The European Union has removed the last major obstacle to accepting 10 new member-states after its leaders agreed a deal on how to pay for enlargement.
The EU leaders ended a two-day summit in Brussels yesterday, a few minutes ahead of schedule, with a financial package including farm subsidies and structural funds.
The Danish Prime Minister, Mr Anders Fogh Rasmussen, who chaired the meeting, said the agreement cleared the way for final negotiations with the 10 applicants to join the EU in 2004.
"This represents a major step forward towards a historic decision on enlargement, which will be taken at the Copenhagen Summit in December," he said.
The leaders formally endorsed Poland, Hungary, the Czech Republic, Slovakia, Slovenia, Lithuania, Latvia, Estonia, Cyprus and Malta as ready to join the EU in 2004. But the most important agreement was on the future of farm subsidies, which account for the lion's share of the EU budget.
The leaders agreed that direct payments to farmers in current EU member-states would remain stable until 2006. Candidate countries will see direct payments phased in from 2004, starting at 25 per cent of the EU level.
From 2007 until 2013, the growth in direct payments would be capped at 1 per cent a year, likely to be less than the rate of inflation. The agreement followed a deal between France and Germany on Thursday but France's President, Mr Jacques Chirac, and Germany's Chancellor, Mr Gerhard Schröder, offered different interpretations after the summit.
Mr Schröder, whose country bears 25 per cent of the cost of the EU's Common Agricultural Policy (CAP), said the agreement would inevitably lead to a fall in subsidies from 2007. But Mr Chirac stressed that the EU leaders had ruled out any change to the subsidy regime before 2006. He dismissed the importance of a mid-term review of the CAP planned for next year.
"It's out of the question to modify the CAP in 2003. The rules of the game for the Common Agricultural Policy will not be modified until 2006."
The Commission wants a radical overhaul of the CAP that would shift subsidies away from production towards rural development. The leaders agreed that the mid-term review of CAP would go ahead and Commission officials said last night its objectives could still be achieved.
Mr Schröder hailed the summit as a great day for Europe and for Germany and he heralded the restoration of the Franco-German relationship. "The Franco-German relationship is central to Europe's development," he said.
The Polish Prime Minister, Mr Leszek Miller, welcomed the deal as offering the candidate countries time to conduct tough negotiations with the EU. "Now we have at least five weeks for our negotiators, as well as representatives of other candidates, to carry out full-blooded talks," he said.
Candidate countries are unhappy with the phasing-in of farm subsidies over a 10-year period and Hungary's Foreign Minister, Mr Laszlo Kovacs, said that his country would negotiate hard for a better deal.
"In the final accession negotiations, Hungary will continue to strive for a significant shortening of the 10-year transition period," he said.
Before the summit, Mr Rasmussen appeared to be alone among EU leaders in expecting a successful outcome. The leaders yesterday praised Denmark's deft handling of the negotiations.
Final negotiations with the candidate countries are expected to be completed in Copenhagen in December and the 10 prospective member-states will sign accession treaties in Athens next April.