The European Union opens a summit Tuesday in Brussels on boosting jobs and growth in the 25-nation group, but other issues, including resuming arms sales to China, may receive prominent attention.
EU leaders are expected to endorse plans to streamline economic reforms intended to boost investment and employment, and make the EU more competitive. Supporters of the changes say they will create millions of jobs by opening up the services market, which makes up about 70 percent of the EU economy.
Luxembourg Prime Minister Jean-Claude Juncker, whose country holds the EU rotating presidency, says the reforms are overdue. He was heard through an interpreter.
"No one can sensibly dispute the fact that we need to open up the services sector in Europe," he said. "We're talking about 70 percent of added value in Europe, and there will be no internal market, unless we manage to open up the services sector."
But France and Germany have blocked initial plans for a full market opening. They fear this would bring on a wave of low-cost service companies from Eastern European countries, taking away jobs from Western Europeans. Prime Minister Juncker acknowledges that such concerns must be taken into account.
On another topic, EU leaders are also to approve a revised Stability and Growth Pact that governs the euro currency. Under the revision, nations that run deficits over the euro-zone's
three percent limit, may escape immediate sanctions, if they show their spending serves a worthwhile goal such as defense, economic restructuring, or development.
Germany and France have been pushing for changes. Both have been breaking the three percent ceiling.
The European Central Bank, which sets interest rates for the 12 nations that use the Euro, says it is seriously concerned about the changes, and they must not undermine the credibility of the currency.
Meanwhile, diplomats say the issue of arms sales to China may cast a shadow over the summit. The EU had been leaning toward the lifting of the 15-year-old arms embargo on Beijing, but concerns were heightened last week, after China passed a new law, saying military force could be used if Taiwan declares independence. The New York Times quotes unidentified U.S. officials as saying the EU has now put off plans to lift the embargo this year. The United States opposes lifting the arms embargo, saying it could alter the military balance of power in Asia.