Mandelson calls for strong EU leadership

By Timothy Heritage

BRUSSELS (Reuters) - Business Secretary Peter Mandelson will call on Friday for strong leadership of the European Union and outline his vision for revamping its economic policies.

Although Mandelson will not name Tony Blair in the speech, his comments could be seen as an attempt to revive the former prime minister's chances of becoming the EU's first long-term president.

Media say Prime Minister Gordon Brown has continued to promote Blair as a candidate, even though French President Nicolas Sarkozy has signalled that he and German Chancellor Angela Merkel will not back him.

"The point I will keep coming back to today is that we have a problem of leadership in Europe and political willingness to drive change," Mandelson will say, according to a text of the speech distributed to reporters in Brussels.

In the speech, to be delivered in the Belgian capital, he will call for "a new European leadership and a whole new magnitude of political cooperation".

Mandelson, a former EU trade commissioner, will also call for more innovation in business, a realignment of budget priorities and a "low carbon, high growth, high employment, banking-crisis-free future".

He will also warn that EU plans to tighten regulation of hedge funds and private equity managers could choke off investments and deepen the global credit crunch.

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