Mon, Jan 02, 2006 - Page 6 News List

Austria faces uphill battle as it takes on EU presidency

HANDOVER The UK can claim credit for reaching a deal on the EU budget, but Austria now faces the difficult task of renewing talks on a constitution


Britain handed over the EU's leadership to Austria yesterday, trumpeting success after six months at the helm, but Vienna faces an uphill battle to help get the embattled bloc back on track.

British Prime Minister Tony Blair can claim credit notably for clinching a budget deal at an EU summit last month, as well launching entry negotiations with Turkey after overcoming fierce divisions within the 25-nation club.

But Austrian Chancellor Wolfgang Schuessel, while relieved that the EU's 2007-2013 funding plans are finally agreed, faces a much bigger problem before handing the EU reins to Finland in July: the all-but-dead EU constitution.

The half-century-old EU was plunged into unprecedented crisis last June after French and then Dutch voters rejected the institutional blueprint, which had been designed to prevent decision-making gridlock in the expanding bloc.

Blair took over the EU only weeks later on July 1, with expectations low amid the deep sense of gloom triggered by the double referendum snub by two of the EU's founder states.

But the British leader insisted the crisis should be seen as an opportunity, saying it underlined the need for fundamental economic reform to drag Europe out of its economic doldrums, and reconnect the EU with ordinary citizens.

While there are few immediate signs of progress on the reform front, Blair surprised some observers by securing a last-minute deal in October to start EU entry talks with vast mostly-Muslim Turkey.

In other, less high-profile successes, the British EU presidency hammered out a deal to toughen up rules covering the chemicals industry, while pushing through reform of sugar pricing, long sought by developing countries.

But the biggest achievement had to wait until last, when Blair's surrender of part of London's long-prized EU rebate secured a last-ditch EU budget deal, avoiding the threat of funding gridlock to add to the institutional paralysis.

There were huge sighs of relief all round, but with that deal done attention will inevitably return to the more fundamental question of the constitution.

Schuessel -- who only six years ago was put in the EU deep freeze after forming a coalition with Joerg Haider's far-right Freedom Party -- has pledged that the revival of Europe will be his main priority over the next six months.

The Austrian leader has promised to come up with "further proposals" for the future of the European constitution, to be discussed at a June summit ending his small country's turn at the EU tiller.

But few expect any real breakthrough until at least next year, after presidential elections in France which could in theory change the political dynamic there.

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