Summit Moves EC Toward Union

But Britain's insistence on an 'opt-out' clause also revives prospects for two-speed Europe. EUROPEAN UNITY

THE European Community took substantial steps toward economic union and an eventual European defense at its summit here this week. But at the same time, the Community of 12 moved backward in ways that could spell trouble for the future.Facing an adamant and unmovable Britain, 11 EC members agreed to pursue a social policy dealing with such issues as labor and employment on their own. Although the move saved the summit - and a year of negotiations for tighter economic and political integration - from collapse, it set a bad precedent at a time when the Community is envisioning its own enlargement. In a watershed move, the Europe of the German deutsche mark, the French franc, the Dutch guilder, and the British pound is now virtually certain to have a single currency by 1999, if not a year or two before. The foundation blocks of a European defense, complementing the NATO alliance, yet carrying increasing weight as the United States scales back its European military presence, have been laid. While those decisions suggest closer European cooperation, the move on social policy portends years of disagreements. Other European countries lining up to join the EC also may be emboldened to demand exceptions from Community regulations. "We just got through very difficult negotiations [creating a 19-country free-trade zone between the EC and countries of the European Free Trade Association] that were held up because we insisted everybody had to play by the same rules. Are we now sending a very different message?" asked one senior EC official. Iceland had sought to protect its fishing waters from EC fishing boats, while Switzerland and Austria wanted to preserve their Alpine passes from EC transport trucks. By approving an economic and monetary union agreement that grants Britain its own "opt-out" clause and establishes strict economic criteria before countries can participate in the single currency, the new EC treaty also revives prospects of a "two-speed Europe" where the "good students" would leave behind the "bad." That could increase pressure for difficult political unity.

Setting positive tone Yet early yesterday, as EC leaders assessed the treaty they had forged after two days of talks, their tone was positive and generally encouraging for the EC's future and European role. Accustomed to hard bargaining, leaders said the accords went as far as current conditions allowed. "When I take into consideration the total, I consider it's a good result," said Dutch Prime Minister Ruud Lubbers, who holds the EC's rotating six-month presidency. He noted that the new treaty calls for the first time for Community action in internal justice, immigration, and political asylum. Only a few years ago "there was no enthusiasm at all to bring those areas into the sphere or our Community," he said. At the same time, he acknowledged that in the areas of economic union and social policy, "one can talk about a difference of pace." German Chancellor Helmut Kohl said that "with the decision at Maastricht, this Europe has reached a decisive breakthrough." Brushing off criticisms that aspects of the economic union and social policy decisions set back Community integration, he said "the current of history leads to ... European unity; I have no doubts about this." EC Commission President Jacques Delors said he "sticks to" his presummit assessment that an approved process for common foreign policy decisionmaking would be inefficient and unworkable. "But I also recognize it was the only compromise possible," he said. The two-tier system calls for EC members to decide first by unanimous vote what areas of foreign policy they will then decide by majority vote. Britain had predicted that the treaty's proposed chapter on social policy would be the summit's toughest sticking point. The British saw the chapter essentially as a labor policy, since it would take up such issues as working conditions, hours, and equal opportunity rules. Prime Minister John Major said the chapter risked "undoing 12 years of Conservative Party government" in Britain, during which work days lost to labor union action were cut from 29 million a year to 2 million. French negotiators said the effect of a "social Europe of 11" would be that Britain would lose its veto right over an important area of legislation, and one that held symbolic importance for Europe's workers. "They can no longer hold up the Community's progress on this," said one French source, noting that a social charter approved by the same 11 countries in a 1989 declaration had been held up by Britain. The row reflected the deep cultural differences between Britain and her neighbors on the continent, where a tradition of labor-union-government relations is an essential element of social harmony. Acknowledging that difference, Mr. Lubbers said, "We are not arguing for a melting-pot Europe." But he expressed confidence that in both the social and economic areas, Britain would end up joining its partners. As an example of the EC countries sticking together, Lubbers singled out agreement on the demand by the EC's poorer countries for development funding in exchange for pushing to meet economic union hurdles. Led by Spain, those countries, agreed to a plan to create a new fund to help them meet Community standards in environmental protection and transportation infrastructure.

Compromise on defense In the area of defense, the EC agreed to wording that satisfied the staunchly pro-NATO British and Dutch, as well as French and German desires for development of a European defense pillar to accompany a more forceful foreign policy. In fact, defense had faded as potential trouble spot ever since NATO's November summit in Rome, where the United States expressed its support for a stronger European defense presence within the alliance. Reflecting the swift changes in Europe and the French view that the EC's integration process is moving in the right direction, Mitterrand spokesman Jean Musitelli said, "Who would have guessed even in 1989 that we would today be able to lay the foundations of a European defense pillar, and in perfect harmony with the American government?"