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EU Summit Focuses on Economic Reforms, Terrorism - 2004-03-26


European Union leaders have turned their attention at a summit in Brussels to Europe's sluggish economy after adopting a series of anti-terrorism measures and restarting stalled talks on a constitution for the bloc.

One of the EU's most cherished goals is to create the world's most dynamic and innovative economy by the year 2010 and overtake the United States. But member states have dragged their feet in implementing economic reforms adopted four years ago at a summit in Lisbon that would help achieve that objective.

One reason is that politicians in European countries fear voter resistance to structural reforms that may cost jobs over the short run. But economists say that, in order to fight unemployment, Europe must undertake those reforms if it wants higher growth.

European Parliament President Pat Cox says there is no point in setting lofty goals if the political will is not there to implement them. He says it is absurd that European economic growth still depends on a boost from the U.S. economy.

"We have now, through the single market and through the upcoming enlargement, a European market that is one and a half times the number of consumers in the United States," he said. "We have a larger share of world trade than the United States, a slightly greater share of global GDP. And what do we do? We look to the United States, our neighbor, to give us a push."

Mr. Cox says 40 percent of the four-year-old structural reform package has yet to be enacted by EU member states. Two years ago, he says, the European Parliament approved a landmark law creating a single European patent. It still has not been ratified by member states. He says that U.S. firms apply for more patents in the European Union than do European companies. And he warns that, if spending by governments is not redirected to innovative industries, the current brain drain of European researchers seeking better paying jobs in the United States will continue.

Mr. Cox did hail progress by EU leaders on another front, the decision to re-launch negotiations on a European constitution that broke down three months ago when Spain and Poland insisted on having practically the same voting strength as Germany, Europe's biggest country.

"I think a significant breakthrough was made last night in the informal exchange at dinner," said Pat Cox. "I think the impasse is broken. I think the breakthrough is there, and the commitment, politically, is to deliver not later than the 17 of June."

Diplomats at the summit attribute the breakthrough to a new sense of unity among EU countries since the terrorist bombings in Madrid two weeks ago. They say the attacks forced member states to set aside a year of bitter differences over such issues as Iraq and face up to the fact that all of Europe may be a target for Islamic terrorists.

The EU leaders promised to implement a series of anti-terrorism measures that include improving police and intelligence cooperation and tracking Internet and cellular phone use by suspected terrorists. They also appointed a counterterrorism coordinator to press member states into complying with those measures.

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