Rows over defence and euro threaten deal on constitution

Rows marred the start of a meeting on the EU constitution yesterday, when an important deal between the UK, France and Germany over EU defence was threatened by American reservations.

EU foreign ministers in Naples for the two-day meeting were in fractious mood, still reeling from the effects of Tuesday's deal under which France and Germany escaped fines for breaching an agreed budget deficit by suspending the euro's rulebook.

The Netherlands and Spain pressed for discussions on the so-called stability and growth pact, which underpins the single currency, and the Dutch Deputy Foreign Minister, Atzo Nicolai, said: "This is not business as usual."

At a formal lunch, EU foreign ministers quizzed the Foreign Secretary, Jack Straw over an agreement struck by the UK, France and Germany on defence - but learned more from reading the French press. Last-minute issues with Washington were blamed for the non-appearance of the paper which spells out an agreement on the the future of the EU's defence structures.

British officials said that the document might be changed after consultations "with allies and partners".

The deal satisfies French and German proposals for an operational military planning centre for autonomous EU missions, something once resisted by the UK on the basis that it would undermine Nato.

Now Britain has accepted that a small strategic planning group, based in Avenue Cortenberg in the European Union quarter of Brussels can be beefed up with an operational dimension. The group will also include a civilian element to equip the EU to mount police operations after intervening in crises.

However, Cortenberg will only be operational for one mission at a time, and with the agreement of all the nations, making it an ad hoc centre rather than a permanent one.

One British official said: "An EU military HQ would be set up for a particular operation. What matters is that it would be wound down when that operation had finished." Serious missions would be run from national HQs, normally in the UK, France or Germany.

The deal means that Paris and Berlin are unlikely to set up a separate planning centre in the Brussels suburb of Tervuren with Belgium and Luxembourg. Meanwhile, British plan to set up a permanent EU planning cell within Nato's headquarters, in Mons, Belgium, will be accepted. This will be the nerve centre of EU operations carried out in cooperation with Nato.

The three-nation paper also accepts the idea of groups of countries co-operating on defence - so-called "structured cooperation". This would limit the countries taking part to those who could, by 2007, engage in operations of between 20 and 120 days at five to 30 days notice.

The nations also agreed to a mutual defence clause on the basis that Nato should remain, for those EU nations that are members, "the basis of their collective defence". Neutral nations object to the current formulation and may veto it.

With two weeks left before the EU's leaders are due to finalise the text of the constitution, pressure is mounting on the Italian presidency to clinch a deal. Spain's foreign minister Ana Palacio said that Italy was ignoring Spanish and Polish concerns about future EU decision-making rules.

Madrid and Warsaw want to stick to a deal struck in Nice in 2000 giving them 27 votes, almost equal to Britain, France, Germany and Italy which have 29 votes in the Council of Ministers. But the draft constitution suggests decisions would be adopted if at least half the EU states representing 60 per cent of the EU's population were in favour.

Italy will wait to the last minute before broaching this subject, and that of the size of the European Commission. Smaller countries object to the idea of removing their automatic right to send a voting commissioner to Brussels.

DISPUTED AREAS

Voting: Spain and Poland oppose plan whereby a decision would need backing of 50 per cent of nations and 60 per cent of EU population.

Commission size: Small nations hate moves to strip countries of automatic right to send voting representative.

God: Catholic nations want reference to Christian values.

Majority voting: Britain opposes moves to axe national veto on some areas.

Energy: The UK and the Netherlands fear weakened national control of supplies.

Stability pact: Dutch oppose integrating pact that underpins the euro into the constitution.

Charter of Fundamental Rights: Britain wants more protection for domestic law.

Defence: Sensitive details remain over mutual defence.

EU foreign minister: UK sees the title as implying the trappings of a nation state.

Treaty change: UK adamant that future changes must be agreed by all countries and their parliaments.