EU Summit

A pivotal United Nations meeting on climate change is more than a year away, but in the slow-paced world of Brussels bureaucracy, that's very, very soon.

The European Union has said it wants to take a leading role in the November 2009 global climate change discussions, which will try to settle on a replacement for the Kyoto Protocol. But first the 27-nation bloc has to come up with its own energy policy reforms.

The EU is feeling the pressure, as significant agreements between members still exist. The bloc wants to liberalize the EU's energy market by June 2008 and have a comprehensive policy approved by December 2008.

"The momentum cannot be allowed to slip," European Commission President Jose Manuel Barroso said on Wednesday. "The timing of an agreement is critical to its success."

Energy issues remain contentious

Energy policy reforms as well as a French proposal for a Mediterranean Union top the EU heads of state's agendas during their regular gathering in Brussels on Thursday and Friday.

While the EU passed a historic agreement last year to cut emissions by 20 percent from 1990 levels by 2020, the bloc now has to decide how to reach its goals. They also want 20 percent of electricity to come from renewable sources such as wind, solar, hydro and wave power within the next 12 years.

By the end of 2008 the EU wants to outline specific steps needed to reduce greenhouse gas emissions and promote renewable energy and biofuel.

But the devil is in the details. Germany has resisted efforts to cut carbon dioxide emissions from cars, saying it would hurt the country's politically influential automobile industry. And countries can also not agree on whether to break up Europe's power companies.

There's also concern that the EU's measures to fight global warming might result in driving heavy industry out of Europe. Barroso promised special guarantees for energy-hungry industries such as steel, cement and aluminum.

"It would be a crucial error to view the interests of European industry as being contrary to combating climate change," he said.

Sarkozy to seek EU backing for "Club Med"

French President Nicolas Sarkozy and German Chancellor Angela Merkel are expected to explain plans to create a "Mediterranean Union" in July. The plan caused a rift between the two countries, which diplomats say has been settled.

The union would promote trade and cooperation with the EU's southern neighbors. Sarkozy has also suggested that it might be a better way to include Turkey in the EU policies rather than offering Ankara full membership.

Germany had worried that northern EU countries would be left out of the new union. There's also concern in Berlin that France is trying to use the Mediterranean Union to counter the influence Germany has gained since 10 mainly central European nations joined the EU in 2004.

Sarkozy, who is set to outline his proposal over dinner at the summit on Thursday, was warned against pushing the idea too hard.

"If the EU is divided by the Mediterranean Union, that would be a very bad message on the eve of the French presidency," of the European Union, said Martin Schulz, the Socialist bloc leader at the European Parliament. "That would lead to France's isolation, which we certainly do not want."

France takes over the EU's rotating presidency from Slovenia on July 1.

Will anyone want to join?

The Barcelona Process was launched in 1995 as a way to improve political, economic and social ties to states in the Mediterranean region. But it has been held hostage by confrontations between Israel and Arab countries.

"If the Mediterranean Union is a reinforcement of the Barcelona Process, then we completely agree, but this enterprise must remain within the framework of the European Union," Schulz added.

A number of EU countries have, however, expressed doubts about the project and concerns over how it will be financed. A unanimous vote to create the new alliance would be required for EU funds to be used.

Even if EU leaders do agree, it would still need the support from partner countries, who have not expressed large amount of interest in the idea.

Faltering markets also on agenda

Barroso also spoke out Wednesday against protectionism as a response to the economic rough patch caused by the downfall of the global markets. Europe is a huge winner from globalization, Barroso said, and remained at the top of the list as a world trading power.

"Europe needs to protect, but it must avoid the temptation of becoming protectionist," he said. "A retreat into protectionism would be madness."

But protectionism is on the minds of EU leaders. They are expected to endorse a global voluntary code of conduct for sovereign wealth funds and to call for more transparency in the financial markets at the meeting this week.