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. Last Updated: 07/27/2016

EU Inches Ahead at Talks on Jobs Plan

LUXEMBOURG -- European Union leaders moved toward consensus at their employment summit Friday on a series of guidelines designed to turn tired promises into genuine action to create jobs for the EU's 18 million unemployed.


A draft accord included proposals for cutting payroll taxes, relieving the red tape burden on business and linking welfare payments to vocational training.


"Policies must help unleash the potential for dynamism and enterprise to be found in Europe's economy," said the draft that the 15 leaders were expected to approve.


But they stressed the guidelines would not be legally binding and that EU nations would be free to choose how far they go in implementing such measures.


British Prime Minister Tony Blair urged his colleagues to ditch "old ideas" on taxes and welfare, which he said were hobbling business and stifling job prospects.


"The way to create jobs and security for the future is not to load a whole lot of costs on business or old-fashioned regulation," he told reporters ahead of the daylong meeting.


But others, particularly Blair's fellow Socialists in Paris, don't share his enthusiasm for U.S.-style labor deregulation for fear this will usher in lower wages, job insecurity and a weakened welfare state.


In a jab at his own Socialist prime minister who advocates a 35-hour work week without loss of pay, France's Conservative President Jacques Chirac cautioned against "the mirage of dangerous experiments [that] can seriously impede the effectiveness of the fight against unemployment."


Prime Minister Lionel Jospin has outraged business leaders by agreeing to trade union demands for the 35-hour week. Italy's center-left government has made a similar pledge.


The British deny that their approach will undermine Europe's treasured social security system. Blair argues for a "new European way" that blends dynamic, free-market economics with continued welfare protection.


That system is already largely in place in Britain, the Netherlands and Denmark. They have seen unemployment fall to about half the EU average of 10.6 percent. Meanwhile, the EU's biggest economic powers, Germany and France, have clung to traditional protected labor markets and face unemployment levels unseen since the 1930s.


To ensure the summit produces something tangible, the leaders were expected to approve a proposal from Luxembourg Prime Minister Jean-Claude Juncker for EU nations to present yearly "action plans" setting targets for increased vocational training, lower taxes, and less red tape.