EU leaders say deal on jobs is in sight

THE Taoiseach, Mr Bruton, and the Tanaiste and Minister for Foreign Affairs, Mr Spring, arrived here late last night for the EU summit, expected to be the last major international assignment of this Government.

The hotels and she summit centre, the Dutch Central Bank, were surrounded by miles of metal fences patrolled by the 5,000 police on special summit duty.

EU leaders arriving last night were expressing growing confidence that a deal on the stability pact, one of the main achievements of the Irish EU presidency, was in sight. The pact aims at creating and maintaining policies to sustain the single currency plan.

Late last night the EU finance ministers, including Mr Quinn, were attempting to resolve serious differences on unemployment policy which had the potential to derail the main agenda. A French demand to soften the tough economic rules with new measures to promote employment threatened to block approval of the key deal.

On his way in to a pre summit meeting of EU Socialist leaders Mr Quinn said he believed there would be agreement on measures to tackle unemployment.

That would not, he said, involve tampering with the stability pact, which enforces financial discipline after the euro currency is launched. It would be done by adding a resolution on jobs to the agenda and enhancing the Union Treaty chapter on employment "to reflect the legitimate and understandable concerns of the French".

The Finance Ministers were meeting on the issue over dinner last night, but few were expecting real progress in advance of the formal proceedings this afternoon. "Such are the political dynamics of summits," one diplomat said resignedly.

But the challenge of agreeing on relatively cautious reform at the summit is still formidable and complex. Britain in particular is still far from agreement on a number of key issues, most notably its opt out from the provisions of the Schengen Treaty, proposals on new "flexibility" provisions and, like Ireland, the merger of the EU and WEU.

The insistence of the new administration in Paris on a resolution on enhanced economic cooperation has produced frantic diplomacy over the last few days to come up with a formula reflecting both French ambition and a German insistence, reiterated yesterday, that new cash for jobs is not available.

Arriving at the meeting the German Finance Minister, Mr Theo Waigel, said he was also "cautiously optimistic".

The Germans are believed to be concerned at French attempts to link the issue to the resuscitation of a programme of major infrastructure projects, the Trans European Networks, some of which were shelved for lack of cash at the Dublin summit.

This may come in a reference to changing the priorities of the European Investment Bank, the Union's investment arm, but Mr Quinn said that this might be too much for the Germans.