European leaders take issue with Reagan's choice of issues

Both American attitudes and tactics toward this weekend's economic summit of the seven Western powers are being called into question by the Europeans.

Specifically, the complaints leveled against Washington are that:

* President Reagan is sounding too much of a one-note refrain on the risks of Soviet trade.

* The American President is too rigid on the crucial issues of American economic policy, exchange rates, and North-South relations.

* The Americans are effectively controlling the agenda.

What Western leaders seek at this conference to be held in Versailles June 4 to 6 are ways to lift their nations out of recession quickly and vigorously enough to gain political relief.

Most economic forecasts sight a recovery beginning in the West the latter half of this year - but a recovery so fragile it will be hard to distinguish from recession. Jobless ranks are expected to rise in the years ahead even as overall economic activity picks up.

High American interest rates, linked in European thinking to the US domestic budget feud and impending deficits, have been the convenient whipping boy for the West's recessionary morass.

Yet even a budget pact in Congress - something Mr. Reagan so far has not been able to deliver - would lead to a drop of one or two points in the prime borrowing rate next year, a useful benefit but hardly enough by itself to make the Western economies hum.

The elusiveness of full Western economic recovery, which Europeans and Canadians tend to see in an American context, partly explains the other summiters' impatience with Mr. Reagan's preoccupation with Soviet trade.

''Everything should not be suddenly blocked by one issue,'' observed a French government official.

''We are not ready to discriminate against the Soviet Union in economic terms ,'' the official said. ''We agree no special facility (credit arrangements) should be given the Soviet Union.'' Beyond that, however, the Europeans are not ready ''to enter into sanctions against the Soviets. . . . We cannot afford having a decline in our trade relations with the Soviets.'' he added.

An agreement among the seven Western economic powers could be reached calling for close monitoring of East-West trade under the Organization for Economic Cooperation and Development. And the seven nations could agree to a review of high-technology items that might benefit Soviet military advances.

The Europeans think, however, any attempt to boycott the Soviets would fail. ''We can't force them to kneel,'' a French official said.

The United States is seen as inconsistent in negotiating a long-term grain agreement, a hard-currency item, with the Soviet Union last week while quarreling with West Europeans over their credit sales. ''You get the benefit, we get the squeeze,'' said a French official on the Reagan East-West position.

Similarly the Japanese package of trade concessions announced last week to head off Versailles criticism was designed ''mostly for the US with tibdits for Europe,'' the Europeans complain.

Some European officials say President Reagan seems preoccupied with the fight against inflation as well, while their nations want to talk about unemployment.

''He'll have to listen to a few lectures about interest rates - the highest since the Depression. But I doubt whether it will cause any change in his position,'' says a European official participating in the summit.

''Inflation is Reagan's primary target. But is it worth the cost? You used to have double-digit inflation, now you have double-digit unemployment,'' he added.

The Europeans and Canadians are also disappointed in the lack of American interest in North-South relations. ''The US didn't even want to discuss North-South issues,'' says another Western official. ''There has been a complete deadlock on the subject since last year's summit in Ottawa. North-South issues are at least as important as East-West. Many third-world countries used to be star performers but are stagnating now. Economic growth is necessary in the South to offset Soviet opportunism.''

You've read  of  free articles. Subscribe to continue.
QR Code to European leaders take issue with Reagan's choice of issues
Read this article in
QR Code to Subscription page
Start your subscription today