EUROPEAN COUNCIL: FEIRA SUMMIT MARKS ANOTHER INSTITUTIONAL STEPPING STONE.

Austria had to give ground on the taxation dossier without Chancellor Wolfgang Sch?ssel securing a signal from his partners at this Council regarding the suspension of bilateral sanctions against his country. Considerable pressure was however brought to bear to ensure Chancellor Sch?ssel understood that failure to subscribe to the compromise would further distance the prospect of normal relations with Austria being resumed.At a working lunch on 19 June, Portugal's Prime Minister Ant[cent]nio Guterres offered Mr Sch?ssel an opportunity to speak. The Austrian Chancellor gave what was by common consent a brilliant, conciliatory and even convincing speech on his Government's record regarding human and minority rights and democracy. Mr Guterres thanked the Austrian Chancellor, assuring him that a solution may be found before the end of Portugal's Presidency but that the Summit was not the place to discuss the issue in detail, as the dispute falls not within the Community realm but arises from bilateral relations between Vienna and other Union capitals. A debate within the European Council was not therefore organised, with those delegations that had come forward over recent weeks to press for the lifting of sanctions, observing this instruction in silence. Wolfgang Sch?ssel then took the stand once more to deplore in what was deemed a threatening tone, the continuing absence of dialogue with which he is faced. The Portuguese Prime Minister responded in lively terms that primary responsibility for the current situation lies with Chancellor Sch?ssel himself for having forged an alliance with the Jorg Haider's FPo. Mr Sch?ssel responded by rejecting any diktat against Austrian internal policy. Among Heads of State and Government the discussion went no further, but Austria's Finance Minister, the FPo's Karl-Heinz Grasser, later made an implicit link between his rejection of the Presidency's compromise on the taxation of savings and Austria's ostracism.The treat, made several times by Vienna, that Austria might impose a blanket block on the functioning of the European Union therefore remains a live source of concern. Even though no progress was made in Feira, the search for a solution continues. The Presidency will maintain contacts to see whether there is any change in the position of the fourteen Member States before the end of June, Portugal's European Affairs Minister Francisco Seixas da Costa explained. One hypothesis Mr Seixas da Costa was not ruling out would take the form of "technical adjustments" though he offered no further clarification. Bilateral sanctions, only being applied in practice by a handful of Member States, notably Belgium and France, essentially consist of refusing audiences to Austrian Ambassadors in European capitals, boycotting Austrian participation in certain cultural events and preventing the appointment of Austrian nationals to international bodies. In the course of a protracted and relaxed discussion at their hotel bar on the night of 19-20 June, Messrs Guterres and Sch?ssel reviewed the broad issue, but the European Council President made no pledge to go beyond the informal undertakings made over lunch, a position confirmed by his European Affairs Minister. This vague promise of a solution shortly was not sufficient to convince Wolfgang Sch?ssel to make a gesture on the tax front. A proposal form the Danish Prime Minister, Poul Nyrup Rasmussen, that Mr Guterres should continue to manage the Austrian dossier under the French Presidency if no solution was reached in the meantime was rejected.IGC and the Charter of Fundamental RightsEarlier in the morning Nicole Fontaine addressed the Council, reminding Ministers of the European Parliament's priorities for the IGC and also for the Charter of Fundamental Rights that the Parliament hoped to see included in the Treaty in order to make it legally binding.This ambitious role for the Charter was only supported by the Dutch Prime Minister Wim Kok when it was discussed by Heads of State and Ignacio Mendez de Vigo (EPP, Spain), Vice President of the Convention with responsibility for drawing up the Charter of Fundamental Rights (standing in for the President, Roman Herzog, who had been unable to leave Germany due to the sudden death of his wife). The other ten participants in the debate reserved judgement and simply called for a simple political declaration to be made with the option of making any further...