Belgian workers wonder what brave new world of `Social Europe' is all about

PERHAPS Renault thought that the population here in Belgium was so inured to bad news that it could slip through 3,100 redundancies at the profitable Vilvoorde plant in Brussels without anyone noticing.

The work at the factory, which produced 141,000 cars last year, is being transferred to France and Spain. As soon as the decision was announced Renault shares rose 4.9 per cent on the Paris market.

But the decision to close the plant by July, taken without any consultation with the workforce, has ignited an explosion of rage here and in France that has embroiled both governments and the Commission.

Workers are on the streets in their thousands. Yesterday 36,000 Belgian car workers downed tools for an hour, on Wednesday 900 Belgian workers occupied one of the French factories, newspapers have demanded boycotts, and a federal ministry has even cancelled an order for 150 cars in breach of EU rules. Even the king has been prompted to intervene.

In Paris, President Chirac summoned in the company's chairman, Mr Louis Schweitzer, to tell him he was "shocked", but the French Prime Minister, Mr Alain Juppe, did not question the necessity of downsizing, simply urging negotiations with the Belgian government. The firm has now announced an additional 2,700 voluntary redundancies in France.

The high-handed decision only confirms, however, the sense that Belgians have of France's dismissive treatment of its smaller neighbour. Le Soir recalls other incidents, from the Dassault bribes issue to France's handling of the Zaire/Rwanda crisis - "like the other precedents, the disagreements have been resolved, but the impression is rooted in Brussels of an arrogant France, often brutally so, which sees itself mandated by history to determine itself what must be Europe's political line".

And that from France's friends! The Flemish community is not nearly as polite. Indeed the closure is in a Flemish commune whose most distinguished inhabitant is the Prime Minister, Mr Jean-Luc Dehaene. He has denounced it as "brutal and unacceptable".

There is no doubt Renault is in trouble. Privatised last year (the state now only owns 48 per cent of the shares) the company lost £450 million. And within the EU car-makers' manufacturing capacity is 20 per cent above demand. Restructuring is inevitable.

The Vilvoorde factory opened in 1935, achieved peak production of 178,000 cars in 1978, and saw investment of an additional £60 million only three years ago. Its workforce has pioneered much-admired flexible working practices that allowed the company to respond to seasonal variations in demand and shared the available work around. Productivity was exceptionally high in a plant that was making a profit.

The workers say they are willing to discuss further cuts in hours and work-sharing to keep the plant open, but, it seems, Renault has made up its mind.

Why then Brussels? The workers here have little doubt that Renault's decision is motivated by political concerns not to put the French government under pressure. And they argue that the company, which enjoys all the benefits of the single market, is acting in clear violation of the spirit of its European obligations.

President Jacques Santer of the European Commission responded to concerns expressed by King Albert on a visit to the Commission by insisting that "the social drama being played out at Vilvoorde shows sharply that Europe needs a convincing social dimension ... Europe cannot simply be seen as an economic project".

Yet the truth is that the Commission had a strong hand in forcing the privatisation of the car firm as a condition for approving the last tranche of state aid to it.

The Belgian Commissioner, Mr Karel van Miert, has accused the company of breaking the law and is threatening to take a particularly close look at an application from Spain for approval of state aid to the firm. If it appears that the state is subsidising the relocation from Belgium, Renault is likely to get short shrift from Mr van Miert.

The Social Affairs Commissioner, Mr Padraig Flynn, said it appeared Renault had a case to answer; on Wednesday he was asked by the full Commission to consider strengthening the legal rights of workers.

The directives concerned are the 1975 collective redundancies directive and the 1994 works council directive. The former, in particular, requires a multinational company to begin consultations with its workforce in good time with a view to reaching an agreement.

But the Commission itself is unable to act - the legislation has been transposed into national law where Mr Flynn has implicitly urged workers to take legal action. Belgium is contemplating proceedings against the firm but the maximum fine of £400,000 is small beer to a company this size.

Yesterday Renault was saying it intended to fulfil its obligations to consult and has organised a meeting at European level with worker representatives on March 11th. Few imagine, however, that it will reverse its decision.

Not surprisingly, Belgian workers are asking what exactly a "Social Europe" consists of the right of a firm, for political rather than commercial reasons, to discriminate against workers in another member-state, while that state has no right under single market rules to retaliate against the products of that company? A brave new world.