EU summit ends on high

By Robin Oakley, CNN's European Political Editor

STOCKHOLM, Sweden -- European leaders have ended their summit claiming significant progress on an ambitious programme of economic reforms.

They aim to boost competition and lower consumer prices across the European Union to make it the most dynamic economy in the world by 2010.

But it was only half a step forward after the final day's proceedings had been dragged out by French battles to resist opening up their state monopolies in gas and electricity to foreign competition.

The French insisted on commitment dates being struck out of the draft communiqué.

French Prime Minister Lionel Jospin said they were not opposed to liberalisation, but that it had to be gradual and under control. Goran Persson, the Swedish Prime Minister and host of the Stockholm summit, conceded that there had been a "difficult discussion" on gas and electricity liberalisation.

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"It's not that good" he conceded. "But this is a process. It's how life goes. You don't get it all at once but this is not bad."

There was a difficulty, he said, in having companies that benefited from monopoly profits being able to compete to supply energy in other unregulated countries.

Persson claimed the summit had been a success because of agreement to fast track the financial services regulation process on the lines set out in the Lamfalussy report.

That should mean cheaper pensions and insurance for consumers and cheaper capital for business. He also hailed progress on freeing up air transport and postal services.

But the financial services deal is yet to be approved by the European Parliament.

Some delegations query whether anything significant had happened on postal services. And an "open skies" deal is still some way off with the European Commission now being charged with producing further proposals.

There was little concrete achievement in Brussels. Task forces were set up, objectives were declared and reports were commissioned.

But delegations departing from Stockholm agreed that the mood had been positive. They accepted Persson's caution that this had been only the first of 10 meetings between now and 2010 designed to turn the EU into the world's most dynamic knowledge-based economy.

"It's like riding a bicycle", said one Brussels official.

"You need to keep pedalling to keep going forward and that we have done."

The EU leaders have taken heart from the fact that 2.5 million jobs have been created in Europe since they first set out their objectives in Lisbon a year ago.

Robin Cook, the UK Foreign Secretary, declared: "The programme of economic reform agreed here will lead to cheaper financial services, cheaper energy and cheaper cars.

"It will lead to more trade, less regulation and more support for the high-tech industries which are the key to a more creative and dynamic European economy."

The Stockholm communiqué did its best to cheer world stock markets by asserting that despite a "less supportive" world economic situation Europe was equipped to weather any recession and to average 3 per cent growth in the medium term. It could rely upon its own strength.

The summit has set off new studies to tackle Europe's growing social welfare problems with a shrinking wage force having to service the pensions of a growing number of older people.

Efforts will be made to encourage more of those aged over 50 to stay at work and there were calls for childcare policies to encourage more young parents to work.

President Jacques Chirac of France had his own proposal for increasing the future workforce.

He urged European couples to "have more babies."

European leaders are looking too for ways of boosting biotechnology industries. But they failed to make progress in Stockholm on a Europe-wide patents system.

The summit communique noted the leaders'concern about the foot and mouth outbreaks and expressed "solidarity" with farmers, endorsing the measures so far taken to counter the outbreak in Britain and other countries.

Following the visit to Stockholm by President Vladimir Putin, it also gave backing to Russia's efforts to qualify for the World Trade Organisation.