ENLARGEMENT: POLAND TAKES TALKS DOWN TO THE WIRE.

The chance of a compromise?

The potential compromise was based largely on a budgetary manoeuvre: the Euro 40.5 billion package agreed by EU leaders would remain the same, but the timing of its disbursement would be modified to accommodate Poland in a pragmatic fashion. It depended on drawing a distinction between commitments and actual payments. Since in 2004-2006 the EU payments to the candidates will not reach Euro 40.5 billion - they will be perhaps only Euro 25 billion - a cash-flow facility of up to Euro 1 billion could be created from the remainder to cover any cash-flow shortfalls for Poland. And another Euro 300 million could be made available for the other nine.

Poland's second bilateral was attended by European Commission President Romano Prodi, as a way of upping the psychological ante - or of flattering Poland's vanity. Poland had its own eminence grise in an antechamber, the deputy Prime Minister and Agriculture Minister Jaroslaw Kalinowski - who as leader of the coalition partner in the government, and as head of the strongly agriculture-based Peasant Party, has assumed a crucial position in the talks.

Poland's chief negotiator Jan Truszczynski was expressing mixed feelings about one of the concessions added to the deal since the Brussels Summit - the possibility to 'top up' CAP direct aid payments to 45% in 2004, 50% in 2005 and 55% in 2006, by using up to 20% of Rural Development allocations and/or national funds. Although this is 20% above the basic phase-in levels the EU proposed for direct payments, Mr Truszczynski said that Poland would have preferred no ceiling. Some Polish farmers, he said, would be able to live with 45% and even make "some extra cash", perhaps by producing some 'added-value' goods. Other farmers would face a considerable squeeze at the level of 45% in terms of cost/price margins, which would "make life and work harder".

For Poles there is an additional resonance to this Friday the thirteenth: it is the 21st anniversary of the imposition of martial law by Polish leader General Jaruszelski. Asked whether December 13 would therefore be an apt date to finally seal Poland's return to the democratic 'European home', Poland's negotiator remarked only that the symbolism "does not escape anyone in Poland".

Waiting and watching.

While these dramas were being played out, Latvia and Estonia, both essentially content with the agreement, were waiting to see if Lithuania would settle its outstanding demands for more on agriculture and funding for closing its Ignalina nuclear plant.

Latvian Foreign Minister Sandra Kalniete confirmed to European Report during the day that Latvia had accepted the Danish package in principle, except for wanting a bigger milk quota...