Franco-German pledge on farm aid

Franco-German friendship is at the heart of the EU

The German Chancellor, Gerhard Schroeder, and the French President, Jacques Chirac, have pledged to resolve their countries' differences over farm subsidies by the end of the year.

"We are both convinced we can achieve our goals," Mr Schroeder told a news conference after the leaders' summit on Tuesday in the eastern German city of Schwerin.

Friendship doesn't always mean we have to be of the same opinion

Gerhard Schroeder

France benefits most from EU agricultural subsidies, while Germany is a net contributor. But major reforms are being planned, and the two nations have been at odds over how fast the subsidies should be cut.

The dispute over farm subsidies has threatened to block negotiations on expansion of the European Union, which is due to be finalised at a summit in Copenhagen in December.

Correspondents say it is not possible to see a compromise on subsidies being struck before the German general election in September, but both sides say they will meet informally every four weeks to hammer out a deal.

Mr Schroeder is likely to want to avoid controversy as he heads into September's elections, trailing in opinion polls, correspondents say.

French swing to right

Other issues, including the situation in Afghanistan, were discussed at the Franco-German summit, which was also attended by new French Prime Minister Jean-Pierre Raffarin and the French and German foreign and defence ministers.

France is the biggest winner in current farm policy

The Schwerin summit was the first between the two countries since Mr Chirac's roller-coaster ride back to power in elections earlier this year.

The presidential and parliamentary polls ended with a strong swing to the right, a pattern which Mr Schroeder fears could be about to repeat itself in Germany.

His right-wing challenger, the Bavarian conservative Edmund Stoiber, is ahead in the polls as Mr Schroeder struggles to defend his economic record.

Relations between the two countries, traditionally at the heart of the European Union, have become more strained in recent years.

Divisions

The right-wing French newspaper Figaro compared the two countries to two trains set on a collision course at full speed.

Their positions on farm policy and European reform are "diametrically opposed", it says.

Farm policy remains potentially the most explosive issue.

European Agriculture Commissioner Franz Fischler is attempting a radical overhaul of the Common Agricultural Policy, earning the ire of French farmers.

The timetable for reforms is key, as up to 10 new members, many with poor agricultural sectors, are set to start joining the EU in 2004.

Germany, a net contributor to the CAP, insists that early reforms must be made to avoid crippling costs after expansion.

But France, the CAP's biggest winner, says no changes should come before 2006.

Mr Schroeder has tried to minimise the importance of the clash of opinions.

"Friendship doesn't always mean we have to be of the same opinion," he said.

The summit between the two nations is held twice a year.