Franco-German affair may not be about to end

EUROPEAN DIARY/Denis Staunton: The letter was just four pages long and its subject, reforming the EU's Council of Ministers, …

EUROPEAN DIARY/Denis Staunton: The letter was just four pages long and its subject, reforming the EU's Council of Ministers, was scarcely electrifying. But last week's joint submission by Germany's Mr Gerhard Schröder and Britain's Mr Tony Blair has created a sensation in Europe and raised questions about the intentions of the EU's biggest nations.

Some German newspapers declared that the Franco-German motor behind European integration had finally given up the ghost. And France's Foreign Minister, Mr Hubert Vedrine, was reported to have said privately in Brussels that the Franco-German relationship was dead.

Officials in Berlin and London played down the letter's significance, pointing out that it was not suggesting any changes to EU treaties and insisting that it was not linked to last weeks's launch of the Convention on the Future of Europe.

Mr Schröder stressed France had been informed in advance of his initiative with Mr Blair and he pointed out that Franco-German summits take place every six weeks. He denied he and Mr Blair were bent on strengthening the Council of Ministers.

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"I want Europe to function, for the institutions to work well and to have clearly separate responsibilities. That is why Tony Blair and I have attempted to organise the forum in which we operate, the Council of Ministers, more effective. That is not directed against anybody," the chancellor said.

Germany has traditionally been an advocate of a strong Commission that could some day become an effective executive for a federal Europe. But Mr Schröder has been sharply critical of the Commission in recent weeks, accusing it of displaying political bias in its unsuccessful attempt to reprimand Germany over its high budget deficit.

At last Wednesday's cabinet meeting in Berlin, the chancellor is reported to have launched a scathing attack on the Commission and political observers predict that he will step up his criticism of Brussels during Germany's forthcoming election campaign. Mr Schröder's main challenger in September will be Bavaria's conservative prime minister, Mr Edmund Stoiber, a long-standing critic of European integration.

Mr Blair has sought to improve London's relationship with Berlin since hentered office in 1997 and ministerial links between the two capitals are now extensive. The two governments have now started work on co-ordinating their policies on the future shape of the EU and officials report that there are already substantial areas of agreement.

Meanwhile, French policy on Europe has been paralysed by the impending presidential contest between President Jacques Chirac and his Prime Minister, Mr Lionel Jospin. And the relationship between Paris and Berlin, although institutionally strong, remains soured by France's refusal at the Nice summit in 2000 to allow Germany to increase its representation in the Council of Ministers.

Later this year, Germany and France are expected to clash over the future of the Common Agricultural Policy, with Germany favouring a radical change that would make national governments responsible for farm subsidies. Britain, with its tiny agricultural sector, will back Germany in any such battle.

Mr Schröder is not Mr Blair's only friend in Europe, however, and some of Britain's other alliances are raising eyebrows in Berlin. A week before his initiative with the chancellor, Mr Blair issued a call with Italy's Mr Silvio Berlusconi for a more flexible labour market in Europe. Mr Schröder was having none of it.

"I regard what the two of them said to be wrong for Germany. If Tony Blair thinks the American model is right for Britain and Silvio Berlusconi wants to apply it to Italy, then they should do that in their own countries. I still believe that in Germany we have the right balance between companies' need for flexibility and the need for security on the part of working people. We have no reason to be ashamed in front of the Americans of the German or the European social model. On the contrary, I am confident enough to say that I regard it as superior," he said.

As the convention deliberates over the reform of EU institutions, further differences are likely to emerge between London and Berlin. And once new governments are installed in Paris and Berlin later this year, reports of the end of the Franco-German affair may prove, as so often before, to be premature.