Schussel playing hardball as efforts to end pariah status come to a head

Nature, and the international press corps, abhor vacuums

Nature, and the international press corps, abhor vacuums. So the meagre fare on offer to journalists at the Feira summit today and tomorrow will be supplemented with a dose of two over-inflated stories - Austria and tax - about whose course, in truth, there is little doubt.

Will the leaders of the 14 devise an exit strategy to steer Austria from its pariah status? And will the 15 break the seemingly intractable three-year deadlock over the savings tax directive aimed at ending tax avoidance through overseas accounts? The answer on both counts is, almost certainly, no.

The Portuguese foreign minister, Mr Jaime Gama, anxious to save his country's final moments in the presidency from headlines about unseemly rows, has warned Austria to co-operate if it wanted to end the bilateral sanctions imposed over the far-right Freedom Party's presence in government.

But the Austrians have not been willing to suffer in silence. Apart from hinting they might use their veto to prevent the Inter-Governmental Conference from finishing in December, Chancellor Wolfgang Schussel made it clear on Friday he intends to use the Feira platform to rattle the cage.

READ MORE

Mr Schussel said he was open to all propositions that would end the freeze in bilateral political relations, except those representing an imposition of political will on Austria. He said he expects the "beginning of the end" of EU sanctions before this presidency ends on June 30th.

The "beginning of the end" would be a formula which set out a specific democracy test for Austria, assessable perhaps by the Commission, which would allow leaders to come back in a few months and say without loss of face that their fears had been allayed and their "resolute" action had achieved its purpose. But the French European Affairs Minister, Mr Pierre Moscovici, has told this correspondent he does not expect the bilateral sanctions to end before December.

On Friday, however, the President of the Commission, Mr Romano Prodi, said that although "the Commission had no mediation role . . . if the heads of state ask for an analysis of the Austrian situation, the Commission is prepared to do so quickly, because it has followed the Austrian case closely".

An informal group of six or seven states, including Ireland, is quietly pressing for progress on the issue. And many of the same group are concerned about the decision that will certainly be taken here to include consideration of easing the Amsterdam Treaty's flexibility provisions on the agenda of the treaty-changing IGC.

Flexibility, better known as reinforced co-operation, allows groups of member-states to collaborate on projects that a minority do not want to participate in. The easing of the treaty's complex provisions is seen by some countries as an important way of circumventing the decision-making logjams that an enlarged Union of up to 30 will produce.

That such changes might facilitate the emergence of a two-tier EU with an inner core in charge of the agenda has led to expressions of concern about equality of treatment of member-states that have seen smaller member-states, including Ireland and the Nordics, empathise with the Austrians.

The summit will also hear progress reports on the IGC and a Charter for Fundamental Rights, as well as on preparing an EU rapid reaction force capability. On the latter issues, the question of whether treaty changes will be needed is important to Ireland, but has been formally deferred to the French presidency, who believe that neither will have treaty implications.

But the charter has become a cause celebre in Britain, with the Tories painting it as a proto-constitutional document of extraordinary scope, and Prime Minister Tony Blair may ask fellow leaders to make clear it will only be a political declaration without legal effect.

Germany, Italy and the Benelux countries would, however, like to see it incorporated in the treaty. The summit will also see reports on progress since the Lisbon summit on issues such as e-commerce and the reform of Europe's economy.