Leaders struggle to bridge differences

Demonstrating all too vividly the difficulties of consensus decision-making in large groups, the EU summit late last night laboured…

Demonstrating all too vividly the difficulties of consensus decision-making in large groups, the EU summit late last night laboured mightily to streamline its procedures and treaty and prepare for enlargement. But the French EU Presidency's Minister for European Affairs, Mr Pierre Moscovici, grey-faced with tiredness, last night was, however, able to assure journalists that "the elements of an agreement are on the table". Two steps forward, one step back. The leaders agreed to extend the scope of qualified majority voting to a number of key areas of EU policy, but made reaching a majority even more difficult. They raised the threshold for carrying a vote by qualified majority, and imposed new conditions requiring such a vote to represent a majority of states and 61 per cent of the population of the EU. This is not a simplifying process.

Last night while agreement appeared close on a rebalancing of voting strengths in the Council of Ministers, the heads of government were struggling with two or three controversial policy areas where they hope to extend qualified majority voting (QMV).

A draft text on taxation, still strenuously being resisted by Ireland and the UK, would retain unanimity voting in taxation policy but provides for a vote five years after the treaty comes into force on whether to introduce some degree of QMV into the area. Even such a vague commitment is seen as a foot in the door by the Irish.

Spain was last night blocking majority voting on the allocation of structural and cohesion funding, insisting on retaining its veto until 2013, two more rounds of the EU budget. That prospect is completely anathema to the Germans, the EU's major financial contributor, which is determined to rein in structural spending with the influx of new members. The Presidency compromise would end the veto in this area in 2007.

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France has continued to block QMV in the area of the international trade representation of the EU, fearing it may not be allowed to uphold in the next WTO its film quotas on the domestic market. Last night there were signs of a French softening in draft text which, although it still reserved the film and TV sector to unanimity voting, it sought to relax the veto in the rest of the services sector.

The Commission sees the issue as crucial to its coherence as a trade negotiator.

Ireland's other major concern, its member of the Commission, has been resolved by an agreement to reduce large states' entitlement to one commissioner and limit the growth of the Commission to 27, at which stage a decision will be taken on its eventual size (maximum 26). Automatic rotation would then apply equally to all member states.

The process has not been easy. From prime ministers to officials there has been general bewilderment at the French tactics, and, some said, "bullying", and although last night the prospects of a Treaty of Nice appeared realistic the sense that it has all taken too long and has been too painful is all-pervasive. All too often it appears to have pitched large states against small states to the point that on Saturday 10 small states met as an informal caucus to co-ordinate their strategy on the Commission.

Admittedly it's not easy, as Mr Moscovici warned of tinkering with the delicate balance of a compromise on vote reweighting "it's like a house of cards. You pull out one card and the lot comes down".

Belgium was last night threatening to walk out because it had lost its voting parity with the Netherlands, while an even more mathematically dubious parity, that between Germany and France was retained.

The Poles nearly went ballistic when a first draft of the reweighting left them with two less votes than the Spanish. The rectification of the "error" put Spanish noses out of joint - although they have virtually identical populations, the Spanish claimed they alone were losing a commissioner.

But it is not just enough to get a deal here. There are a number of hurdles to ratification, not least of which is a deeply disappointed European Parliament. Although MEPs are only entitled to a consultative vote on the treaty, both the Italian and Belgian parliaments have said they will take Parliament's view into account in their own decision on ratification.

Yesterday the Parliament's two representatives on the IGC expressed considerable anger at what they saw as a failure of political will. The German Christian Democrat, Mr Elmer Brok, a veteran of the Amsterdam negotiations, warned that some provisions in the new deal actually set EU decision-making back to pre-Maastricht days and that it could be difficult to get Parliament approval.

A Parliament rejection, he noted pointedly, could be a matter of some political difficulty to those who need referendum approval for the treaty.

Mr Brok particularly cited the determination of the leaders to raise the threshold for a qualified majority, in effect setting back the process of making decisions in all the areas where majority voting already applies.

The decision to raise the voting threshold for qualified majority voting was the biggest setback of the summit, the Finnish ambassador to the EU, Mr Antii Satuli, said. Not so, said the spokesman for the British Prime Minister, Mr Alastair Campbell. He said the threshold should rise - "that's what we want".

The summit, in response to the Austrian crisis, also agreed a procedure for dealing with member states which appear to be abandoning fundamental democratic values. At the request of a third of member states, or the European parliament, or the Commission the Council of Ministers will be able to fire a warning shot across the offending state's bow by warning it of potential sanctions. To do so a vote must be carried by nine-tenths of the Council.