BERLIN, March 2: Italian Prime Minister Silvio Berlusconi called for more flexible European labour markets on Saturday and said Germany’s Social Democrat Chancellor Gerhard Schroeder was coming around to share his view.

Schroeder opposes loosening European labour market rules as he believes the European social welfare system is superior to the US model. Berlusconi and Schroeder are due to meet in Rome on Friday.

However, there were signs that Schroeder was moving towards accepting the need for greater flexibility, Berlusconi told the German news magazine Focus in an interview released ahead of publication on Monday.

Naturally our views differ over the state’s role in the economy. The social democratic route means more taxes. However, there are signs that that the Social Democrats seem to be moving towards more flexibility, which is the only way, he said.

Industry leaders and centre-right politicians across Europe are seeking reforms in social welfare and the labour market, to make working hours and wage bargaining more flexible.

Schroeder has agreed on a need for reform in Europe’s largest economy, but only after a national election in September, and he says he does not want to disturb the balance between protection for workers and flexibility.

We have no reason to throw overboard what has made us strong just because a new fashion is discovered in the economics sections of newspapers, he said last week.

Berlusconi said he and British Prime Minister Tony Blair agreed on the need to change Europe’s labour markets.

Blair thinks like a liberal. We have the same visions and prescriptions for less state bureaucracy and a liberal economy. We agree that Europe must be more professional and needs the maximum number of jobs.

In Italy it’s easier to divorce your wife than it is to let an employee go. However, if I can fire an employee — with a good settlement then I’ll be quicker to hire someone else.

Berlusconi said that he and Schroeder did not plan to issue a joint document when they meet for regular Italian-German bilateral talks on Friday.

Reform of the EU institutions also would figure in his talks with Schroeder, Berlusconi said, adding that the start of the EU convention on the future of Europe was a good time to discuss various ideas on this issue.

As a convinced European I hope to sign a European Union constitution in 2003 in Rome, where the community was founded, he said.

Schroeder last week drafted a joint initiative with Blair on European Union reform ahead of its eastward expansion.—Reuters