Summit to be first casualty of new weapon

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The Government's most powerful weapon in its new counter-offensive against Europe is the threat to disrupt the Florence summit, which concludes the Italian presidency in June.

Threats to impede progress in the Inter-Governmental Conference (IGC) negotiations are less serious, as no formal negotiations have yet begun, and progress had not been anticipated for many months.

In the next days and weeks Britain can, however, block agreement in several key areas of European business where unanimity is required. The Europol convention now looks certain to be shelved, along with a deal on new measures to combat racism and xenophobia.

The first measure likely to be blocked is a new insolvency convention, ensuring mutual recognition by member states of each others' insolvency laws, which is due to be signed by midnight on Thursday. British officials in Brussels said yesterday they had received no instructions on how to proceed, but appeared confident that there would be no "empty chair" policy, and they would, at least, continue to attend meetings.

The decision to go to the European Court of Justice in Luxembourg to challenge of the beef ban will also cause alarm among other member states. The Commission has already conceded that elements of the ban may not have been formulated on strong legal grounds. Given Britain's constant criticism of the European Court, a victory in Luxembourg would present something of political paradox.

A series of far-reaching decisions on monetary union, employment and foreign policy are due to be tabled in Florence on 21 June. Heads of state and government, meeting at their six-monthly summit, do not vote on decisions, but decide by consensus. If Britain refuses to agree to policies, they would not, therefore, go through.

Britain's partners have been hoping that progress would be made in Florence on several key single currency issues. In particular, they are hoping for outline agreement on how countries inside EMU will relate to those outside. The summit is also expected to reach outline consensus on the construction of new exchange rate mechanism for those countries which do not join EMU at the 1999 launch. Germany will want to push through its proposals for a single currency "stability pact" at the Florence meeting.

The Italian presidency had hoped that Florence would produce broad new guidelines on tackling unemployment and social policy throughout the EU.

In the run-up to the summit the potential for disruption of everyday EU business is enormous. in areas of justice, home affairs and foreign policy, decisions are still largely taken by unanimity. Britain had been prepared to take an "opt out" on one section of the Europol convention, giving jurisdiction to the European Court, letting other members proceed. The "opt out" will now be refused and the convention shelved.