EU reform plan is classic New Labour, says Mandelson

AN ECONOMIC reform plan to revive the EU's sluggish economies was controversially hailed yesterday as a "New Labour" programme for the continent by Peter Mandelson, the European Trade Commissioner.

His comments are hardly likely to reassure critics in Paris and Berlin who see Tony Blair's economic agenda as neo-liberal.

Mr Mandelson said efforts to revitalise the so-called Lisbon economic agenda were the "best chance in a decade to restore the authority of the European Commission", and could help win a referendum on the EU constitution.

Yesterday's initiative from the European Commission president Jose Manuel Barroso focuses on structural reform, liberalisation and increased research and development, aiming to boost GDP by 3 per cent within five years and create six million new jobs.

Many see this as a risky strategy since the willingness of the EU's member states to take tough decisions will determine whether the plan succeeds. Perhaps with that in mind, a target date for the EU to become the world's most competitive economy has been shelved.

Despite the focus on liberalisation, Mr Barroso is demanding more government spending on research and development. Yesterday he argued: "Member states must speed up efforts to meet the 3 per cent [of GDP] research spending target." The current average is 1.9 per cent.

Mr Mandelson added: "Growth and jobs are the traditional objectives of social democratic parties. We need jobs to finance generous social provision. Jobs are the best answer to poverty and a foundation of economic opportunity. Barroso is proposing a programme for Europe that we would describe as New Labour".

The Barroso programme, which highlights the problem of lagging productivity in the EU, promises to ease the burden of regulation on business. The Commission said yesterday it will review planned legislation requiring the registration and testing of about 30,000 household chemicals to make it more industry-friendly.

The Commission president also called for the creation of a "European Institute of Technology" likely to be sited in one of the new member states.