No time for fun as Barcelona promises heated debate and a heavy workload

Date: 14/03/02

BARCELONA is synonymous with gaiety. Stroll down La Rambla, the mile-long walkway linking the city's centre with its port, on a sunny afternoon and you'll catch some of the world's zaniest street performers, juggling with fire or dancing with wild abandon.

Most visitors to the Catalan capital, then, come in search of relaxation and pleasure. But it is likely that the horde of EU policy-makers who gather there this weekend will work in a more tense atmosphere.

Speculation is rife that Basque separatists ETA could stage a major attack on the city.

And there is the potential that the leaders' summit could be marred by a bitter row over energy liberalisation.

It is tempting to state that the Union's prime ministers are split along clear-cut ideological lines about how this political hot potato should be handled. The full picture is more complex.

True, summit host José María Aznar is keen that it should produce an accord on wide-scale opening of energy markets to competition.

As a dyed-in-the-wool conservative, the Spanish premier is at odds with Lionel Jospin, his left-wing French counterpart.

Currently doing battle with Jacques Chirac in the presidential election race, Jospin cannot afford to isolate his country's main trade union, the 650,000-member Confédération Général du Travail, or state-owned energy giant Electricité de France.

Both are vigorously opposed to the European Commission's proposals for liberalisation, arguing they would trigger considerable job losses.

Yet, even though the EU has seven other Socialist prime ministers, none has rallied to Jospin's defence. Britain's Tony Blair, for example, has faced accusations of 'supping with the devil' for joining forces with Italy's populist right-winger Silvio Berlusconi to appeal for labour and energy market deregulation recently.

And the three Nordic member states joined forces last week to make plain they are on the other side of the energy debate to Jospin. Two, Sweden and Finland, have Socialist-led governments.

Finn Paavo Lipponen tried to portray the rift as one between the big states, with restrictive energy markets, and the small ones, which are more friendly to competition.

'It's like having a big guy and a small guy in a boxing match,' he said, 'and the little guy should only box with one hand and the big guy with both hands.'

In the pre-election environment, it is inconceivable that either Jospin or Chirac will allow other EU states to wound Gallic pride. The most likely outcome of Barcelona is that the Union's leaders will simply rubberstamp the compromise thrashed out at last week's meeting of EU finance ministers - that liberalisation should take place but that it should be limited to the commercial sector.

Yet there could be much heated debate in Spain before that agreement is reached. And some Union policy-makers are likely to voice their chagrin with France.

Competition Commissioner Mario Monti has said that the Union will lose credibility if it fails to move forward on economic liberalisation at the summit. 'It is very important that...we achieve our goals in energy,' he added. There is also an ideological hue to the French call for the summit to focus on tax and social policy in addition to the opening up of energy markets. Paris wants new measures restricting a firm's room for manoeuvre in corporate restructuring to be included in an EU employment blueprint.

And it wants a widening of the Union's probe into the use of tax breaks to lure firms from one country to another.

Yet it is by no means only French left-wingers who feel that the emphasis on hard economic issues should be counterbalanced with discussions about social policy. Belgium's centre-right premier Guy Verhofstadt - once dubbed 'Baby Thatcher' for his antipathy to socialism - made a similar recommendation.

Verhofstadt asked Aznar to invite social and labour ministers from the member states, so that the shots are not entirely called by premiers and finance chiefs. Aznar said no.

The seemingly endless cycle of violence in the Middle East will probably steal the limelight from all other foreign policy matters at the summit.

There is a considerable willingness on the part of EU leaders to throw their weight behind the 'peace plan' put forward by Saudi Crown Prince Abdullah, which would involve the Arab world recognising Israel should it withdraw from the territories occupied in 1967.

However, there is also much potential for a row over preparations for the international conference on financing development in Monterrey, Mexico, next week. The Union's finance and foreign ministers have failed to reach a consensus on the merits of a Commission proposal on increased official development assistance (ODA).

It calls on those member states giving the least amount of aid to at least bring their donations up to the current EU average by 2006.

Development chief Poul Nielson has said he will be disappointed if the EU does not prove its generosity at Monterrey; other commentators have argued that a failure to secure a final agreement on the dossier this weekend will give ammunition to the anti-globalisation protesters due to converge on Barcelona.

The German and British governments, meanwhile, have tabled proposals aimed at making the work of EU summits and the Council of Ministers more productive.

An Anglo-German paper recommends that summits should not have to deal with every issue under the sun. 'We should avoid European Council meetings becoming bogged down in detail with specific dossiers simply because the relevant sectoral Councils have failed to reach agreement,' read a letter signed by Tony Blair and Gerhard Schröder.

Foreign policy chief Javier Solana is also due to present views on institutional reform to the leaders.

Perhaps the most ambitious aspect of the two-day summit is the plan to have all business concluded by lunchtime on Saturday (16 March).

Achieving that goal will require skilled chairmanship by Aznar, who knows that summit discussions on tricky themes can drag on interminably.

With a heavy work programme in front of them, the Union's leaders might have to cancel any plans for an afternoon stroll on La Rambla.

Preview of the European Council, Barcelona, 15-16 March 2002.