EU Will Open Its Energy Markets

European Union leaders agreed here Saturday to reforms designed to make their economies more competitive, though resistance from France produced a proposal to open the alliance’s energy markets by 2004 only in the commercial sector.

Conducted within a security cordon of about 15,000 police, the Barcelona economic summit was the first in a year that has seen the introduction of a single European currency, the euro, and the assumption of the EU’s rotating presidency by the Spanish government.

The meeting was symptomatic of a curious contradiction: Even as Europe drifts further from the United States because of tensions over foreign policy, leaders are undertaking economic changes that will make the region more closely resemble the U.S.

The agreements in Barcelona amounted to an economic “change of gear,” an enthusiastic British Prime Minister Tony Blair said Saturday. Even center-left governments accept that markets will have to be opened and competition stimulated to achieve the lofty official goal of making Europe’s economy “the most competitive in the world,” he said.

“There’s been an idea that the European social model is about more and more regulation, is about state control, is about an old-fashioned attitude toward science and technology,” Blair said. “The discussion of economic policy at this summit might be a world away from the type of discussion” five years ago.

As Blair spoke, a massive police deployment in this prosperous coastal city prepared for a third day of protest marches, which so far had produced only minor street clashes. Caravans of armored vehicles, riot squad vans and police sentries armed with heavy weapons filled the elegant, tree-lined boulevards that flow down urban hills to the Mediterranean. Authorities were on guard against a triple threat of Islamic and Basque terrorists and violent opponents of globalization such as those who wreaked havoc at international finance meetings in Genoa, Italy, and Seattle in recent years.

In ironic counterpoint to the EU ideal of erasing borders, security fears caused Spain to temporarily reinstate during the two-day summit the border passport checks that were eliminated for travel within the EU years ago.

Apart from attending to the safety of its guests, the center-right government of Spanish Prime Minister Jose Maria Aznar played a decisive role in the political configuration shaping the debate here. After years of social democratic dominance in the union, the new push for U.S.-style free market policies has been led by Spain, Britain and the center-right government of Italy.

In Spain, Aznar has overseen an impressive boom, eliminating budget deficits, sustaining high growth rates and creating, according to official figures, 590,000 jobs in the last two years alone. The pragmatic Aznar has used the EU presidency to tout the Spanish model and promote policies that are tough on terrorism and more closely aligned with the United States than those of many other European administrations. Peers praised Aznar on Saturday for winning advances on an economic agenda that had been stalled for the last year.

“This was a process that had been paralyzed in many respects,” Aznar told reporters. “What we have done in Barcelona is unblock it and make it irreversible.”

Nonetheless, the center-left governments of France and Germany proved that they are still a formidable power axis. France, in particular, resisted efforts to throw open European energy markets to full competition by 2004.

President Jacques Chirac and Prime Minister Lionel Jospin of France attended the summit at a delicate political moment: They are opposing each other in a presidential election next month. Both adamantly defended France’s view that energy is a vital public service that must be carefully protected from the vagaries of the market.

In the end, the French won a compromise. The EU’s 15 leaders agreed to liberalize electricity markets by 2004 for industrial consumers but not for households.