EU Leaders to Grapple With Globalization at Summit

British Prime Minister Tony Blair will host the day-long informal summit in the lush Tudor surroundings of Hampton Court Palace, a former home of King Henry VIII on the River Thames, as part of Britain's turn at the rotating EU presidency.

For once, the leaders of the 25 nations that make up the world's biggest single market will try to put their respective national interests aside in favor of a public show of consensus on urgent economic change.

Blair, chairing the discussions, will have to avoid -- at least for 24 hours -- a repeat of the ugly showdown with French President Jacques Chirac over EU spending that marred the last European summit in June.

One potential outcome, political analysts say, is a consensus on the creation of a multi-million-euro "globalization fund" to help workers throughout the European Union adjust to new economic realities.

That idea could run into opposition, however, from Germany, Europe's biggest economy and the top contributor to EU coffers, represented at Hampton Court by outgoing chancellor Gerhard Schröder.

Chirac: Revive the EU spirit

Blair was due to set the tone for the summit later Wednesday in a speech to the European Parliament in Strasbourg, in the face of criticism that Britain has so far little to show for its turn at the agenda-setting presidency.

Writing in the Financial Times newspaper Wednesday, Chirac -- still reeling from France's rejection of the EU constitution last May -- supported Blair's efforts at Hampton Court to keep the spotlight firmly on economic growth.

"We must revive the European spirit and give it renewed impetus," he wrote. "Europe cannot stand still while its competitors forge ahead. To meet their expectations we must reassert our belief in a powerful Europe of growth and jobs that strengthens us."

But Chirac pre-empted any suggestion that Europe rip down its long-established social security systems in favor of what many Europeans regard as a ruthless "Anglo-Saxon" model of untethered markets.

"The society Europe strives for is centred on human dignity. Were we to give up this ideal we would betray our heritage," he said.

"France will therefore never let Europe become a mere free-trade area. We want a political and social Europe rooted in solidarity."

Spanish Prime Minister Jose Luis Zapatero, writing in the Guardian newspaper, said he intended to broaden the debate to include illegal immigration from sub-Saharan Africa -- a serious issue for Madrid.

"Status quo not an option"

Informing the debate at Hampton Court is a paper from the European Commission -- just 15 pages long -- which argues that "Europe must reform and modernize its policies to preserve its values."

It said it is "unacceptable" that 19 million Europeans are jobless, and that the European Union "is not closing the gap with the United States," let alone China and India.

At the same time, it said, Europe must act now to bear the burden of a shrinking and ageing population -- a combination that could, it projected, send growth down to 1.25 percent in 2040, compared with 2.0-2.5 percent currently.

"The status quo is not an option," the European Commission's representative in London, Reijo Kemppinen, told the Foreign Press Association in London on Wednesday.

"We have weaknesses in education, research, innovation and productivity which are holding back labor markets and economic performance," he said. "We have to close ranks and find new ways to address these issues."