EU faces 2-speed future as constitution talks fail

European leaders abandoned efforts to strike a deal on an historic first constitution for the European Union on Saturday when a dispute over voting rights, pitting France and Germany against Spain and Poland, proved insurmountable.

The impasse at the Brussels summit over the blueprint to streamline the running of the EU and give it more international clout plunged the bloc into crisis before the biggest expansion in its five-decade history.

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France and Germany, core founder members of the Union due to expand from 15 to 25 members in May, talked up the possibility of like-minded nations integrating more closely in the absence of a constitution, leaving other states on the sidelines.

"If we do not reach a consensus in the foreseeable future, then a two-speed Europe will emerge. That would be the logic of such a final failure," German Chancellor Gerhard Schroeder told a news conference after the talks broke down.

French President Jacques Chirac said he too hoped to see a small group working together on closer cooperation.

"This will provide an engine, an example that will allow Europe to go faster, further and better," he said, pointing to defense, economic policy and justice as three areas where a small group could work closer together within the Union

Polish President Aleksander Kwasniewski, whose country is by far the biggest of the 10 mostly formerly communist entrants to the EU, said the bloc should "develop jointly, with the same speed over the entire area and not only among the chosen ones."

Leaders sought to find positives in the collapse of negotiations on the constitution, which would have installed an EU foreign minister and strengthened the post of president.

But they set no date to resuscitate negotiations, and Swedish Prime Minister Goran Persson said serious talks were unlikely to resume until the first half of 2005.

Irish Prime Minister Bertie Ahern, who takes over the rotating EU presidency from Italy in January, said he would hold consultations and propose a way forward at the next regular summit in March.

The failure of the talks means the voting system agreed after acrimonious negotiations in Nice in 2000 will now go into force as scheduled.

Under the Nice Treaty, Poland and Spain received 27 votes in the European Council of leaders, where the bloc's most important decisions are taken, against 29 for Germany, which has a population more than double their size.

They refused to give up their voting powers, while France and Germany were prime movers urging adoption of a new system.

A Convention of lawmakers and national representatives led by former French President Valery Giscard d'Estaing proposed a reform whereby most decisions would pass if backed by a majority of EU states representing 60 percent of its population.

The breakdown capped a year in which Europeans were bitterly split over war in Iraq, EU budget rules were bent, Sweden voted against joining the euro and Britain delayed indefinitely a referendum on the same issue.

Italian Prime Minister Silvio Berlusconi, who hosted the summit, said his handling of the six-month EU presidency had been a "triumph."

"Some people see the glass half empty. I see the glass half full," Berlusconi told reporters.