European states split over budgetary rules

EU foreign ministers failed to resolve a key dispute over budget rules today, adding to the burden facing their leaders who meet…

EU foreign ministers failed to resolve a key dispute over budget rules today, adding to the burden facing their leaders who meet at the end of the week for a make-or-break summit on the bloc's constitution.

Diplomats said The Netherlands, Austria, Belgium and Luxembourg insisted that the executive European Commission must have powers to enforce budget discipline, as proposed in the draft constitution drawn up by EU lawmakers last year.

But Germany and France, whose excessive deficits have dismayed smaller EU member states, said plans for the Commission to have more clout must be rolled back.

"We have to fight to the bitter end for our position," Dutch Foreign Minister Mr Bernard Bot said after he and his counterparts punted the thorny issue to the 25-nation bloc's leaders to handle at a Thursday-Friday summit in Brussels.

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The constitutional treaty, in preparation since early 2002, is designed to make the EU run more smoothly following its enlargement to 25 members from 15 last month.

The need to overhaul EU institutions, seen by many of the bloc's 450 million citizens as remote and irrelevant, was underlined at the weekend by a record low turnout in European Parliament elections.

"One clear message is that voters across Europe . . . want a European Union that works better in their interests," British Foreign Secretary Mr Jack Straw told reporters in Luxembourg.

European voters delivered a massive vote of no confidence in most serving governments, setbacks Polish Foreign Minister Wlodzimierz Cimoszewicz said would make it even harder for leaders to make concessions on the constitution at the summit.