Climate plan at stake as EU meets

Some EU countries want auctions of pollution permits delayed

EU leaders are about to gather for a summit in Brussels that is being billed as a credibility test for Europe on its willingness to tackle climate change.

At stake at the two-day meeting is a plan to cut the EU's carbon pollution by 20% while raising renewable sources to 20% of total energy use by 2020.

With the economic downturn, Germany, Italy and Poland, among others, are fighting any deal that could cost jobs.

Also up for discussion is a $260bn (£175bn) economic stimulus plan.

With recession looming, there will be broad agreement on the EU-wide package to boost the economy, although Germany opposes calls from Britain and France to cut taxes, says the BBC's Oana Lungescu in Brussels.

The summit should also pave the way for Ireland to hold another referendum on the Lisbon treaty of EU institutional reform that its voters rejected in June, says our correspondent.

Differences among EU nations could dilute or thwart a climate change accord, however.

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The "20-20-20" package, which also requires approval by the European Parliament to become law, commits the 27-nation EU to cutting carbon dioxide (CO2) emissions by 20% by 2020, compared to 1990 levels.

If a global, binding deal is reached on CO2 cuts, the EU target will be 30%.

French President Nicolas Sarkozy is pushing hard to clinch a deal before he hands over the rotating presidency of the EU to the Czech Republic at the end of the year.

"It is a question of credibility," said European Commission President Jose Manuel Barroso on Tuesday.

"It would be a real mistake for Europe to give the signal that we are watering down our position, after all these years leading the efforts for a global solution."

He described the summit as "perhaps the most crucial European Council in recent years... and the most important in which I have participated as Commission president".

Employment worries

Germany and Italy have expressed concern that their industries could be put at an international disadvantage if the CO2 targets are too ambitious.

"If I see that Italian interests will be hurt in an excessive way, I will use our veto rights," said Italian Prime Minister Silvio Berlusconi on Wednesday.

"There will be no climate decisions that will endanger German jobs or investments. I will take care of that," said German Chancellor Angela Merkel.

Also at issue is how and when to implement the climate package. The plan would see the full auctioning of CO2 emission permits for the EU's big power plants by 2013.

Poland and eight other coal-reliant former Soviet bloc nations want that date pushed back to 2019.