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Europe's Leaders Launch `Union' Amid Fizzled Public Enthusiasm

In sign of its weight, Germany was chosen to host economic institute

THE 340 million citizens of the European Community today woke up citizens also of the newly ordained ``European Union,'' although a preoccupation with Europe's record-breaking unemployment may leave them unaware of any difference.

Following Friday's ceremonial launch of the Maastricht Treaty by leaders of the 12-nation Community, EC citizens as of today can vote in local elections wherever they reside in the Community, for example, and even run for local office there.

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The Community - or Union - will try to take ``joint'' action on the international stage as its first fledgling step toward building a common foreign and security policy. And a new European Monetary Institute, the forerunner of an eventual European central bank, will begin the task of encouraging a convergence among Europe's increasingly divergent national economies. EC leaders decided to locate the institute in Frankfurt, a major victory for Germany.

Yet with strikes and social unrest mounting across Europe, the risk grows that Europeans will increasingly see the Community, and the Maastricht Union in particular, as irrelevant. As European leaders whisked around Brussels in their shiny limousines Friday, striking Belgian rail employees protesting a government austerity plan tied up the country, while in France the government announced a new unemployment high of 11.8 percent.

``At times in recent years, we may have moved too far ahead of public opinion,'' British Prime Minister John Major told his colleagues, ``but as far as growth and unemployment are concerned, we are lagging behind them.''

Still, the leaders took no significant economic action, deferring the topic to their December summit when EC Commission President Jacques Delors will unveil a much-anticipated ``white paper'' on steps to increase Europe's job creation and competitiveness.

That proposal, billed by many to be as significant as the Community's Single Market project of the 1980s, will focus on how to cut employers' costs and increase productivity without gutting Europe's highly developed social welfare system.

The decision to place the Union's new monetary institute in Frankfurt was this summit's most significant, both for its potential impact on European financial marketplaces and for what it says about the evolution of a post-Berlin-Wall Europe.

A German site for the institute was long opposed by France and Britain: Neither country wanted to see Frankfurt reinforced as a European financial capital at the expense of Paris or London. Many Europeans in general worried that such a move would amount to official recognition of what is already considered a ``deutsche mark zone.''

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But German Chancellor Helmut Kohl argued that the German people, attached to the deutsche mark as a symbol of their postwar prosperity and increasingly reluctant toward Europe, needed a sign that the European project would not lead to abandonment of German-style economic stability. And French officials finally realized that their desire to break the German central bank's hegemony over European monetary policy through creation of a single currency would only come at the cost of recognizing Germany's economic preeminence.

It will be ``better to be several [nations] managing the same money,'' said French President Francois Mitterrand. ``Each country will have its word to say, rather than leaving the managing to [one] to make the decisions all alone.''

Still, the decision reflected a reunited and increasingly emboldened Germany's growing political weight. How the Community manages Germany's new-found presence, especially as the new Union struggles with enlargement to take in much of Scandinavia and later Central and Eastern Europe, will be one of its sternest tests.

``The choice facing Western Europeans over the coming years is not between integration or disintegration but between a well-managed Union and a bungled Community, subject to popular protests against remote bureaucracy or the unacceptable hegemony of one or more member states,'' says Peter Ludlow, director of the Center for European Policy Studies in Brussels.

Yet many European analysts believe the EC is likely to remain bogged down in what Mr. Ludlow calls ``gloomy political debate'' until the economy and employment turns up, and until Community ``motors'' France and Germany both have new leadership after German elections next year and French elections in 1995.

No one is convinced however, that Mr. Mitterrand's successor, or even less Mr. Kohl's, will be such adamant Europeans.

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