fair,'' Peter Hain, British European affairs minister, said Friday. A final decision on added measures against President Robert Mugabe is expected to be made at an upcoming foreign affairs ministers meeting in April. Possible action against Iraq was also discussed. British Prime Minister Tony Blair sounded out the views of other leaders on what steps the West should take against Iraqi leader Saddam Hussein. Meanwhile, Spanish authorities expect more clashes with protesters on the last day of the summit, as tens of thousands more demonstrators, including anti-capitalists and Basque separatists are expected to descend on Barcelona's historic center. Riot police used truncheons to beat back dozens rock-throwing protesters during often violent demonstrations on Friday. Authorities have deployed some 8,500 officers around the city, as well as combat jets and ground-to-air missiles and warships off the coast. NATO has also sent a surveillance jet.