LEADING QUESTIONS ON A NEW EU BUDGET.

As the dust settles from the squabbles on last weekend's deal on a European Union budget, it is time to look further ahead on where the result is likely to lead and at who is likely to be doing the leading.

The no-holds-barred review now in prospect of what the EU spends and how it funds itself will thicken the air between now and 2008-2009 with proposals as member states and their leaders and lobby groups jostle to gain support for their views. And the schedule envisaged risks leaving the EU with almost half a decade of inchoate discussion ahead of it yet another key issue deferred, like the frozen debate on the EU Treaty, or incoherencies in the EU position on world trade.

As with all such questions, the form of the debate will be less important than the quality of leadership in its conduct.

Will Barroso salvage his reputation by delivering a courageous budget reform proposal? His ally Blair will certainly no longer be a key player, and his likely successor has no taste for European consensus and coalition building. Sarkozy, currently the top tip to succeed Chirac in 2007, has displayed strong support for the Common Agricultural Policy and defending French economic interests.

Angela Merkel emerged as indisputably the strong character of this summit, ready to make a domestically-tough choice even in her precarious...