Hopes rise that Twelve will soon grow to 16: European Union reaches agreement on its negotiating stance for

THE PROSPECTS of enlarging the European Union to include Finland, Austria, Sweden and Norway within the 12- month deadline glimmered a little brighter yesterday as the negotiations moved into their final phase.

The toughest decisions - the applicant states' budget contribution, and their access to agricultural subsidies and regional aid - have been left until last and must be resolved quickly to give the European Parliament time to approve the deal and the four countries concerned time to organise national referendums allowing for official membership as of 1 January next year.

If the timetable slips much further, there could be a a fatal slow-down in the political momentum in the applicant countries, where public opinion is deeply sceptical about membership.

Yesterday, foreign ministers from the Twelve finally reluctantly agreed on a common negotiating stance to present to the four. It was immediately criticised as offering too little and it will form the basis for the detailed bargaining that culminates in two special make-or-break sessions at the end of the month.

The four European Free Trade Association countries are having most trouble with the issues of subsidies to Arctic farmers, and regional policy and lorry traffic through the Alps. 'We are very disappointed and deeply concerned about these positions,' Finland's External Trade Minister, Pertti Salolainen, said after the talks with EU foreign ministers. Sweden's European Affairs Minister, Ulf Dinkelspiel, said his country had made no progress whatsoever in membership talks.

There will be bitter rows ahead but, said David Heathcote Amory, Foreign Office Minister: 'I believe there is a better than evens chance we will be able to meet the March target date because we have the political momentum.' Commission officials shared his cautious optimism and while diplomats from the applicant countries publicly voiced disappointment in the lack of progress, they privately admitted compromises were possible.

The new members will be significant net contributors to Union coffers and are determined to get value for money. In particular they are angling for EU agricultural subsidies to protect Arctic farmers and for regional aid for the Burgenland region of Austria, four regions of Norway, five of Finland and one in Sweden. The regional aid issue is difficult except in the case of Austria, whose claim is acknowledged to be legitimate. The Scandinavians, the Twelve believe, are comparatively too rich to qualify for regional subsidies.

Agriculture is set to engender another clash of wills. The EU believes farm prices, now very highly subsidised, should be brought down to EU levels with the applicant countries paying compensation for any loss of income themselves. The applicants prefer a longer, staggered transition period with the EU itself offsetting costs. Norway in particular is looking not for income support for its farmers but production supports - a notion that runs counter to the philosophy in the reform of the Common Agriculture Policy designed specifically to limit production.

Other issues are country specific. Austria wants environmental guarantees against lorries travelling through the country. But the 12, proclaiming the gospel of free movement of goods, would only meet this some of the way yesterday.

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