Europe's big powers block drive to federal superstate

A Franco-German blueprint for a European Union with two presidents gained support yesterday when Britain, Spain and Denmark all threw their weight behind it.

The proposals, agreed by the French President, Jacques Chirac, and the German Chancellor, Gerhard Schröder, over dinner at the Elysée on Tuesday night, are seen as a victory for those who want to entrench EU powers within member states and a defeat for advocates of a federal Europe.

But several smaller, more federal-minded countries, including the Netherlands, Belgium and Finland, were suspicious of the Franco- German package, fearing it would allow the big member states to ride roughshod over their interests.

With the EU expected to expand next year to 25 member states, most countries agree the current system, under which the presidency rotates every six months among the member states, will become unworkable.

Under the proposals, the EU would gain a new president of the Council of Ministers, representing governments of member states, who would serve for between two and a half and five years and would be selected by a majority vote of leaders of national governments. This idea has been championed by France, Britain, Italy and Spain.

In a trade-off, German demands for strengthening the European Commission were accommodated by a pledge for the Commission's president to be elected by MEPs.

While Britain was sceptical about this move to increase the authority of the Commission's president, ministers said it would be a small price to pay to ensure a president of the European Council. Jack Straw, the Foreign Secretary, said: "This is a proposal which will command very wide support." Crucially for Britain, France fought off a call from Joschka Fischer, the German Foreign Minister, for one person to combine both presidencies. That idea was described by Denis MacShane, Britain's Europe minister, as a plan for a new "Kaiser". Nevertheless the Franco-German plan does give some cause for concern in London. Paris and Berlin want to decide foreign policy issues by majority voting, except for defence matters or subjects of vital national interest.

They also agreed on the need for a single minister of foreign affairs, combining the posts held by Chris Patten, the commissioner for external relations, and Javier Solana, the foreign policy representative.

Mr Chirac admitted that the two nations had overcome big difficulties to agree on the future architecture of the EU. "There was a real problem," the French President said. "The German and French visions were not exactly the same." But he added: "We have proved the Franco-German motor, which is so important for European integration, works well."

Last night, the text was being finalised before being sent to Valéry Giscard d'Estaing, the former French president chairing the convention on the future of Europe.

In the Netherlands, the Foreign Ministry said the government was "in favour of the president of the European Commission being elected by the European Parliament but against another president being picked from among government leaders". But Jose Maria Aznar, the Spanish Prime Minister, and Anders Fogh Rasmussen, his Danish counterpart, were supportive.

One of the biggest questions is whether the system would work. Critics of the agreement say the powers of the two presidents will have to be tightly defined to avoid duplication, rivalry and conflict.