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Page last updated at 09:23 GMT, Thursday, 16 October 2008 10:23 UK

EU set to backtrack on emissions

French President Nicolas Sarkozy (left) with European Commission President Jose Manuel Barroso in Brussels
President Sarkozy says he will keep working on the climate plan

EU leaders look set to give way to demands to water down the bloc's ambitious climate change plans.

Countries like Poland and Italy have threatened to block a package agreed last year for deep EU-wide cuts in greenhouse gas emissions.

But, on the final day of a summit in Brussels, leaders were preparing to reword the pact, giving "regard to each member state's specific situation".

The split over climate change contrasts with the unity over the banking crisis.

All 27 EU states broadly support the bank rescue plan proposed for the bloc and the holding of a world finance summit, France's President Nicolas Sarkozy said in Brussels.

Mark Mardell

For those who want the European Union to walk with power and purpose on the world stage this summit is both triumph and tragedy
BBC's Mark Mardell in his blog

Eurozone leaders agreed at the weekend on a comprehensive package designed to shore up banks, including making more than a 1,000bn euros ($1,366bn) available for interbank loans.

Mr Sarkozy said the EU wanted to launch "a new Bretton Woods summit" in November, referring to the 1944 meeting which led to the creation of the International Monetary Fund and other global institutions.

Other G8 industrialised nations have also signed up to the summit.

"The whole of Europe, without exception, approves the measures adopted on Sunday in Paris," Mr Sarkozy said.

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But he added that EU states had not yet reached a definitive agreement on the text of a new banking agreement.

Other financial measures under consideration included a rapid-reaction "crisis cell" that would swing into action at the first sign of crisis, and a co-ordinated European financial supervision system.

'Not giving up'

On climate change, however, the financial crisis has persuaded some countries that they cannot afford to enforce tough emissions targets on their industrial sector.

A draft declaration from the summit, seen by the BBC, says a climate package should be adopted in a "cost-effective manner... having regard to each member state's specific situation".

With a recession looming, Italy and Poland have threatened to block the package, agreed last year, that would have forced EU countries to cut greenhouse gas emissions by 20% by 2020, compared to 1990 levels, and to derive 20% of energy from renewable sources.

Our businesses are in absolutely no position at the moment to absorb the costs
Silvio Berlusconi,
Italian prime minister

Eastern and central European countries are unhappy at the burden of cuts they will be expected to bear under the existing agreement.

They argue that a legacy of inefficient and coal-dependent industry, dating from the Soviet era, has made it much harder for them to achieve big emissions cuts.

Polish Foreign Minister Radoslaw Sikorski said: "Poland is ready to introduce a veto if there will be attempts to force us to achieve an agreement."

Italian Prime Minister Silvio Berlusconi has sided with the eastern and central Europeans, saying: "Our businesses are in absolutely no position at the moment to absorb the costs of the regulations that have been proposed."

Mr Sarkozy said he was pushing hard for an agreement on climate change and energy action by the end of the year.

"I'm not giving up on the timetable," said Mr Sarkozy. "We'll strive to find a good compromise within two and a half months."

In other summit business, talks on a new EU-Russia partnership treaty were postponed, amid continuing concern about Russia's military presence in Georgia. There were divisions about when to resume them.

A decision to revive the failed Lisbon treaty, meant to give the EU more stable institutions in difficult times, is expected to be put on the back-burner until December.

Irish Prime Minister Brian Cowen promised to come up with an action plan by then on the best way to move ahead next year.


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