French President Nicolas Sarkozy said today he and British prime minister Tony Blair had struck a deal on reforming the EU's institutions while Germany reported progress towards a treaty.
Mr Sarkozy has been pushing for a simplified treaty, which countries could ratify without consulting voters, to streamline decision-making in the European Union after French and Dutch voters rejected a European constitution in referendums in 2005.
"Tony Blair and I have just agreed on what might be the framework for a simplified treaty. That is quite something," Mr Sarkozy told reporters after meeting Mr Blair on the sidelines of the G8 meeting in Heiligendamm, Germany.
"We agreed that it should be a new treaty and not a small constitution," said Mr Sarkozy.
In Brussels, German Foreign Minister Frank-Walter Steinmeier told the European Parliament EU member states had narrowed their differences over a new treaty, raising hopes a deal would be reached at an EU summit on June 21s-22nd.
"The number of open questions has been substantially reduced," said Mr Steinmeier.
Germany, which holds the EU's six-month rotating presidency, hopes to clinch a preliminary deal at the summit. The EU's 27 members committed themselves in March to trying to secure a final agreement on the treaty by the end of this year.
The aim is to overhaul the union's institutions and make the bloc more efficient following its rapid enlargement.
Mr Sarkozy advocated adopting a "mini-treaty" last year, before he was elected president, but has since replaced this term with "simplified treaty" to placate the 18 EU states that have ratified the constitution.
Diplomats say that under the emerging accord, the EU would have the long-term president and foreign minister envisaged under the constitution but probably with different titles.
It would have a streamlined, more democratic decision-making system but none of the trappings of statehood, they say.
Poland wants changes to the voting system envisaged under the draft constitution and agreed by other EU members. Britain wants the constitution's charter of fundamental rights excluded, but Germany and others want a clause giving it legal force.
Mr Sarkozy told reporters he had agreed with Blair on how to tackle the fundamental rights issue but did not go into details.
"We discussed the text on fundamental rights and we found a solution," said Mr Sarkozy, adding it was important to overhaul decision-making in the bloc.
"I told the French people that we can't stay put with a Europe that is motionless, we can't stay with a Europe that is blocked, we can't stay with a Europe that does not have institutions," he said.