EU leaders 'powerless' to stop Russian blitz

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Tony Blair joins fellow European leaders in a freezing Helsinki for an end-of-year gathering doomed to be overshadowed by the growing crisis in Chechnya and the realisation that the EU is virtually powerless to help.

Tony Blair joins fellow European leaders in a freezing Helsinki for an end-of-year gathering doomed to be overshadowed by the growing crisis in Chechnya and the realisation that the EU is virtually powerless to help.

The heads of state are threatening diplomatic and economic sanctions on Moscow as it prepares to flatten the Chechen capital, Grozny, but there is wide acceptance that such measures would be at best symbolic.

While unveiling their ambitious plans for a stronger European defence capability, the 15 heads of government will be confronted with the embarrassment of being powerless as the Chechen crisis unfolds.

With Europe providing only limited financial and technical assistance to Moscow, the sanctions available are limited, and there will be pressure to reduce diplomatic contacts.

For all that, the Helsinki summit will be a significant staging post for the EU. It will be the launch of Europe's new defence capability, with an agreement on a rapid reaction force of 40-60,000 men for crisis intervention and peace-keeping.

There may be a declaration that these forces, which should be deployable in 60 days and able to stay in theatre for a year, do not constitute an army or a threat to Nato.

While there are plans for committees to control the force, its precise relationship with Nato, and who will have the right of first refusal on conflict intervention, will not be decided until next year.

When a row with Britain over Europe's proposed savings tax threatened to take over the agenda, Finland and the European Commission duly put their heads together to create a compromise likely to defuse the dispute for the time being at least.

Thus when the heads of the 15 member states meet in a Helsinki exhibition centre - described by one official as an "ugly modern box" - the summit will lay the foundations for a significant enlargement of the EU to the east, set in train for the first time a European defence and security capability and set the parameters for institutional changes to accommodate the EU's expansion.

Even Finnish diplomacy has not been able to tie up all of the agenda. The thorny question of whether Turkey will be given candidate status as an EU applicant is still unresolved. The outcome remains in the balance - according to one informed source it is "55 per cent solved".

Ankara has yet to accept calls for an international settlement in the Hague over territorial disputes with Greece, and the status of Cyprus - another EU candidate - is also complicated.

The other new and significant project, enlargement, will also be given a boost, with progress reported on the six nations already involved: Poland, Hungary, the Czech Republic, Slovenia, Estonia and Cyprus. New talks will be launched with six more nations: Latvia, Lithuania, Romania, Bulgaria, Slovakia and Malta.

For Tony Blair, bruised by the Anglo-French beef war and the row over the tax on savings, this territory is a welcome relief. He has played a pivotal role in the forging of the new defence policy by reversing traditional opposition and seeking closer ties with France on the subject of defence.

During the Balkan crisis he also pushed hard for a rapid enlargement.

But not everything will be quite so comfortable for Downing Street. Tonight finance ministers will debate the compromise on the savings tax, and the Chancellor, Gordon Brown, will come under pressure to make a positive response. While Germany, the UK's main critic on the issue, is expected to warm to the proposal, Mr Brown is likely to be non-committal, seeking clarification on a series of points - probably enough to kick the plans forward into the Portuguese presidency, which starts in January.

The next round of institutional change will also be a less comfortable discussion for Mr Blair. The Prime Minister is determined to see off pressure for abolition of the national veto on areas such as tax, but he may have to concede that the issue should be debated at least. Finland has proposed that majority voting for areas "closely related" to the single market, implying some fiscal measures.

All of which illustrates Britain's position within the EU after two years of Blair government. On foreign policy and defence the UK can reasonably claim to play a leading role. On economic policy the differences remain almost as stark as ever.

The French government was poised last night to announce its decision on the lifting of its ban on British beef. Officials indicated that a cabinet committee on beef may delay the lifting of the embargo because of last-minute doubts. The French food safety agency AFSSA issued a non-committal report on Monday giving a scientific assessment of the position but leaving it to the government to decide whether to lift the ban.