EU: As expected, the informal meeting of EU leaders last week at Hampton Court produced few concrete results beyond patching up the strained personal relationship between the British prime minister Tony Blair and the French president Jacques Chirac.
Key differences remain over the best way to tackle globalisation and put the EU back on a path towards economic growth and creating jobs for the 19 million out of work in the world's largest trade bloc.
There is also the immediate challenge of trying to hammer out a deal on the EU budget for the period 2007-2013, a negotiation that will require even more guile and cunning than that shown by Hampton Court's founder and chief adviser to the Tudor king Henry VIII, Cardinal Wolsey.
Wolsey, who enjoyed lavish power and privilege at the start of Henry VIII's reign, fell out of favour over his failure to persuade the pope to grant the king a divorce.
Similarly, Blair, who raised expectations for the British presidency of the EU with a passionate speech to the European parliament in June, now risks losing face if he is unable to cobble together agreement on the EU financial perspectives at the European Council in December.
Grumbles about the ineffectiveness of the British presidency of the EU have been audible for weeks from the europhiles who dominate Brussels. The mood will turn distinctly hostile for Blair and Britain - particularly among the 10 new member states which need a deal to unlock EU structural funds in 2007 - if no compromise is agreed.
Blair's own personal prestige and authority seem to be already on the line at home, judging by the cabinet revolt over the proposed smoking ban in England that clashed with the Hampton Court summit last week. Indeed, many of the British press corps covering the event spent more time speculating about the politics of smoking than summit agenda items such as the challenges posed by globalisation or immigration.
"He's losing control of his cabinet," said one British colleague, speculating on Blair's weakened authority since his recent pledge to hand over the reins of power to chancellor Gordon Brown sometime before the next election.
With political difficulties emerging on the home front, Blair will be conscious of the need to restore his political credibility abroad after Iraq and leave a positive legacy in the European arena.
"Tony Blair knows that unless his presidency produces important results at the December summit in Brussels, his place in the EU history books will be seriously in jeopardy," says John Palmer, political director of the European Policy Centre, who is upbeat about the chances of a deal after a "clearing of the air" at Hampton Court.
Palmer predicts that Blair now accepts that the British budget rebate - a €4.6 billion refund from the EU budget to Britain - will be substantially reduced in any deal. He also agrees that any mid-term review of the EU budget will not reduce payments to farmers from the Common Agricultural Policy (CAP) until 2013, Palmer says.
The British budget rebate and reform of the CAP were the two big issues that caused talks in June on the EU budget to collapse amid much acrimonious name-calling between the British and French. So if Palmer is right and Blair is prepared to back down from his position in June, a deal should be achievable come December. But a few big hurdles remain before Blair can claim a deal.
First he must persuade his politically powerful chancellor to accept lower rebate payments. Brown, already under pressure at home over a growing budget deficit, will not want to give up the rebate without a fight. His own complicated relationship with Blair and ambition for his job may also cloud the budget debate.
A second challenge for EU leaders to grapple with over the next six weeks is a proposed EU "shock-absorber fund", which would offer funds to help workers adjust to the effects of restructuring. Paris is a strong supporter of the fund and Blair is backing the idea to help mend fences and curry favour with Chirac.
However, the paymasters of the EU - countries such as Germany, Sweden and the Netherlands - are strongly opposed to creating any new fund that would result in more exchequer transfers to the EU. There is also a concern among some member states that the fund will reward failure rather than promote competitiveness.
Over the next six weeks Blair will have to broach these thorny topics if he is to be assured of his own European legacy.