Divided Europe on show at summit

By William Horsley
BBC European Affairs Correspondent

The coming together of EU leaders was no resounding success

The "globalisation" European summit at Hampton Court in the UK was seen in parts of Europe as a setback or a non-event.

Elsewhere, it was seen as mending fences broken in recent feuds, and improving the chances of an early deal on the EU's long-term budget.

A vice-president of the European Commission, Guenter Verheugen, cast doubt on the results, telling Bavarian Radio in Germany that some messages from the summit took Europe in the "wrong direction".

His job is to push through a sweeping programme of liberalising reforms to revive Europe's economy.

Commission President Jose Manuel Barroso has hailed the summit as a success, which put Europe back on track to meet the challenge of globalisation.

But outgoing German Chancellor, Gerhard Schroeder - still in office until his more reformist successor Angela Merkel is installed next month - spoiled the party by damning the idea of a liberal free market in Europe as a Trojan horse that would undermine workers' rights and living standards.

Deep confusion

The most sensational news was made by French President Jacques Chirac. He said that keeping Europe's high farm subsidies for the next eight years were a "red line" for France.

And his threat to block a global deal to liberalise world trade at next month's ministerial meeting in Hong Kong made the EU informal summit into headlines around the world - for the wrong reasons.

It showed what is at stake in Europe's effort to get fit to compete in a harsher world

German conservative newspaper Die Welt summed up the underlying problem: these open divisions show Europe is "drifting further apart", it says.

More positive reactions came from Danish Prime Minister Anders Fogh Rasmussen. He said the friendly atmosphere of the meeting in Hampton Court's historic setting had mended damage done by the bruising row at the last EU summit in June.

And Swedish Prime Minister Goeran Persson told the BBC he detected signs of a will to compromise, with the UK offering to adjust its special EU budget rebate and others also ready to make the needed "sacrifices". A full budget accord in December could yet be reached by the end of this year, he said.

Europe's media reflect the deep confusion at the summit itself about what, if anything, was agreed.

The leaders gave conflicting verdicts on the plan for a new 10bn euro (£6.8bn) "globalisation fund" to re-train European workers whose jobs had been lost through outside competition.

Future challenge

The long-standing plan to liberalise services of all kinds throughout the EU would, expert say, boost Europe's economy and perhaps end years of near stagnant growth in some parts. But it is currently stalled thanks to opposition, again led by France.

The UK and Tony Blair has two months left holding EU presidency

At Hampton Court, European leaders were given several scholarly background studies, to underline the urgent need to reform.

The papers showed Europe facing the risk of decline because of its ageing population, declining share of world output and rigid labour rules. Yet the leaders present came up with remedies just as different as their economies are.

The pessimistic mood was caught by the Hungarian newspaper, Nepszabadsag. It said that in the current global race for efficiency the EU "can only glimpse the back of the USA with binoculars, while its own back is being burnt by the hot breath of China and India".

The overall verdict: the summit was no resounding success. But for those who have eyes to see, it showed what is at stake in Europe's effort to get fit to compete in a harsher world.