Europe Plans for Economic Recovery, Stability in East

WESTERN European leaders adopted a plan over the weekend for economic recovery in their own countries and a project for a ``stability pact'' on security measures for Eastern Europe - although some in the East are grumbling that their most crucial needs are economic, not security.

Leaders of the European Union, meeting at a summit here, endorsed a report by EU Commission President Jacques Delors on improving Europe's poor economic competitiveness and job creation record.

``European Union'' is the name adopted by the European Community in its Maastricht Treaty, formally ratified in October.

British Prime Minister John Major said he was ``delighted'' that the report revealed a Europe won over to Britain's philosophy of free enterprise, a flexible, deregulated labor market, and controlled government spending. French President Francois Mitterrand, however, hailed the summit for confirming his call for a ``vast public works program'' to get Europe's recovery under way.

Such is the nature of the 12-nation Union, the smooth functioning of which is based on compromise that allows both leaders to say they are right.

The report recognizes that highly rigid labor markets in most Union countries have played a central role in limiting Europe's ability to create jobs to compete with the United States or Japan, for example. But in summit conclusions, EU leaders also call for up to $10 billion a year in new borrowing - against strong objections from the British - to augment funds previously approved for launching a series of trans-European transportation, environmental, and telecommunications projects.

``We see no advantage of individual countries trying to control expenditures if the Commission is to expand them,'' said Mr. Major at the summit's close Saturday.

The meeting had been billed as a ``jobs summit'' to address what the leaders agree is Europe's most urgent problem. Economic experts estimate that Union-wide unemployment will surpass 20 million next year, or nearly as many as the populations of Ireland, the Netherlands, and Denmark combined. But it is unclear whether the summit managed to offer the ``message of hope'' that Mr. Delors sought for Europeans.

FOR one thing, the summit was overshadowed by talks on the General Agreement on Tariffs and Trade, which in some EU countries are portrayed as a battle with the US for economic survival. (GATT, Page 4.)

Beyond that, though, the kinds of measures that could capture the public's imagination - new trans-European fast trains or high-tech ``information super-highways'' - won't become projects for many months, if then.

The report also recognizes that earnings and the cost of employing Europe's least-skilled will have to fall, if youth are to find jobs. In France, for example, where the general unemployment rate has hit 12 percent, the rate among young workers surpasses 20 percent. But the prospect of a lower minimum wage is unlikely to generate much enthusiasm.

The EU leaders also approved the project of French Prime Minister Edouard Balladur for a ``stability pact'' for Europe. The idea is to use preventive negotiations on minority rights and border disputes to head off the kind of conflict that has engulfed the former Yugoslavia and some republics of the former Soviet Union.

A conference among some 40 countries, from the US to Russia, is to be held next spring and be followed by a series of bilateral talks focusing on problems involving borders or minorities. Then a concluding conference, perhaps 18 months later, would cement the resolutions under a broad European Stability Pact.

The idea has faced a cold reception from some East European leaders, who say their most urgent stability risk is economic. The West is not doing enough to help ease economic tensions, they say. Some also find the proposal condescending, since its scope is limited to the East. What about Northern Ireland or the Basques in Spain, they ask?