At a glance: Summit agenda

By European affairs analyst Tamsin Smith in Santa Maria da Feira

The Portuguese have a saying about their cities: "Lisbon plays, Braga prays and Porto works".

Some delegates will have a chance to chat in a castle overlooking the town

European leaders will be hoping that the Porto ethic of hard graft, with maybe a prayer or two thrown in for good measure, will be on the agenda when they gather in the nearby town of Santa Maria da Feira for the summit which ends Portugal's EU presidency.

Santa Maria da Feira is named after the prosperous fairs held monthly since the 12th century. EU leaders are arriving here nine centuries later, with dreams of a successful single currency and high hopes for European prosperity.

But the atmosphere is still soured by the sanctions imposed on Austria by the other 14 member states, and there are several sets of difficult negotiations in progress on further moves towards European intengration. The main issues under discussion:

Austria
Austria is still under the bilateral sanctions imposed by 14 EU countries last February because of the presence in the government of the far-right Freedom Party. Although the sanctions are not officially on the summit agenda, Austria is calling for the measures to be loosened before the French take over the rotating presidency, fearing France would take an even tougher line. If Austria remains ostracised, it will call a national referendum in the autumn and could threaten to stall EU decision making. Some European Union countries would like to lift the sanctions, but others, including, especially France but also Germany and the UK see no reason to make any move now.

Institutional refoms
There will be big talk to match big visions as Europe's leaders take stock of their efforts to agree the institutional reforms unsnappily known as the Intergovernmental Conference. The IGC reforms are essential to ensure EU decision-making is not paralysed when the club is opened to new countries in the next few years. The next crucial phase of progress - addressing sensitive issues like national vetoes and re-weighting of votes - is to be refereed by the French who assume the rotating EU presidency from July. The goal is to secure agreement and a shiny new EU Treaty at the December summit in Nice.

'Enhanced cooperation'
The question on everyone's lips is whether the IGC agenda should include a mechanism for groups of EU countries to forge ahead and integrate faster than others. This concept of "enhanced co-operation", a Franco-German darling, would create a two-speed Europe sparking British concern that it will be left in the slow lane. This is already happening as France outlines plans to beef up the role of the Euro-11 finance ministers.

Charter of Fundamental Rights
The controversial Charter of Fundamental Rights will be chewed over endlessly at the summit. For some it leaves a sour taste in the mouth. UK Prime Minister Tony Blair is expected to underline concerns that the Charter should be non-binding amid fears that an embryo constitution for a federal Europe could sprout from it.

Franco-German relationship
The romantic castle on a wooded hill, towering above the town of Feira could be a perfect spot for France and Germany to rekindle their relationship after recent weekend flings in Rambouillet and Mainz. After much speculation that the Franco-German pulse at the heart of Europe had weakened, a bold relaunch of debate has spiced up the old couple.

Defence and security

Secret tunnels within the Castelo da Feira are designed to keep intruders out but EU leaders will be lowering the drawbridge to make significant progress on the issue of Europe's defence and security policy. A programme to formalise EU-Nato relations and enable the EU to use Nato assets will be agreed at the summit. EU leaders will still have to put their money where their mouths were last December at the Helsinki summit when they pledged to create a rapid reaction force of up to 60,000 peacekeepers by 2003.

A civil "Eurocop" force will also be discussed. This could send 1,000 police officers out to trouble spots like East Timor or Kosovo at a month's notice.

Tax
At the Feira summit, leaders may be disappointed to see any chance of compromise on savings taxation receding. Anticipated intransigence on the part of UK Chancellor Gordon Brown on the issue of withholding tax may send the architects of the whole proposal scuttling back to their drawing boards.

Greece
The Feira summit will give Greece its admission ticket to the Euro zone

IT
The summit hopes to build on the March 'dot.com' Lisbon summit to close the IT gap between Europe and the United States.