WAITERS AND WESTERN BALKANS DETERMINE EU'S FUTURE.

It is hardly any exaggeration to say that the future of the European Union now hangs on recruitment in the French catering industry, and on the fate of 25,000 square kilometres of the Western Balkans.

If the EU is to maintain its momentum, the summit of EU leaders this week has to reach a deal on its finances. And no deal on finances will be possible unless France wins tough wording on Macedonia's EU membership bid, and generous wording on VAT rates that will boost employment in its restaurant sector.

All the months of wrangling over the EU's spending plans for 2007-2013 are coming down to this triangular challenge.

EU spending is not going to rise very much above what the UK is proposing. Other net contributors don't want it to, and most net beneficiaries are resigned to this.

The UK budget rebate is the principal source for the additional sums necessary to massage the figures into a shape that most member states can accept. While the UK is still in the EU chair, it may trim its rebate a little further, since it would, in return, gain the satisfaction of presiding over an agreement on the financial perspective. It is less likely to do so next year, to hand that achievement to the Austrian or Finnish Presidencies.

But any further UK surrender of its rebate will entail some agreement on an...