Luxembourg PM is unfazed by hectic presidency agenda

IT IS said that when Luxembourg's Prime Minister, Jean-Claude Juncker, has a problem that he wants advice about he turns first…

IT IS said that when Luxembourg's Prime Minister, Jean-Claude Juncker, has a problem that he wants advice about he turns first to his finance Minister and then his Employment Minister. The point is that the extremely competent Mr Juncker fills all three jobs himself.

Although only 43 with the looks of a well scrubbed 25-year-old yuppie he is well steeped in European politics, having been in government since 1984. He has already played, many say, a key role in the brokering of three treaties: the SEA, Maastricht and Amsterdam.

A committed European and mainstream Christian Democrat, he is above all a pragmatist with an eye for compromise. His strong relationship with both Chancellor Kohl and President Chirac was credited by the former Irish finance minister, Ruairi Quinn, with having saved the Dublin summit.

Luxembourg, with Juncker firmly at the helm, took over the presidency this week with a supercharged agenda. The reason for the hurry to get Amsterdam out of the way was the promise to 11 applicant countries that their membership negotiations will start in six months. On July 16th, the Commission will hand the presidency a massive 1,200 page analysis of each candidate's suitability, as well as strategy papers on how enlargement can be reconciled with the EU's standing financial commitments.

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It is a gigantic task, admits Luxembourg's veteran ambassador to the EU, Jean-Jacques Kasel, even to schedule discussions into the overcrowded agendas of ministers and ambassadors with a view to getting decisions in December on how the talks can proceed. And the decisions will not be easy, particularly in reconciling those who may lose out through the reform of structural and agricultural funding.

And as the date determining the participants in the single currency looms large - probably April 1998 - the Luxembourgers can expect a mounting frenzy of speculation on who will be in and who will be out.

Relaxed over dinner with journalists on Wednesday night, Juncker was supremely confident that it will start on time. He has an almost proprietorial air when he talks about the single currency. Much of the detail was thrashed out in the first half of 1991 under the previous Luxembourg presidency, with Juncker himself as finance minsister.

He makes clear that he is not obsessed with abstract figures - 3.0 or 3.2 per cent of a deficit is alright by him as long as countries demonstrate real, medium-term, sustainable convergence. He refuses to be drawn on 3.4 or who will be in, but says bluntly: "We can't have seven or eight countries below 3.2 and one above 3.7 per cent."

France? "I don't believe in lecturing the French. They know what they have to do.

He is also convinced that the German voices against the current timetable, the conservative Edmund Stoiber and the Social Democrats' likely candidate, Gerhard Shroder, will come round in time - the former because the farmers of Bavaria want the single currency, the latter because he wants the endorsement of big business.

The other challenge facing the Luxembourgers is a special one day summit on employment. Warning against high expectations, the Foreign Minister, Jacques Poos, insists it will be a landmark: it will be the first time the issue will have been addressed exclusively by an EU summit.

Poos is championing the idea, emanating from his own Socialist group, that calls for labour market flexibility must be matched by an attempt to break the psychology of short-termism among investors. He believes it's a matter of creating a new climate of optimism. This has in part been achieved by the British and French elections.

Poos argues that the special summit, probably in October, can also contribute if the leaders manage to come up with half-a-dozen practical projects. He also hopes to see a new emphasis by the European Investment Bank "the most conservative and orthodox bank in the world" - on small businesses and venture capital.

However, the presidency may have to walk a delicate tightrope on attempts at tax harmonisation. Junker has fought off talk of a pan-European withholding of tax on the foreign fortunes that reside in Luxembourg banks. Instead, he has promised that he will back such moves when they also apply to the entire membership of the OECD.

Patrick Smyth

Patrick Smyth

Patrick Smyth is former Europe editor of The Irish Times