EU leaders claimed to have made an important breakthrough in their ambition to make Europe the world's most competitive economy by 2010.
The leaders agreed at a meeting in Barcelona to a partial liberalisation of the European energy market by 2004 but France succeeded in preserving its state monopoly for providing electricity to households.
The Taoiseach, Mr Ahern, expressed satisfaction at the summit's outcome and said that the EU was on track to fulfil its economic reform plan. The British Prime Minister, Mr Blair, also hailed the summit as a turning point in Europe's development as an economy.
"There is no doubt this is a change of gear for Europe and a very welcome change. There is no one really arguing about the direction. There may be some argument about the pace of movement," he said.
More than 200,000 people gathered in Barcelona to protest against the EU's economic policies and to urge the leaders to pay more attention to the needs of working people. Police fought with demonstrators at the end of a mostly peaceful protest but arrests and casualties were few.
A football match in the city between Real Madrid and Barcelona was delayed for a few minutes on Saturday night when two anti-EU protesters ran onto the field and handcuffed themselves to the goalposts.
The French Prime Minister, Mr Lionel Jospin, welcomed the summit deal on energy but said he was glad to preserve the monopoly on supplying domestic users for the moment, adding that there was no proof that competition improved service.
"We agree to enter into a process of controlled and gradual liberalisation. We have succeeded in fending off those demands that we did not want to see adopted," he said.
The leaders agreed to launch Galileo, a €2.5 billion satellite system to rival the US Global Positioning System (GPS).
And they agreed a number of measures to liberalise markets and to encourage more people to enter the workforce. These include a pledge to provide day care for children of 90 per cent of working mothers by 2010 and to raise the European average retirement age from 58 to 65.
The leaders also promised to introduce lower tax rates for low-paid workers in an effort to make work more attractive than unemployment benefits.
On foreign policy, the leaders called on Israel to withdraw its forces from Palestinian territory and reaffirmed their support for an independent Palestinian state alongside an Israel secure within internationally recognised borders. "Israel, notwithstanding its right to fight terrorism, must immediately withdraw its military forces from areas placed under the control of the Palestinian Authority, stop extra-judicial executions, lift the closures and restrictions, freeze settlements and respect international law. Both parties must respect international human rights standards," they said.
They condemned the conduct of last week's presidential election in Zimbabwe and threatened further sanctions against President Mugabe. The Taoiseach expressed satisfaction at the positive response among leaders to his request for a declaration guaranteeing that the Nice Treaty will not affect Irish military neutrality.
The declaration is expected to be agreed at a summit in Seville in June in advance of a second referendum on Nice in the autumn.
Mr Ahern acknowledged that a second referendum campaign would have to be fought with more energy and expressed the hope that business and trade unions would play a substantial role in encouraging voters to back the treaty.
