Delors calls for 15 million new jobs

JACQUES is back. Mr Delors, the President of the European Commission, has set out an ambitious plan to relaunch the European economy and reduce unemployment. It matches a call for greater flexibility in the labour market with a programme of public investment.

The first consideration is growth. The report sets a target of creating 15 million jobs by 2000, halving the rate of unemployment to about 5 per cent through a mixture of faster expansion and new ways of making sure growth creates more jobs than in the past. It recommends boosting growth above the European trend to about 3 per cent a year.

There is a message of austerity in the report. Maintaining growth at this level means more investment, which means keeping consumption down, it says. Budget deficits must be virtually eliminated by the end of the decade, and only fiscal austerity will help bring interest rates down.

But, above all, business and government must work together to boost investment and make the economy more competitive - the report's second element. This means using and improving European know- how and manufacturing in international markets.

The document proposes that the Union dramatically increase its spending on trans- European transport and telecommunication networks, and on energy and the environment. It lists projects for the period 1994-9 in these areas of 554bn ecus ( pounds 426bn).

Of this, the Commission believes the EU needs to finance 20bn ecus a year between 1994 and 1999. Some money can be raised by loans from the European Investment Bank and from EU-guaranteed bonds, convertible into shares in the companies that raised the cash. Money would also be raised by the Commission on the international capital markets through 'union bonds'. Britain objects to this, fearing it would limit finance ministers' control. But the report says no new spending is involved.

Research and development should also be boosted, the report says, but with much of the effort undertaken by member states and the private sector. New technologies should be exploited - the paper singles out information technology, biotechnology and multimedia communications.

The bottom line will be the number of jobs created, and the third section deals with employment. It calls for an increase in education and training, including a programme guaranteeing education or training to everybody under 18.

But perhaps the key section is the one on turning growth into jobs. This does not meet the expectations of Britain, which wanted a more thoroughgoing approach to deregulating labour markets; but nor does it support the case for Europe's mass of social legislation and welfare networks. Instead it urges greater flexibility.

It rules out statutory measures to reduce working time, but says flexible hours should be encouraged. It also rejects wage cuts, saying Europe cannot compete on price alone with low-wage economies in Asia, but says wage rises should be kept below the rate of productivity increase.

How much of this will happen depends partly on the EU summit this weekend, which may endorse the plan. But the report emphasises national action: 'It will be for each member state to take . . . the elements it regards as making a positive contribution.'