Paris and Bonn hail Major's mood of compromise

John Major's latest ideas for a "flexible" Europe, allowing countries to pool powers at different speeds, are being cautiously welcomed in Paris and Bonn, as the possible key to a new treaty deal.

Senior French and German officials say that they now see signs of a compromise from Mr Major, which could allow them to pursue their next round of integration plans without Britain and without an automatic British veto.

A deal on flexibility now appeared to be "95 per cent there",a source in Bonn said. In Paris, officials expressed relief that, at last, Britain was talking, which was "encouraging".

France and Germany proposed in November that decisions on whether groups within the EU can share powers without the rest should be taken by qualified majority vote among member states. Until now Mr Major has insisted that Britain must be able to veto any attempt by other nations to develop common policies without Britain, to ensure that it is not permanently isolated.

Comments made by Mr Major in recent days, and outline proposals presented to the Dutch presidency, have given Britain's partners reason to hope that Britain may relax its stand on the use of the veto when it comes to "flexibility".

The Prime Minister has not said he would relinquish the right to veto such moves. However, in recent days, he has spoken out so enthusiastically in favour of a "flexible" Europe that his partners sense a concession. There are signs that France and Germany are also willing to compromise, allowing countries to veto moves towards "flexibility" where it can be argued that their national interest is jeopardised.

The Prime Minister has signalled that he is particularly open to his partners sharing greater policy-making in areas of immigration and criminal justice. His comments were enough yesterday to breathe new life into negotiations in Amsterdam on EU treaty reform.

While several of Britain's partners are rejoicing at any sign of British goodwill, in other quarters Mr Major's sudden display of enthusiasm for allowing Europe to pool powers at different paces is being viewed with scepticism. Pro-European critics in Britain describe the initiative as a risky ploy to buy off Tory Euro-sceptics in the run-up to the election.

Labour, which is likely to be in power when the next treaty is signed later this year, is determined to maintain Britain's veto over the rights of other countries to pool sovereignty in core groups. Such moves could leave Britain isolated without influence at Europe's "top table" Labour says.

Within the European Commission the prospect of building a flexible multi- speed Europe is sparking an increasingly fierce debate. Although flexibility could allow countries to continue to make progress towards greater integration, it could also bring about greater fragmentation of the union.

Flexibility would simply be unworkable in many EU policy areas, such as transport and the environment. The commission is also afraid that the single market could be jeopardised, and countries might start asking for exemption from unpopular state-aid or competition policies.

The EU has already become increasingly "flexible", as different member states - particularly Britain - have recoiled from certain policy proposals."Flexibility may be a tempting idea for Mr Major because it appears to let Britain of the hook but EU purists don't like it at all," a senior commission official said.

In the new treaty negotiations, however, several states see flexibility as the key to progress.

Barriers to the new multi-speed Europe

Any new EU rules on flexibility must take account of the following points:

1) What areas of EU policy can the fast-stream pursue? Would areas with obvious cross-border implications, such as the single market, transport and environment be excluded?

2) Who should pay for policies pursued under this arrangement? Will those left in the slow lane be liable for any costs?

3) Will those left out be able to join later if they change their minds?

4) Will those left out have any say over policies taken by the fast-streamers? For example, if an inner core decide to set up their common police force, would those outside have any influence over that force?

5) Should there be a general clause in the treaty setting out procedures for pursuing flexibility? Or should decisions to go "multi-speed" be taken on a case by case basis?

6) How will Europe's institutions respond to this multi-speed decision making. How can the European Court's jurisdiction be varied to take account of different "core groups"?

7) Should it be for the commission to propose policies be shared by a particular group of countries? Or should it be for member states to make the suggestion?

8) Europe is trying to get closer to the citizen. But in a multi-speed Europe, how will the citizen understand what on earth is going on?