Pressure on EU leaders to agree on reform plan

If European Union heads of government were hoping to catch a glimpse of the new Berlin during their two-day summit in the German capital, they are heading for a disappointment. Corralled in the concrete-clad luxury of the Intercontinental Hotel, the leaders can expect a programme of non-stop work, with no entertainment, no sight-seeing and not a single sighting of the east of the city.

So determined is Chancellor Gerhard Schroder that every available moment should be devoted to finding an agreement that he has even cancelled the visit to the Brandenburg Gate, which is an essential part of every official visit to Berlin.

The "family photograph" of the heads of government, which is usually taken against a picturesque backdrop, will be no more than a quick snap in the hotel lobby.

Bordered by a park, a canal and a zoo, the Intercontinental was chosen for the summit because it is so easy to secure. Thousands of extra police started arriving yesterday in Berlin, which sees more political demonstrations each week than many German cities experience in a year.

Three thousand farmers are expected to protest against Agenda 2000 and, with the trial of the PKK leader, Abdullah Ocalan, starting tomorrow, police are expecting Kurdish protests.

Berlin saw some of Europe's most violent protests in the days following Mr Ocalan's arrest and the presence of hundreds of foreign journalists and television crews could encourage more demonstrations this week.

Berliners are unlikely to see much of the EU leaders, who will leave their hotel only once during the summit. This will be for dinner tomorrow evening in the old Prussian parliament building that looks on to the former border between East and West Berlin.

The chefs will not draw up a menu for the dinner until tomorrow morning, when they find out what fruit and vegetables are available in the market.

Mr Schroder says the heads of government must keep a similarly open mind as they attempt to hammer out an agreement on the Agenda 2000 reform package.

Germany insisted yesterday that a number of key issues remained unresolved, including the future of Britain's budget rebate, worth £2 billion sterling. Officials in Bonn yesterday said most EU leaders agreed that the rebate was no longer appropriate and should be abolished.

But Mr Schroder knows that the British Prime Minister, Mr Tony Blair, cannot afford politically to sacrifice the rebate and a compromise is in sight. This would allow Britain to retain the rebate but would change the way it is calculated so that it would become smaller each year.

Mr Schroder's biggest problem is that he is committed to reducing Germany's net contribution to the EU budget, a reduction that becomes less likely with each expensive compromise.

Like most of his fellow leaders, the Chancellor has little appetite for the arcane details of farm subsidies, structural funds and rebates. So he will turn with some relief to the other items on the summit agenda - choosing a Commission president and saving duty free.