Delors' plan wins over British

JACQUES DELORS' controversial economic revival package was given conditional approval by European Union leaders yesterday.

The European Commission President's plan overcame British and German objections after a 20bn ecu ( pounds 15bn) financing deal which Britain and others questioned was referred to finance ministers for further examination. Britain made clear it was not in principle opposed to future plans for more EU lending, but they need to be done differently.

The plan, which is presented in a 200-page booklet, sets out ways to reverse Europe's economic decline, stimulate growth and create new jobs.

'There are some very good elements in it,' said the Prime Minister, John Major, yesterday.

It is part of a five-year strategy to create a new economy in Europe, and should not be judged by its immediate results this weekend, Commission officials insisted. They point out that most of the initiatives are designed to go well beyond the end of the century.

British objections to the deal, which had seemed sweeping and general, were toned down in public statements on Thursday night, reduced further yesterday and tempered again by the time Mr Major met his European counterparts, according to other summit leaders. They said that he had been very positive about Mr Delors' ideas, and had agreed to let them be put forward for consideration.

The one area on which Britain concentrated its fire was a scheme for the European Commission to borrow 20bn ecus over five years on world capital markets. This was also questioned by other delegations, notably the Germans and the Dutch, and it was agreed to pass the proposal to finance ministers. European treasuries are wary of something that would allow the Commission to get more control over money.

But British officials made clear they did not in principle object to further EU lending to fund infrastructure projects, as long as it was done through the European Investment Bank, the EU's lending arm. This is solidly under the control of finance ministers.

A previous 8bn ecu lending facility is more than half used, and new rules mean that it could soon be exhausted. 'If and when the ceiling is reached we're ready to consider an increase in that,' said a British official.

The plan that emerged last week from the Commission contains a blueprint, not a detailed set of recommendations. It suggests increasing flexibility in labour markets, new spending on telecommunications, energy and transport links and other ways of boosting growth and reducing unemployment.

Mr Major made a detailed presentation to the summit on British views of the white paper. He listed six points in the paper which he liked, and four which he disliked. The tone of his remarks was very positive, according to officials from other delegations. 'It's not all confrontation by any means,' said a British official.

There has clearly been a big difference between the public rhetoric of opposition from Mr Major and Kenneth Clarke, the Chancellor of the Exchequer, and their private comments. British officials went out of their way yesterday to say that Mr Delors had produced a good effort, apparently following adverse reaction to their earlier criticisms.

Last night, British officials were saying that there were 'many welcome elements' in the paper, where previously the furthest they had gone was to call it 'an interesting mixture'.

German officials said that though they shared many British concerns - notably those about the financing facility - they were not prepared to be so outspoken as Mr Clarke. His attitude has been seen in Europe as one of total opposition, even though Treasury officials have said that much of the paper reflects, and is influenced by, a British contribution.

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