October 12, 2005 9:58 pm

Chancellor condemns EU social reform

Gordon Brown on Thursday launches a blunt attack on the European Union's social model, warning that the high level of unemployment across the continent means Europe's “old” economic system “is not working”.

As Britain prepares to host a summit of EU leaders this month on Europe's economic future, the chancellor warns in today's Financial Times that “the time for debating European economic reform is over” and that “now is the time for action”.

Tony Blair has tried to avoid antagonising his EU partners in the run-up to the summit at Hampton Court outside London, playing down any suggestion the UK wants to lecture Europe on how to boost economic growth.

But Mr Brown believes the meeting of EU leaders is a “make-or-break summit”, which must press home reforms of Europe's labour and capital markets, trade and macroeconomic policy. “The change we need is quite fundamental,” he writes.

Mr Brown says Europe's growth rate this year of 1.2 per cent “is a wake-up call we cannot ignore”. He declares a need for “wholesale economic reform” in Europe. “An old model that leaves 20m unemployed, 10m of them for more than a year, is not working,” he writes.

Mr Brown's article is the precursor to the publication today of a 7,000-word pamphlet the chancellor has written on Europe's economic future.

The Treasury said the pamphlet, “Global Europe-Full Employment Europe”, sets out Mr Brown's beliefs on how the world economy is changing.

Mr Brown says the EU “must rapidly complete the single market in energy, utilities, telecommunications and financial services”. His criticisms of Europe's social model are likely to trigger unease in some European capitals about the British government's intentions for the Hampton Court meeting.

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