A triple alliance for European jobs

A new alliance of Britain, France and Germany led the way in making job- generation a new priority for Europe yesterday.

While heads of government were thrashing out the latest treaty on the future direction of European Union, at the Amsterdam summit, finance ministers agreed an economic package covering both jobs and the stability pact for the European single currency.

The package followed new resolve by France and Germany to resolve a bitter row over the euro rule book, which had cast new doubt over the future of the single currency, and overshadowed the Amsterdam summit.

After EU leaders struck their deal yesterday, Jacques Santer, the European Commission president, said:"We have seen today a reaffirmation of political will to complete EMU, in line with the agreed criteria. Today we have completed all the preparatory work and this is a very important stage."

Unveiling of the design of the future euro coins put substance to the message that the euro was back on track.

The design, which for Britain could accommodate the Queen's head on one face, shows maps of Europe in different contexts, including one against what a press release said was "a dynamic background of Europe's symbols", namely stars.

Tony Blair said: "There is an agreement to put employment measures right at the top of the agenda in respect of the single currency and, indeed, the development of the European Union."

The Prime Minister pinned the initiative on Gordon Brown, the Chancellor, and one source claimed: "They are now talking our sort of language."

Specifically Britain is determined to be first off the mark with a report on its own welfare-to-work programme, due in next month's Budget, for a Luxembourg jobs summit to be held in the autumn.

Under the deal Germany, backed by Britain, insisted that strict fiscal discipline for the single currency should not be watered down. France appeared to have made a series of concessions, particularly over its demands for major new spending to promote growth, and there were doubts about whether the Franco-German rift has truly healed.

Germany's chancellor-in-waiting seemed to herald a dramatic shift in alliances, arguing that the Franco-German marriage was now over. Gerhard Schroder, leader of the opposition Social Democrats, argued in favour of a new menage a trois, involving London, Paris and Bonn.

In an interview with the German financial daily, Handelsblatt, he argued that Britain was likely to be the driving force behind the "renaissance" of European politics.

Under the jobs package it was agreed that in the search to find schemes that work in delivering jobs, all governments would report to that forthcoming jobs summit on their own successes and failures in an attempt to ameliorate Europe's unemployment crisis.

A British source said: "We will take a lead on this. If countries can't admit they have problems, they are not going to come up with solutions. We have to learn from each other."

The British source said the autumn summit would assess the success of each countries' efforts on the basis of certain criteria: labour market costs, welfare reform, and emphasis on small and medium size enterprise, and competitiveness.

Meanwhile, although progress was made on the British demand to retain sovereign control over her own borders, there were still some problem words outstanding in the treaty text last night. But a British source said "the penny had dropped" and European colleagues understood that Mr Blair was adamant that the question had to be solved to his satisfaction.

A deal was expected to be announced today on fish quota hopping. Britain expects to secure new rules to deter foreign vessels fishing the British quota.The government also hopes that moves to create a common European defence contained in the draft Amsterdam Treaty text, will be removed before the treaty is agreed today.