AGENDA 2000:MEMBERS STATES URGED TO SHOW THEIR HANDS.

Summary:According to the Germany Presidency's timetable (see European Report No 2377), part 2 of the Agenda 2000 reform negotiations, should be completed on February 26 at the informal EU Summit in Petersberg, near Bonn. Preparations for the deadline are to be made by a conclave of EU Foreign Ministers in Luxembourg on February 21. It will be preceded by a high-risk marathon Farm Council due to kick off on February 22 in Brussels (see separate article, Section IV). During the conclave, Joschka Fischer will hand his colleagues a non-paper revising the negotiating package. The Presidency is hoping to secure a informal political agreement on several procedural items. There is no agreement in sight on the budgetary questions.

Presentation of the financial perspective.

The question of denominating the Euro in current or constant terms is still a row between the Member States and even within national delegations, depending on whether the forum is the Farm Council the General Affairs Council or the Finance Council. The President of the General Affairs Council admits that further talks are required to decide if the financial perspective should be index-linked by 2% a year or not, or whether a 0-2% indexation should be contemplated. The Presidency believes it can push through an agreement on keeping separate 15-sided spending and enlargement expenditure (with the amount remaining to be fixed) and muster a large degree of support for the budget for the pre-accession instrument (Euro 3.12 billion a year between 2000 and 2006).

Category 1 (Agriculture).

The Presidency's aim is to secure the Member States' support for stabilising farm spending at an average of Euro 40.5 billion a year between 2000 and 2006. Should other items of expenditure, such as rural development, be included in this category, the spending ceiling would be raised by the same amount. Special heed has to be paid to the sliding scale system for direct aid, along with the introduction of a certain form of co-funding, according to the non-paper.

Heading 2 (Structural measures).

Joschka Fischer hopes to convince the Council that the stabilisation of...