Merkel seen as key to EU summit success

Time of article published Dec 14, 2005

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By Noah Barkin

Berlin - German Chancellor Angela Merkel took office in November vowing closer ties with Britain, a less exclusive relationship with France and more consideration for new eastern EU states. Now those promises are set to be tested.

Merkel joins other leaders in Brussels on Thursday for her first European Union summit since taking over from Gerhard Schroeder.

At stake is a long-term budget for the bloc and the EU's credibility following a string of damaging setbacks.

Chances for an agreement appear low, with a new budget proposal from the British presidency on Wednesday offering only modest tweaks to an initial blueprint that was widely denounced by fellow EU members.

But amid the pre-summit manoeuvring and rhetorical jousting, experts say Merkel's presence in Brussels could bolster prospects for a compromise.

"The chances of reaching a deal at this meeting are less than 50 percent," said Ulrike Guerot, senior fellow at the German Marshall Fund in Berlin.

"Having Merkel there may make a difference. The new German government has created a sort of tabula rasa effect."

Merkel's predecessor Schroeder came to power in 1998 also promising a cosier relationship with Britain.

But he ended up forging a tight alliance with French President Jacques Chirac, frequently ganging up with him against British Prime Minister Tony Blair.

A 2002 deal, pushed through by Chirac and Schroeder, that fixed EU agricultural spending levels out to 2013 is at the heart of the current budget impasse, with Britain insisting it be reviewed before it expires.

Britain has said without such a review, it will not discuss the cut in its EU rebate that France and others are demanding.

No one expects Merkel, 51, to abandon the French and throw her weight behind Britain in Brussels.

The coalition agreement struck last month between her conservatives and their governing partners, the Social Democrats, states that the 2002 agricultural agreement should "not be called into question".

But Merkel, whose low-key, analytical style vaulted her against the odds to the top of Germany's leading conservative party and then into the Chancellery, may be in a unique position to mediate between the warring sides.

In her three weeks in office she has worked the phones doggedly and met personally with the leaders of Britain, France, Belgium, the Czech Republic, the Netherlands, Denmark and Poland, nudging each towards a compromise.

"She knows how important atmosphere is," a senior adviser to Merkel said. "For example, she has urged Chirac to tone down his rhetoric so as not to hurt Blair and the prospects for a deal."

And yet Merkel heads into the summit with her allegiances still murky and undefined.

She is in everyone's camp and no one's camp and that puts her in a far better position than her predecessor to nudge the British, French and eastern states towards a deal, analysts say.

"Merkel can seize this opportunity," said Hugo Brady, a research fellow at Centre for European Reform in London. "She is the key personality at this summit."

The last two long-term EU budgets were clinched only after Germany made big concessions and Merkel's first priority is to ensure that does not happen again. Under pressure to consolidate the German budget deficit, she has vowed that German payments will not exceed 1 percent of gross national income.

Merkel, who grew up in communist East Germany, is also expected to defend the interests of EU newcomers who are keen get their fair share of regional funds. Accomplishing these goals while pushing Blair and Chirac closer together will be her big challenge in Brussels.

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