At a glance: Summit decisions

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".

The summit took place in a castle overlooking the town

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

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

But the atmosphere was soured by the sanctions imposed on Austria by the other 14 member states, and there were several sets of difficult negotiations in progress on further moves towards European integration. The main issues decided were:

Austria
The position on Austria remains unchanged. Commission President Romano Prodi indicated that if would be inappropriate for the Austrians to hold a national referendum on their quarantine status. The Portuguese Prime Minister and president of the EU Council said Austria should seek to be part of the solution, and not part of the problem. The ball is still in Portugal´s court to resolve the Austrian impasse by the end of June when France takes over the rotating presidency.

Institutional refoms
There was agreement to include the concept of enhanced co-operation on the IGC agenda. The Feira summit has been a progress report on the steps made so far. There has been some shadow boxing around the complex issues of institutional reforms, but wait for the Biarritz summit in October for the gloves to come off. The pressure will mount over the next six months to agree the reforms. There is some scepticism over whether they will be tough enough and whether this will affect the timetable for enlargement.

Charter of Fundamental Rights
European Commission President Romano Prodi announced that the charter is moving forward and that the next stage of discussions to take place under the French presidency would relate to its legal status

'Enhanced cooperation'
The question on everyone's lips was whether the IGC agenda should include a mechanism for some 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 UK 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.

Defence and security
Secret tunnels within the Castelo da Feira are designed to keep intruders out, but EU leaders lowered 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 was 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 was also discussed. This could send 1,000 police officers out to trouble spots like East Timor or Kosovo at a month's notice. For Mr Prodi, the progress made on military and civil defence at the Feira summit was enough to suggest that the EU was back in decision-making mode.

Tax
On 19 June, the outlook was gloomy for any solution to the wrangling over savings tax. This time the trouble-maker was not Britain. It was the Austrians who balked at proposals to eventually lift banking secrecy laws. On 20 June, the outlook was brighter. EU leaders reached agreement on the principles and guidelines for a future directive on withholding tax. There is now light is at the end of the tunnel, but the tunnel is long and the Portuguese have much work still to do on the issue before their presidency is up. Expect another two years before a formula and international agreement are secured and another seven years before any transition to a system of information exchange.

Greece
Greece has been granted entry to the single currency zone and will officially join on 1 January with a conversion rate of 340.75 drachmas to the euro. With the Euro-11 soon to become the Euro-12, this leaves only Britain, Sweden and Denmark on the sidelines.

IT
At the Feira summit, EU leaders were reminded of the need to think hard about Europe´s unemployed and to create a dynamic new economy. Down the road in Porto, 50 000 workers took to the streets to demand more social protection at work and a reduction in unemployment. EU leaders rubber stamped the Europe 2002 Action Plan as well as a European Charter for small enterprises and a European Social Protection committee.

Franco-German relationship
The romantic castle on a wooded hill was 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.

Dover tragedy
The Feira summit emphasised that the French Presidency and the European Commission will step up the fight against human trafficking. The aim is to secure increased co-operation between EU states and Europol in order to detect and dismantle the criminal networks involved