EU may be ready to relent on sanctions over Austria

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European foreign ministers yesterday gave the first sign that Austria's isolation could soon be over during a meeting in which several countries, including Italy, argued for moves to bring political sanctions to a close.

Austria said that Finland, Ireland, Denmark, Italy, Spain and Greece indicated that they would like to end, or at least modify, the diplomatic freeze, and European Union heads of state and government are likely to discuss the issue ahead of a June summit in Portugal.

As a first step towards an "exit strategy" from the diplomatic impasse, governments are expected to try to identify the tests which should be applied to Austria before ending the action of 14 member states which severed bilateral political contacts with Vienna. The sanctions were taken at the end of January in protest at the admission of Jörg Haider's far-right Freedom Party into the coalition government.

France and Belgium have pressed hardest for action against Vienna but there is growing disquiet in several countries, particularly Denmark, Finland and Italy - which is not only a neighbour of Austria but is aware that right-wingers could be included in the next Italian government.

At yesterday's informal meeting of European foreign ministers in the Azores Lamberto Dini, the Italian foreign minister, said he feared a backlash against the EU in Austria because of the sanctions.

Louis Michel, Belgium's foreign minister, insisted the sanctions should stay while the Freedom Party remains within the Austrian coalition. ButHubert Vedrine, the French foreign minister who missed Saturday's photo session because he had to take a phone call, asked for a second to be organised in order to avoid his absence being interpreted as a snub to Austria.

France is aware that the issue could disrupt its tenure of the rotating EU presidencywhich it assumes at the end of June. There have been hints that Vienna might block agreement at the inter-governmental conference to amend the EU's treaty during the French presidency.

An Austrian proposal to send a team of EU observers to Vienna was rejected yesterday and signs of a softening came despite irritation from the Portuguese hosts. Portuguese officials were incensed by what they saw as Austrian attempts to hijack the weekend meeting over the issue.

Some countries "had a particular, specific view on this issue and were open to finding a solution," Jaime Gama, Portuguese foreign minister, said. "But anyone who came here thinking that something could happen was barking up the wrong tree."