Britain and Ireland thank God they are surrounded by water

NOTHING is more basic to the nation state than the definition and protection of its borders. Borders mean more than frontier posts, and guarding them against undesirable aliens and criminals: far more complex is the enunciation of rules governing who can cross them and how, and, when they do, what rights they will have.

Should the citizens of friendly states have more rights than others? Should they require visas or passports? Can we trust a neighbour's justice system sufficiently to agree to enforce their court's decisions or hand over our citizens for trial?

And when states come together as a union, can they agree to pool their sovereignty over these sensitive issues to take a collective view and create common instruments of enforcement? Or does this touch on such fundamental principles of sovereignty that the best that can be hoped for is close collaboration?

The problem is central to the attempts at Amsterdam next Monday and Tuesday to reform the EU treaty. It poses the key challenge to agreement in an as yet unresolved row which pits Britain and Ireland firmly against the other 13.

Until Amsterdam, unanimous agreement could not be achieved to move collaboration in justice and home affairs (JHA) from the realm of veto voting or to accept a significant role in the area for the Commission, Parliament or European Court. JHA has been firmly rooted in the so-called Third Pillar, while "community" decision-making by qualified majority only applied to First Pillar issues such as the single market for goods and services.

Unable to break the veto gridlock but determined to gradually implement the treaty's commitment to free movement of people, six states established outside the treaty an agreement at Schengen to do away with internal frontier controls currently 13 member-states have signed up to it. Now they are determined to bring Schengen into the treaty complete with its 2,000 pages of agreements on "flanking measures" (specific minimum requirements for participation such as linked computer databases and police and customs co-operation).

The problem is Britain's insistence that it must maintain control over its own borders and the knock-on Irish desire to maintain its common travel area with its neighbour. If Schengen is to be incorporated in the Union framework an opt-out has to be devised for the two countries.

The principle of opt-outs is reluctantly accepted by the 13, but agreement on how the two treaties will be merged is still a problem. Ireland and Britain are insisting that, although they cannot accept the ending of passport controls on their borders they want to sign up to as much as possible of the flanking measures to strengthen the common fight against crime.

What they cannot accept is that any single state would be able to veto such a partial opt-in. After all, they argue, the EU's institutions are the property of all 15.

The Dutch presidency now appears ready to accept a compromise - their opt-in could only be blocked if a qualified majority of the 13 voted to do so but this solution, which Ireland can just about live with, is not acceptable yet to Spain or Belgium.

Even if a deal can be done here, however, there is still the vexed issue of the continued British refusal - with Denmark - to allow some JHA issues to be moved to the First Pillar for community decision-making. Thirteen states are willing to accept some majority voting and a role for the EU institutions over free movement issues, asylum, immigration, and the control of the Union's external frontiers.

Britain, however, is hinting at its willingness to do a deal on the issue - either by extending community methods to the Third Pillar, "communitisation", or by allowing these policy issues into the First Pillar but with another British opt-out.

Both solutions are still unpalatable to the majority and resolution of this conundrum is undoubtedly the greatest challenge to summit negotiators.

The issue is likely to dominate, the discussions but not the spin put on by heads of government afterwards. Their fanfares will herald "huge advances" the summit will make in the common struggle against crime, particularly drugs, terrorism, and the abduction of children - in reality the putting into the treaty, agreements reached in Dublin to beef up voluntary police and judicial co-operation. All strictly Third Pillar, intergovernmental.

It is also likely that the Germans will want to press, unsuccessfully, to extend the rem it of Europol, the Union's criminal intelligence co-ordination centre based in The Hague. At present the organisation acts purely as a link between autonomous police forces, but Chancellor Kohl would like to see it have a full operational role, evolving towards a European FBI.

The idea has been backed by the Taoiseach but is highly controversial in Britain, where politicians fear tabloid horror stories of "jackbooted" German policemen breaking down doors in suburban Basildon.

The new treaty will also enhance the Union's commitment to democratic values and the rule of law. It makes provision for the suspension of some of the membership rights of states by a heads of government summit if it deems that a state has been involved in "a serious and persistent breach" of such principles.

The measure is seen largely as a precautionary move ahead of enlargement involving states whose democratic credentials may yet have to.be fully established.

The Union will be empowered to take action to combat discrimination "based on sex, racial or ethnic origin, religion and belief, age or sexual orientation".

The treaty will provide for conventions to come into force in states which have ratified them once they have also been adopted by half the members.

Tomorrow: The citizen, jobs and Social Europe.