Delors says EC is falling behind

EUROPE is slipping behind in its attempt to keep up with the United States and Japan, Jacques Delors warned yesterday in a speech to the European Parliament. The Commission President, poking his head above the parapet for the first time since the Danish referendum, concentrated his fire largely on the EC's problems of waxing unemployment and waning growth.

Many of the old themes were still there. Mr Delors said that it was now time to start considering institutional reform ahead of the EC's next phase of enlargement, which is likely to include Sweden, Finland, Austria and perhaps Norway. More federalist elements in member states and the Commission would like to go ahead with more Maastricht-style reforms, though Mr Delors said only that 'the discussion must begin with speed'.

But the President was clearly not in a mood to antagonise member states such as Britain, even at this late stage of the ratification of Maastricht. Instead, his comments reflected the growing fears that Europe is losing jobs, exports and prosperity.

Mr Delors said that while the US and Japan had created 20 million and 11 million new jobs, respectively, between 1970 and 1990, the EC had created only 8.8 million. There were severe economic problems in the US, Japan and the EC, he said. But 'amongst the three groups of the triad, at the moment it is the European Community which presents the least promising prospects of coming out of this crisis'. Mr Delors said that the EC's share of world trade had slipped from 21 per cent in 1981 to 16 per cent.

Falling growth and fears about European competitiveness have triggered a new concern about labour costs in Brussels. This has been fed by calls from industry for a loosening, or at least a slowing, of EC social policy plans. Trade unions have rejected this as a return to 19th-century social standards.

Claims that the Commission is dumping social affairs legislation were dismissed as nonsense yesterday by Commission sources, but evidently a reassessment is going on. Sir Leon Brittan, the External Trade Commissioner, earlier this week rejected any dichotomy between tackling labour costs and respecting social policy. 'It's no use saying that we are not prepared to send children up chimneys, because that is not what the debate is really about.'

Padraig Flynn, the Social Affairs Commissioner, launching a new Commission initiative on unemployment, said that the EC would push on with employment legislation that is opposed by Britain, such as limitations on working hours.