Three-year rift ends as Franco-German axis is revived

Paris and Berlin will finalise plans today for unprecedented co-operation between ministers, defence chiefs and law-makers in the capitals under a far-reaching plan to revive the Franco-German alliance.

The agreement, to be unveiled next week on the 40th anniversary of the Elysée Treaty of friendship between the two countries, will include plans to boost military co-operation and push for a full EU defence union with a security guarantee and pooled defence procurement resources.

The rapprochement is being watched with growing concern by the British Government, which fears its efforts to play a bigger role in the EU will suffer.

At a meeting in Paris, the German Chancellor, Gerhard Schröder, and the French President, Jacques Chirac, are expected to press ahead with moves to align legislation in areas such as civil and family law, and to harmonise educational qualifications and boost cultural links.

At the heart of their draft joint paper is a plan for a "general secretary for Franco-German co-operation" in each country. According to reports in the German paper Der Spiegel, ministers would be encouraged to attend each other's cabinet meetings.

The magazine said the leaders would propose closer co-ordination on European justice with the establishment of an EU crime register, an EU prosecution service and EU border police to fight illegal immigration. They are also expected to suggest establishing a European centre for international economics to formulate policy.

The new mood of Franco-German co-operation follows three years of deteriorating relations, during which Tony Blair succeeded in setting the EU agenda on important issues such as economic reform.

Mr Chirac and Mr Schröder have never been good friends. At a fractious summit during the German presidency of the EU in 1999, Mr Chirac undermined Mr Schröder's plan to curb the EU's farm budget.

While the enmity may not be forgotten, both politicians are displaying considerable pragmatism, knowing they have to deal with each other. Mr Chirac has been returned to office with more authority and without having to "cohabit" with a Socialist prime minister. Mr Schröder won last year's elections against the odds.

Mr Chirac and Mr Schröder will try to agree two papers: one on mutual co-operation, the other on the future of Europe, both due to be published next week. Some differences exist, with France unwilling to countenance sharing its permanent seat on the UN Security Council with Germany. But the crux of today's meeting will be whether the two can agree a joint platform on plans for the future of Europe, where there are big differences.

While France, like Britain, favours the creation of a powerful new president of the European Council, appointed by prime ministers, Germany wants to boost the powers of the president of the European Commission, by having the post elected by MEPs.

If a compromise can be reached, it is likely to set the agenda for a convention on the future of Europe.

One sceptical diplomat said yesterday that France and Germany "have not yet been able to narrow their differences".

Meanwhile, there was more ominous news for Britain when Italy won German support for an initiative to forge a common position among the six founding members of the EU on how it should work in the future – leaving London sidelined.