Hard bargaining begins at Luxembourg meeting

Today's meeting of EU foreign ministers in Luxembourg should have been an exercise in damage-limitation after Ireland's rejection…

Today's meeting of EU foreign ministers in Luxembourg should have been an exercise in damage-limitation after Ireland's rejection of the Nice Treaty. Wise counsels throughout Europe were agreed that the result called for a lengthy period of reflection - a coded call for any second referendum to be postponed until next year.

But over the weekend the ripple effect of Ireland's decision has become evident throughout Europe and EU governments now believe that they need a solution to the Irish problem sooner rather than later.

Since the result became known on Friday, Austria's far-right leader, Dr Jorg Haider, has called on Vienna to hold a referendum on enlargement. Some politicians in France want to halt the parliamentary process of ratifying the Nice Treaty, which begins tomorrow, as a result of the Irish vote.

Old-fashioned European enthusiasts such as the Christian Democrat leader in the European Parliament, Mr Elmar Brok, view the Irish vote as an opportunity to scrap the Nice Treaty in favour of a more adventurous programme for Europe's future.

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Press reaction throughout Europe emphasised Ireland's tradition of support for European integration and suggested that, if other EU member-states were to hold referendums on the treaty, the outcome could be similar.

Countries in central and eastern Europe which hope to join the EU within the next five years have reacted with alarm to Thursday's vote.

EU leaders have been more diplomatic in their response, expressing regret at the decision and stressing that they want to help the Government to find a way out of the crisis. But, as he appealed for calm, the French Prime Minister, Mr Lionel Jospin, was unable to resist making reference to Ireland's status as a net beneficiary of EU membership.

"It was a bit paradoxical given that, after all, Ireland is certainly one of the countries which has most benefited from its membership of the European Union", he said.

The agenda at today's meeting of foreign ministers is already overloaded, as the Swedish presidency attempts to resolve outstanding conflicts before this week's summit in Gothenburg. When the ministers discuss the Irish problem over lunch they will have one fundamental question for the Minister for Foreign Affairs, Mr Cowen: what do you want?

One senior EU diplomat predicted this weekend that it would be more difficult to secure opt-outs for Ireland than it was for Denmark following that country's rejection of the Maastricht Treaty. "We have an extremely difficult situation. We must first of all find out why the Irish said No before we can talk about opt-outs", he said.

All member-states, including Ireland, are agreed that the core elements of the treaty, relating to the reform of decision-making within the EU, cannot be renegotiated. Although defence issues played a major role in the referendum campaign, it may be difficult to negotiate an opt-out because the legal basis for the Rapid Reaction Force lies in the 1997 Treaty of Amsterdam.

Irish officials are considering two options. The first is a declaration agreed by all EU member-states affirming Ireland's neutral status and emphasising that participation in any Rapid Reaction Force operations is voluntary. The second is the introduction of a system of parliamentary scrutiny of EU laws which would mean that Commission proposals would be debated in the Dail before Ireland assumes a negotiating position on them.

Mr Cowen has been considering such a measure for some time, not least on account of the debacle surrounding the EU reprimand over last December's budget.

As he negotiates with other ministers, Mr Cowen has a trump card insofar as the decision to hold a second referendum on Nice is in the gift of the Government. Without a second referendum, the treaty is doomed. It is in the interest of the entire EU that the Government should be able to hold a second referendum with a good chance of success.

EU diplomats agree that a successful formula will take months to create. But developments over the weekend mean that, by the end of this week, the Government must make clear what its demands are.