Euro summit hopes downplayed

Finishing touches: Final preparations for the summit

By Mark Davies BBC News Online political reporter

Last summer Tony Blair described this weekend's Barcelona summit as a "make-or-break" meeting for the European Union.

A few months on, Downing Street now refers to the forthcoming talks on economic reform as a "staging post".

UK summit objectives

Commitment to welfare to work policies

Progress towards single EU financial market

More spending on research and development

2005 target to make broadband access available across EU

Cut red tape for business start-ups

Energy liberalisation

There is an acknowledgement that the pace of reform has not been as quick as ministers would have liked.

Keen to play down expectations for the summit, they stress that the EU is still at the beginning of delivering long term plans.

Moreover, with issues like the Zimbabwe elections, the Middle East crisis and the potential action against Iraq worrying world leaders, the Barcelona agenda could easily be overshadowed by discussions away from the summit meeting rooms.

Foreign Secretary Jack Straw has stressed that the meeting is aimed at building on plans agreed in Lisbon two years ago.

Lisbon was the meeting described as the "dot-com summit".

Internet plans

EU leaders agreed reforms which they hoped would create millions of new jobs by harnessing the power of the internet.

Mr Blair said at the time that the outcome of the meeting represented a "sea change in EU economic thinking".

There were bold plans to hook up all schools to the internet by the end of 2001 and proposals to liberalise Europe's telecommunications.

The growth of internet use and other new technology would lead to 20 million new jobs by 2010, EU leaders hoped.

A prosperous Britain needs a prosperous EU. Three million jobs and 60% of British exports depend on the EU

Jack Straw

The goal remains the same, said Mr Straw this week. The EU can become "the most dynamic modern economy in the world, with full employment, by 2010".

But progress since Lisbon has been slow. The EU unemployment rate is still about 10% and while there has been progress in telecommunications and the use of the internet, other markets have yet to be opened up.

The downturn in the world economy has also hampered the reforms, hence the lowering of expectations from Barcelona.

'Reform essential'

Mr Straw says the aim for the EU should be to learn from the success of the US economy - arguing that British citizens would each be £5,000 better off if American productivity could be matched.

Straw: Progress has been made since Lisbon

The UK wants European companies to invest more in research and development and to cut red tape to make it easier to set up businesses.

"Reform is essential," Mr Straw said. "A prosperous Britain needs a prosperous EU. Three million jobs and 60% of British exports depend on the EU."

The foreign secretary said progress had been made since the Lisbon meeting, with the cost of phone calls across Europe cut by half, more internet access and safer internet shopping and common standards against employment discrimination.

He said five million new jobs had been created in the last two years, though he acknowledged that new jobs would have come along even without the Lisbon reforms.

The UK government hopes the Barcelona summit will now make progress on moves to create more jobs through welfare to work policies for the long-term unemployed and to make more progress on moving towards a single EU financial market.

French reluctance

Britain also wants to set a 2005 deadline for making broadband internet access available across the EU and move forward on energy liberalisation.

There will be a heavy police presence for the summit

On the last point, the UK and other EU countries is finding itself at odds with France which, fearful of job losses, is reluctant to allow consumers the ability to choose between energy suppliers.

Political leaders in France also have an eye on presidential elections in six weeks and want to steer clear of potentially vote-losing decisions.

It is part of the reason why few are expecting significant progress this weekend.

Asked this week about Mr Blair's "make or break" prediction, Mr Straw said: "There won't be a break so the question does not arise. There will be progress. This is a 10 year programme.

"Progress could always be greater inside the EU, but progress has been much more than anybody expected."