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Big Three's Economic Summit Unsettles Allies on the Continent

Britain, France and Germany hope to spur growth. Others wonder at whose expense.

February 19, 2004|Jeffrey Fleishman | Times Staff Writer

BERLIN — The leaders of Britain, France and Germany met here Wednesday to discuss plans to stimulate economic growth, amid clamor from smaller nations that the Big Three are out to dominate European policies on everything from business globalization to the Middle East.

The Big Three constitute the majority of the European Union's population and drive its economy. Moves to strengthen their political ties and bolster stock markets could improve their competitiveness with the United States. But the one-day summit provoked worry in countries such as Italy and Spain that they are being eclipsed just as the EU expands to 25 member states this year.

"We don't want to dominate anybody," said German Chancellor Gerhard Schroeder. "This is not the first meeting of the three of us."

The leaders met as Europe is trying to bolster its place in the global economy, especially in the information technology sector. Germany and France, however, are struggling with budget deficits and costly social programs that are hurting corporations and small businesses. The jobless rate in both countries hovers around 10%. Consumer confidence is growing, but spending is not robust enough to catch the U.S. economy.

"The message of this summit should be and will be: Europe has to set clear priorities featuring growth and employment," Schroeder said after a 2 1/2-hour meeting with British Prime Minister Tony Blair and French President Jacques Chirac.

The leaders proposed that the European Union appoint a "super-commissioner" to spur business and industrial advances.

"Our own people and Europe as a whole know there is an economic world that is changing very rapidly," said Blair, urging Europe to capitalize on globalization and loosen restrictions on investors. "The response of the government on the national and European level has to be quick and equally adaptable to changing circumstances."

Blair's presence at the summit signaled Britain's desire for closer cooperation with France and Germany on business and labor market reforms. Britain has long relished its role as the continent's powerful outsider, but as new countries join the EU -- and the world faces terrorism and continued Mideast violence -- London is seeking broader strategic ties with Berlin and Paris.

Those overtures began in September, when Blair met with Chirac and Schroeder to heal animosities over Iraq. Blair's support for the U.S.-led war against Saddam Hussein countered Germany and France's bitter opposition to the invasion. Today, Chirac and Schroeder realize they need Blair's participation in revitalizing Europe; Blair knows that he must not let his alliance with Washington take his attention off the continent.

The EU stands for cohesion, but lately it has been troubled by big and small nations bickering over power. The 15 members -- another 10 are expected to join in May -- are arguing over a European constitution and how much of a voice second-tier countries such as Poland will have in influencing EU policy.

The Big Three summit was a reminder that EU members are not equal when it comes to global politics and economic clout. Blair, Schroeder and Chirac emphasized at a news conference that their meeting centered on exploring ways to work with all of Europe and was not a veiled attempt to consolidate power.

"I don't understand the sense of this criticism," Chirac added. "There always have been meetings of countries within the European Union.... This is nothing revolutionary. We wanted to talk about general problems that are of interest to Europe. We want to share our findings in a positive way."

But some of those not attending clearly felt threatened.

Italian Prime Minister Silvio Berlusconi called the meeting a "big mess." His foreign minister, Franco Frattini, wrote in Wednesday's Financial Times: "More Europe -- and a more united Europe -- is what we need, not a multitrack Europe moving along different paths. The leaders meeting at a trilateral summit ... should recognize that."

In a political jab at the Big Three, six countries, including Italy, Spain and Poland, sent a letter to the EU reminding Germany and France that the continent needed strict budget policies. Germany and France have repeatedly violated deficit limits set by the EU, transgressions that have angered other countries and called into question the two nations' fiscal leadership.

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