Europe and UN Take Bold Steps As Paris Gives In

The world reordered itself slightly in the past few days, but one big power was hard-pressed to declare victory.

Europe agreed this weekend to terms for a single currency to help unite a continent, and the United Nations settled on a new leader seen as able to bridge a gap between the US and the world body.

In both decisions, the head count stood 14-to-1 right up to the last minute. In both cases, France blinked.

The decision to appoint Kofi Annan of Ghana as the next UN chief capped weeks of public feuding between the United States and France over the post. At stake for France in the UN vote was its claim to speak for developing nations, especially Africa, within the UN Security Council.

At this weekend's European Union summit in Dublin, France accepted Germany's demands for substantial and largely mandatory sanctions against EU states with too-high budget deficits. France won a change in the name of the accord, from Stability Pact to Stability and Growth Pact, as a way to show the French that the EU is seeking to create new jobs.

When the 15-member Security Council began consideration of a new secretary-general, the US stood alone in opposing the reappointment of the Egyptian incumbent, Boutros Boutros-Ghali. But France, along with many African states, strongly backed Mr. Boutros-Ghali, a fluent French speaker who is popular in Paris.

After Boutros-Ghali suspended his candidacy, France threatened to use its own veto to block the appointment of Mr. Annan, Washington's choice for the post. Annan is a 30-year career UN civil servant and was educated in the US. A high-ranking French official, who insisted on anonymity, said that France opposed the Annan candidacy because a UN insider could not carry out needed reforms. But other diplomats say that the French veto was tit-for-tat response to the US veto of Boutros-Ghali.

In an informal poll on Thursday, all Security Council members but France supported Annan. On Friday, France dropped its objections, without explanation.

"The battle of the UN was engaged at 14 against 1 - the United States - but it risked ending at 14 against 1 - France," wrote the conservative daily Le Figaro after the vote.

The 15-member EU's weekend summit, which ended on Saturday, also began with a high-profile 14-to-1 standoff. The lone standout was Germany, which had been insisting that governments agree to strict curbs on their ability to spend their way out of a recession. But the key to a settlement was France's agreement on Friday to stand with Germany on this issue.

France and Germany have been the driving forces behind the plan for a single currency, but in the runup to the Dublin summit, Paris broke ranks with Bonn over Germany's proposal for a so-called stability pact.

According to the German proposal, automatic sanctions would be applied against countries that run budget deficits of more than 3 percent their gross domestic product. Fines for exceeding this limit could add up to 5 percent of a nation's GDP - billions of dollars for most nations. German leaders have assured their own public that the new euro, expected to be launched by Jan. 1, 1999, will be as strong as the German mark. But France's President Jacques Chirac wanted to reassure French voters that governments would be able to spend their way out of an economic slump.

After a luncheon meeting on Friday between German Chancellor Helmut Kohl and Mr. Chirac, France accepted a compromise that provides exception to the 3 percent deficit target, but only under carefully circumscribed conditions. In cases of a deep recession, where GDP drops by 2 percent or more in a year, countries can claim an automatic exemption. EU officials note that this has occurred only 13 times in Europe since 1960, and never in France. Otherwise, exceptions can be requested only if national output drops by more than 0.75 percent.

French leaders declared victory after the vote approving this pact, which was the last hurdle to agreement on terms for a single European currency. "We insisted on this name change, because the whole purpose of stability is to create jobs and growth," said presidential spokeswoman Catherine Colonna on Thursday.

The pact, however, may have a hard sell back home. In a weekend poll, only 28 percent of the French public said they were satisfied with the government's efforts to create more jobs. For French voters, the main concern for the last 20 years has been unemployment. With French unemployment approaching 13 percent and public approval of the government at a record low, French leaders also wanted to assure their public that a single currency will not make matters worse.

In Dublin, Europeans also called on Cuba to respect human rights and make more progress toward democracy. Europeans strongly opposed the US Helms- Burton law, which punishes foreign companies doing business in Cuba. But this weekend's Dublin statement will make it easier for President Clinton to suspend these sanctions when the issue comes up again next month.