-Caveat Lector- Prodi Warns of EU Deadlock. By Ambrose Evans-Pritchard in Brussels and George Jones Romano Prodi: http://www.telegraph.co.uk/graphics/00/12/1/weu01.jpeg said it was 'absolutely necessary' for the major powers to cede ground before enlargement could go ahead successfully DEADLOCK on major issues of policy threatens the signing of a new EU treaty at next week's Nice summit, Romano Prodi, the president of the European Commission, said yesterday. The stumbling block is member states' refusal to give up their national veto. His gloomy assessment reflected growing frustration in Brussels at the way Britain and other leading countries are holding out against substantial moves to more qualified majority voting. Mr Prodi said that EU states had made scant progress on the "hot issue": the abolition of the national veto in the areas of taxation, social security, border controls, external trade and the EU budget. Agreement was needed so that the EU's decision-making machinery could still function in an enlarged union of 25 or even 30 states. Asked to gauge the risk of breakdown, he said: "Let's say half and half, if you want to put a figure on it." EU delegations have been told that the summit, which opens next Thursday, could drag on through the weekend because of arguments over the veto. Joschka Fischer, the German foreign minister, added a warning that collapse could put further pressure on the struggling euro. Mr Prodi said he hoped the summit would not degenerate like the United Nations climate talks in The Hague, which collapsed in the early hours last weekend after John Prescott fell out with his French counterpart, Dominique Voynet. Mr Prodi said: "This time, we have had months and months of negotiation. We have examined every single detail." Most of the leading EU states are fighting to hold on to the veto in one area or another. The French are blocking moves to qualified majority voting on foreign trade in the service sector, fearing that French culture would be swamped by Hollywood films. Michel Barnier, the commissioner in charge of the treaty negotiations, said that this would paralyse the EU's negotiating position in the next round of World Trade Organisation talks, which will focus on the liberalisation of services. He said: "Our trading partners, or rivals, are delighted. If you ask the Americans or the Japanese, they say go ahead, make sure you keep your veto rights in Europe, with 30 countries, because they know it is a source of collective impotence." Spain is blocking qualified majority voting on regional aid, fearing that it would lose billions in subsidies. The Germans are worried about asylum and immigration, while the British Government has a series of "red lines", stemming from the Labour manifesto in 1997, covering tax, social security, immigration and defence. Britain has indicated that it is prepared to accept majority voting on about 17 areas of EU decision-making when it is in the country's interest. That is about a third of the areas proposed by the draft treaty. Mr Prodi said it was "absolutely necessary" for the major powers to cede ground before enlargement could go ahead successfully. He said: "The mathematics are beyond doubt: in a union of 27 or more member states, the unanimity requirement will quite simply paralyse progress in every area where it is maintained." The European Parliament has said that it would not endorse the treaty unless there was a real breakthrough on reform. Mr Prodi accepted that some key issues would have to wait until after Nice, including "the incorporation of the charter of fundamental rights into the community legal order". This comment will irritate the British Government, which insists that the charter is merely a showcase of rights that would never have legal status. It has said that it would never allow the European Court of Justice to become the arbiter of Britons' rights. The prospects for the summit were the main topic Tony Blair and President Chirac of France discussed over dinner at the Prime Minister's Sedgefield constituency last night. Mr Blair made clear that Britain would not back down on maintaining the veto on tax, social security and border controls - areas vital to Britain's national identity. Robin Cook, the Foreign Secretary, indicated earlier that the arguments over the veto could result in a failure at Nice. He said: "The great majority of the 50 points are not going to be agreed at Nice, because one country or another actually objects to pretty well all of the list currently on the presidency's shopping list. This includes France, which objects to as many as we do." William Hague, the Conservative leader, said that Mr Blair would have quite a lot of "mending of fences" to do at his talks with Mr Chirac after Mr Prescott's run-in with the French environment minister at the climate summit. He said: "John Prescott clearly lost his cool and created quite a diplomatic incident. I hope we are not going to see more of the rights and powers of the country given away because Mr Prescott got into such a mess at the weekend." <A HREF="http://www.ctrl.org/">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance�not soap-boxing�please! These are sordid matters and 'conspiracy theory'�with its many half-truths, mis- directions and outright frauds�is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. 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