Schroder calls for faster EU integration

THE GERMAN CHANCELLOR, Gerhard Schroder, backed moves to quicken the pace of European integration yesterday, but shied away from endorsing fully fledged political union, which had been outlined by his Foreign Minister, Joschka Fischer.

On his first official visit to the European Commission, Mr Schroder said a "unified Europe which does not stop at Germany's eastern border is a vision to which we all feel committed". His comments struck a different tone from those of Mr Fischer, underlining the deep divisions over Europe that have emerged at the top of the government during the last week.

That has caused concern in Brussels, not just because of Germany's central role in Europe, but because it takes over the presidency of the European Union in January. It has also provoked a vivid reaction among British Eurosceptics, complicating Tony Blair's task of edging Britain closer to the European mainstream.

Last Wednesday, Mr Fischer reignited the debate about the direction of Europe by calling for full political union, including a European army. His proposals caused consternation among diplomats.

In a newspaper interview, Mr Fischer said that when "full union" took place, foreign and security policy would become a community matter. "Just as we worked together on the first real transfer of sovereignty in the field of currencies, we ought to work on a common constitution to turn the European Union into an entity under international law."

Controversial comments from Mr Fischer, to the effect that Nato should abandon its first-strike capacity, were also disowned by other senior German government figures. During a visit to Washington, the Defence Minister, Rudolf Scharping, assured the United States Secretary of Defense, William Cohen, that Germany would continue to support Nato's first-strike policy.

Meanwhile, Oskar Lafontaine, the Finance Minister, provoked alarm among central bankers with calls for cuts in interest rates, job creation and tax harmonisation across Europe. A promise to put tax harmonisation high on the agenda provoked threats of a veto from the British Chancellor.

The disarray reflects the nature of Mr Schroder's coalition with the Greens. In Brussels diplomats believe it will be months before the shape of new government can be judged properly: "It still hasn't crystallised", said one. "It is fine to talk vaguely about visions, but what matters is the decisions they take."