Hopes fade for summit agreement on reform principles

Date: 04/12/1997

Rory Watson and By Mark Turner

THE Luxembourg government's hopes of agreement on clear political parameters to guide negotiations on reform of the Union's finances and structural policies look set to be dashed at next week's European summit.

Spain, in particular, has dug in its heels and is refusing to commit itself to any central principles, such as maintaining the existing budgetary ceiling on EU expenditure, which might compromise its diplomatic manoeuvring when talks on agricultural and regional reform begin in earnest next year.

Luxembourg Premier Jean-Claude Juncker was in Madrid yesterday (3 December) and will visit a further nine national capitals in the next few days in a final effort to broker a deal for EU leaders to endorse in the Grand Duchy next weekend. But the omens are not good.

"The problem is that you cannot decide on a general orientation for the negotiations without closely examining the detail and that is not yet available. Also, everything is linked to everything else. You cannot agree the financial framework without knowing how much money is available from policy reforms," explained one Brussels diplomat.

Unless the Spanish government has a last-minute change of heart, the summit's main contribution to next year's negotiations on policy and budgetary reform is likely to be agreement on the procedures to be followed, but not the substance.

Internal policy reform will not be the only divisive issue on the EU leaders' agenda. Finance ministers failed to agree earlier this week on the membership of the proposed Euro-X council which will meet informally to discuss single currency issues once the euro is launched.

Although the UK government will not be among the first wave of EMU members, it fears being sidelined if it is not part of the Euro-X. The country's Premier Tony Blair will argue the case for British membership next weekend.

Both Germany and France are, however, taking an increasingly tough line with the four countries - the UK, Sweden, Denmark and Greece - expected to be absent from the launch of monetary union.

"We are no longer seeking a compromise. We tried to explain to them that we were ready to inform them and include them, but they did not like that, so we just won't inform them and that's it. We cannot have a minister with a different currency participating in talks among countries with the same currency. It is not reasonable," said French Finance Minister Dominique Strauss-Kahn after this week's meeting.

But Juncker can draw comfort from the fact that some of the pieces of the complex summit jigsaw are falling into place.

Foreign ministers will try to complete the formula for launching the next phase of Union expansion at their meeting next Monday (8 December) by agreeing that the enlargement process should be formally opened in February.

Negotiations with the small group of countries identified as best placed to take on the responsibilities of EU membership would then be opened with less pomp and ceremony at the end of March.

Previews of the European Council, Luxembourg, 12-13.12.97. See Section 2.1 for overview references to Agenda 2000, Section 5.3 for overview references to economic and monetary union and Section 18.17.a for overview references to the enlargement of the EU.