IN A sun-flooded room with pink roses on the table, the leaders of France and Germany yesterday discussed the momentous issues that will dominate next week's Berlin summit: Agenda 2000 negotiations for the EU's budget until 2006, including the reform of the Common Agricultural Policy; the replacement of the EU Commission that resigned last Monday night and the suspension of the Kosovo peace talks.
The German Chancellor, Mr Gerhard Schroder, began a marathon day that took him from Paris to Brussels and Dublin by walking to the Elysee Palace for a twohour meeting with President Chirac and the French Prime Minister, Mr Lionel Jospin.
Yesterday's meetings were the last of Mr Schroder's bilateral consultations before the Berlin summit next Thursday and Friday.
France considers itself Germany's closest European ally, but Paris has also been extremely demanding in Agenda 2000.
Mr Chirac holds the key to the success or failure of the negotiations, which Mr Schroder desperately needs to complete on schedule to prove his credibility in Germany following the resignation of his former finance minister, Mr Oskar Lafontaine.
France rejected a compromise proposal for CAP reform agreed to by EU farm ministers last week, on the grounds that it overshot budget targets and does not take account of French proposals for "degressivity" and investment in rural development.
Speaking to journalists on the steps of the Elysee with Mr Schroder, Mr Chirac said there were still areas of disagreement between Bonn and Paris.
"There has been some progress under the German presidency," he said. "But it is neither sufficient nor satisfactory."
Mr Schroder agreed there was work left to be done on CAP reform. But the German EU presidency had given French farmers "a big success" by abandoning proposals for national and EU cofinancing of the CAP, he added. He and Mr Chirac are believed to have discussed a new German proposal that would incorporate the French idea of gradually decreasing direct aid to farmers.
The two leaders refused to divulge anything of their discussion of a candidate to replace the President of the Commission, Mr Jacques Santer.
"The only person present was our interpreter, whom we trust," Mr Schroder joked.
"The Chancellor and I share the same idea," Mr Chirac said. "But it is not up to us to choose a candidate. It should be done by the 15 [EU members]."
In surprisingly good form for a politician with political difficulties at home, Mr Schroder added: "I can tell you that neither of us is a candidate."
The leaders agreed that a replacement for Mr Santer must be found as quickly as possible. Mr Schroder said he hoped the 15 would agree on the procedure for choosing a new president in Berlin; if necessary, he would call an extraordinary summit.
The resignation of the Commission could work in Mr Schroder's favour because heads of government will not want to deepen Europe's crisis with an unseemly squabble over money.
On Kosovo, Mr Chirac and Mr Schroder said President Slobodan Milosevic of Yugoslavia bore full responsibility for the failure of the Paris peace conference - and the consequences of that failure.
Patrick Smyth reports from Brussels:
Later in Brussels, speaking to journalists after meeting the President of the Commission, Mr Santer, the German Chancellor said that his tour of capitals had convinced him that "all are all the more aware of the need to make a success of Berlin because of recent events".
"We have to send a signal to Europe that we are capable of acting," he said.
Mr Schroder reiterated his contention that a deal on Agenda 2000 could be done at the summit and agreement reached on a procedure for replacing the Commission, but he refused to be drawn either into any discussion of names or of suggestions that the French and Germans may have already agreed a name.
Mr Schroder then met the President of the European Parliament, Mr Jose Maria Gil Robles, before flying to Dublin.
