EU summit agrees key reforms

Not everyone is happy with the summit's results

European leaders have agreed a range of measures to strengthen their economies and improve competition in an attempt to catch up with the US.

Ending their two-day summit in Barcelona, leaders agreed to open up electricity and gas markets, to raise the retirement age and to increase job mobility.

Key agreements

Energy market reform

Average retirement age to rise to 65

R&D funding to reach 3% of GDP

EU-wide health insurance card

Day care for 90% of working mothers

Tax cuts for low earners

Galileo satellite system approved

Children to learn two foreign languages

They also condemned last weekend's elections in Zimbabwe, called on Israel to withdraw its forces from all Palestinian areas, and hailed Serbia and Montenegro's decision to form a loose federation.

After the summit's conclusions were announced, thousands of protesters took to the streets to demonstrate against European capitalism.

Although the march was for the most part noisy but peaceful, a BBC correspondent reports that towards the end of the demonstration riot police fired tear gas amid running skirmishes with the protesters in the southern part of the city.

Opening up markets

The summit's key decision is to allow industries and businesses to shop around between different countries' electricity and gas suppliers from 2004 onwards.

We have taken a fundamental step today

Jose Aznar
Spanish prime minister

But in a concession to France, where the issue is sensitive ahead of next month's presidential election, non-business consumers will not be included.

According to one report, France agreed to the deal after Spain dropped a proposal for rapid liberalisation of the rail freight market.

Though some leaders expressed disappointment at the compromise, Spanish Prime Minister, Jose Aznar, said business consumers made up 70% of the market.

"We have taken a fundamental step today," he said.

Several demonstrators were arrested

European Commission President Romano Prodi said the agreement would lead to a reduction in costs.

The leaders agreed to revisit within a year the possibility of allowing private consumers to shop around for electricity.

In an attempt to encourage workers to look for jobs abroad, the summit agreed on the creation of an EU-wide health insurance card, guaranteeing the holder treatment in any country.

They also agreed by 2010 to:

• boost funding for research and development to 3% of GDP
• provide daycare for 90% of children of working mothers
• raise the average retirement age from 58 to 65

There were also pledges to increase vocational training and education standards, boost internet usage by young Europeans, and cut taxes for low earners.

Sanctions threat

The leaders agreed that they were behind schedule with the changes planned at the Lisbon summit two years ago, to make the EU the world's most dynamic knowledge-based economy by 2010 and to create 20 million new jobs.

On foreign policy, the leaders:

• Warned of the possibility of new sanctions against Zimbabwe, and condemned last week's election as neither free nor fair
• Called for urgent implementation of all UN resolutions on the Middle East, and for immediate and effective action by both sides to stop the bloodshed
• Welcomed the decision by Serbia and Montenegro not to split apart, adding that the new country was on its way to EU membership
• Withheld from discussing possible US military action against Iraq after UK Prime Minister Tony Blair said it was premature

The leaders also said the EU wanted to take over Nato's 1,000-strong peacekeeping operation in Macedonia, and would make a new effort to overcome Greek objections the EU exploiting Nato military planning facilities.

They agreed to get an EU-wide air traffic control system known as Single Sky up and running by 2004, and to push ahead with development of the multi-billion-euro Galileo satellite navigation system, despite US opposition.