EU summit clouded by protectionism row

22nd March 2006, Comments 0 comments

22 March 2006, BRUSSELS - European Union leaders open a summit Thursday amid deep divisions over economic protectionism, energy policy, enlargement and the fate of the bloc's moribund constitution.

22 March 2006

BRUSSELS - European Union leaders open a summit Thursday amid deep divisions over economic protectionism, energy policy, enlargement and the fate of the bloc's moribund constitution.

The two-day meeting has been billed as crucial to boosting EU energy security and spurring economic growth by European Commission President Jose Manuel Barroso.

Barroso has engaged in frantic shuttle diplomacy over the last weeks to most of the 25 EU capitals to win support for a jointly coordinated EU energy policy following Russia's brief cut-off of gas to Ukraine last January which led to shortages in several EU states.

But the commission chief is unlikely to get much support given most EU states' reluctance to cede national authority on energy to Brussels.

Bowing to such opposition, a draft summit declaration admits that the EU "fully respect(s) member states' sovereignty over primary energy sources and choice of energy-mix."

The summit mood has been soured in advance by an acrimonious row among leaders over protectionist moves by France, Spain and Poland.

In a backlash, Italy is scrambling to win support for a letter denouncing the economic nationalist tide which is sweeping through parts of Europe.

Britain looks likely to support the Italian initiative. Dutch diplomats said that while their government backed Rome in rejecting protectionism, they would not sign on.

"We agree with the letter, we support it, we agree with the contents," said a Dutch diplomat, adding that his country would decline to formally sign the letter in order to avoid further acrimony at the summit.

German diplomats, meanwhile, said Berlin had also decided not to sign the letter, which is targeted at its close ally France.

With tempers running high over moves by Paris to bloc Italy's Enel from taking over Franco-Belgian utility Suez, Italian Prime Minister Silvio Berlusconi looks set for a showdown with French President Jacques Chirac.

Italy holds general elections next month and Berlusconi is widely expected to use the summit for some muscular campaign posturing.

Other recent protectionist moves have triggered concern and are likely to further poison the summit atmosphere.

Madrid is studying ways to keep German energy giant E.ON from buying Spanish group Endesa. France, Luxembourg and Spain are exploring ways of keeping global steel giant Mittal from acquiring Arcelor.

And EU policymakers are entangled in an acrimonious struggle with Warsaw over Polish government moves to block the merger of Pekao and BPH, two local affiliates of the Italian banking group UniCredit.

"These are contentious subjects which will not be resolved at the summit ... they will be with us for years," said an EU diplomat.

Although the issue of further EU enlargement - this time into the Balkans - has been put on a back burner until a summit in June, leaders are expected to spar over just how fast and how far the bloc should expand.

A meeting of EU foreign ministers in Salzburg earlier this month spotlighted sharp differences between the new member states from central Europe, which mainly back fast-track enlargement, and old EU states such as France which have lost enthusiasm for expansion.

Raising a new barrier to enlargement, EU foreign ministers agreed that the "absorption capacity" of present members would in future be a key criterion for expansion.

This issue has aggravated a widening east-west split in the EU, with new eastern members already angry over restrictions which bar workers from their countries from entering most western European labour markets.

Also casting a shadow over proceedings will be the EU constitution which was rejected by voters in France and the Netherlands last year.

Some EU states - including France and Germany - want to revive at least parts of the treaty, but others such as the Netherlands and Poland are fiercely opposed.

Barroso and the current Austrian EU presidency are engaged in a last-ditch effort to salvage the meeting. The summit is set to endorse a lengthy catalogue of joint action on economic reform.

But hopes are low that the blueprint will spur any real change.

"One view is that the plan is just a wishy-washy motherhood and apple pie text of good intentions," an EU diplomat said, adding that a more charitable way of viewing it was as a series of areas where EU states were striving to reach consensus.

While there was scope for "sensible discussions," the diplomat, speaking on condition of anonymity, said, leaders who "only become Europeans for one night every three months" for EU summits were unlikely to achieve that goal.


Subject: German news

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