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EU heads prepare jobs summit under Austrian shadow

LISBON: European Union leaders were gathering in Lisbon on Wednesday for a two-day summit they hope will start an economic revolution, determined that bickering over Austria will not overshadow their efforts.

Austrian Chancellor Wolfgang Schuessel, whose government alliance with far-rightists plunged the 15-state bloc into crisis, has said he will use the meeting to call for EU political sanctions against Vienna to be lifted.

Schuessel, who will be attending his first EU summit since taking office in February, is expected to address his fellow heads of government at a dinner on Thursday although no formal debate of the Austrian question is scheduled.

Portuguese Prime Minister Antonio Guterres, whose country holds the rotating EU presidency, made it clear that Vienna's 14 EU allies would not lift a freeze on bilateral ties imposed when Schuessel joined forces with the Freedom Party, formerly headed by populist firebrand Joerg Haider.

Austria's partners say that Haider's anti-immigration rhetoric and some controversial remarks seeming to play down Nazi crimes run counter to the EU's founding principles -- but that they do not want them to dominate the agenda in Lisbon.

"The subjects we are going to be debating are just too important for the future of Europe for us to be sidetracked over Austria," said one Portuguese official.

CONCILIATORY GESTURE

In what was seen as a conciliatory signal to Vienna, the Portuguese presidency announced that the traditional "family photograph" would go ahead, although it would be up to individual leaders to decide whether to attend.

France's President Jacques Chirac and Belgian Prime Minister Guy Verhofstadt, whose governments have been among Austria's fiercest critics, have strong reservations about being photographed alongside Schuessel.

Although Austria is isolated diplomatically, EU business has continued as normal and Vienna has said it will not block agreements despite its anger at the behaviour of its allies.

The special summit, which Portugal sees as a high-point of its presidency, is intended to plot a strategy to seize the opportunities offered by new technology to make EU economies more competitive and cut stubbornly high unemployment.

"We are looking for a strategy for economic growth and employment over the next decade, appropriate policies to bring this about and accords on a series of concrete measures," said former Portuguese minister Maria Joao Rodrigues, who headed the government task force drawing up the summit blueprint.

"It is politically a high-risk task because we do not know whether we will be able to achieve all that," she told a news conference on Wednesday.

SOME MEASURES ALREADY AGREED

But European Commission President Romano Prodi said a degree of agreement already existed amongst EU leaders, due to arrive late on Wednesday for an early start on Thursday.

"(Unemployment) is the main issue we are going to tackle in Lisbon. This is the main enemy we have to fight," he told journalists in Brussels on Tuesday. "Our objective is full employment. We feel this is a realistic objective."

EU leaders are seeking to adapt the best of the U.S. economic model, where quick adoption of new technology has been one of the secrets of the longest period of continuous economic growth in modern times. But they are also anxious to retain the EU's network of social protection.

"To have a dynamic economy, you must give certain guarantees to workers. It is easier to ask for (labour market) flexibility when a worker is sure of his rights," Rodrigues said.

Besides the economy, leaders are also due to discuss the Balkans and Russia, where the EU is pressing for a speedy end to the violence in Chechnya.-Reuters