Herman Van Rompuy, president of the European Council - which gathers EU heads of state and government - was forced to remove a discussion of the headline target 'education' from the agenda of the summit, scheduled for 25-26 March.
The move has angered European Commission President José Manuel Barroso who is insisting that skills are a key part of restoring competitiveness.
Wolfgang Reinhart, Europe minister for the German state of Baden-Württemberg, told EurActiv Germany that the decision to raise the issue was taken after a meeting in Brussels with Europe ministers from other German Länder.
The German federal system, Reinhart stressed, guarantees that the Länder retain their own competence on education and more EU involvement with the issue would create problems if applied in Germany.
Austria is also reluctant and is backing the German position, he said.
Van Rompuy respects the attitude of the German states because he also comes from a federal country, he added.
The reluctance of the 16 German states is backed by Berlin, Reinhart indicated, saying that the position had been confirmed to him by the Federal Chancellery. "So it is a common position and Germany is speaking with one voice," he said.
A decision regarding the education target will now more likely be taken in June or even October, Reinhart added.
Barroso defends education target
Barroso unveiled his 'Europe 2020' plans on 3 March, proposing a limited set of targets on employment, education, R&D and poverty reduction and "policy warnings" for EU countries that fail to meet them (EurActiv 03/03/10).
On education, the Commission proposed reducing the share of early school leavers from the current 15% to under 10% and making sure that at least 40% of youngsters have a degree or diploma.
Speaking at the launch of the Lisbon Scorecard - a report on how member states implemented the Lisbon Strategy for growth and jobs - Barroso offered a robust defence of the Europe 2020 education targets.
"Some countries say education is not an area of Commission competence but you cannot talk about competitiveness without speaking about skills, education and innovation," he said.
The Commission President insisted that the idea of "convergent education systems" was not on the agenda.
"This is not about harmonising education systems - we don't want that - it's about reducing the number of early schools leavers and boosting numbers in third level education," he said, adding that the arguments over subsidiarity do not hold water.
The row over education targets is the latest setback for the Commission's proposed 'Europe 2020' plans. Earlier this week, EU finance ministers rejected a target for spending 3% of GDP on research and development (R&D), demanding a new "outcome-oriented" measure of success instead (EurActiv 17/03/10).
Germany is also reluctant to see reporting on the 'Europe 2020' strategy done in conjunction with monitoring on the Stability and Growth Pact, which limits public deficits to 3% of GDP. Earlier this month, German Chancellor Angela Merkel expressed fears that closely linking the two would make fiscal surveillance "unnecessarily political" (EurActiv 03/03/10).