Austria plans referendum in effort to get EU diplomatic boycott lifted

Austria's right-wing government meets today to plan a referendum on the country's relationship with the rest of the European Union amid hints that Vienna could block EU reforms unless sanctions against it are lifted. The Chancellor, Dr Wolfgang Schussel, said in Stuttgart yesterday that Austria supported enlarging the EU to include new member-states from central and eastern Europe but that the diplomatic boycott of his country must end first.

"The tensions within the European family must be removed first before an enlargement. Austria sees the expansion as a historic chance. But before that, the institutional and political preconditions have to be met," he said.

Austria's 14 EU partners agreed last week that three "wise men", to be nominated by the President of the European Court of Human Rights, should make a report on the right-wing government's commitment to European values. Apart from monitoring the treatment of minorities, immigrants and asylum-seekers, the team will assess the "political nature" of Dr Schussel's junior coalition partners in the far-right Freedom Party.

The 14 member-states imposed diplomatic sanctions against Austria six months ago in protest against the presence in the new government of the Freedom Party, which campaigned on an openly xenophobic platform.

Hopes that a favourable report by the "wise men" could prompt the sanctions to be lifted as early as September received a blow at the weekend when the French Prime Minister, Mr Lionel Jospin, predicted that there would be no change during France's EU Presidency.

Mr Jospin's intervention inspired a sharp rebuke from the former Freedom Party leader, Dr Jorg Haider, who threatened that Austria would bring the current Inter-Governmental Conference on EU reform to a standstill.

"The EU will have itself to blame if enlargement and reform come to a standstill," he said, adding that Austria could do without the EU summit planned for Nice in December.

The government is unlikely to agree on the wording of its proposed referendum today but it will probably decide on its subject matter, which has been a source of some confusion. Dr Schussel's pro-EU People's Party is eager to balance a condemnation of the sanctions with an expression of Austria's commitment to EU membership, enlargement and reform.

One option under discussion is to propose a new system for disciplining errant EU memberstates that would require action to be taken by the EU as a whole, as opposed to a group of individual member-states. But the Freedom Party, paying the political price for the new government's harsh economic policies, may press for a more populist formula that would capitalise on popular outrage at the sanctions.