Britain, France set to clash over EU reform plans at summit

Cameron and Hollande. Both leaders oppose Juncker.

British Prime Minister David Cameron is set to clash with France's President François Hollande over how to reform the European Union on Friday (31 January), souring an Anglo-French summit aimed at deepening defence and energy cooperation.

The first Anglo-French summit since Hollande won power in May 2012 will announce joint investment in the latest phase of a combat drone scheme, cooperation on civil nuclear power research and an agreement on space and satellite technology.

But the real discussion begins later when, after the formal signing of defence and energy agreements, the leaders retire to a country pub close to Cameron's family home near Oxford in central England to air their differences over EU reforms.

Cameron wants to re-open European Union treaties to try to secure sweeping reforms to make the trade bloc more efficient – an agenda he hopes will both persuade eurosceptic voters to back him at a 2015 election and quell dissent within his party. He has promised a referendum on Britain's EU membership by 2017.

"I'm sure that as part of those discussions around EU reform over lunch, certainly the prime minister will be making the points he has around the importance of a more flexible, more competitive European Union," a British government official said.

But sources close to Hollande said this week that he was strongly against rewriting the treaties to suit Britain's domestic political agenda and that Cameron's push for deregulation was "toxic".

"Our interest is that the United Kingdom stays in Europe but that can't be achieved at the price of dismantling Europe," a source close to the French president said.

Two British officials said Cameron was optimistic of success in his overall drive to reform Europe, but added that it was natural for other EU members to have different views.

Paris suspicious about Cameron's drive for EU 'simplification'

Britain says it has support for some of its renegotiation aims, such as a tightening of immigration policy, from states such as German and Austria.

But the UK’s systematic attack on free movement of people, which is a basic principle of the European Union, draws strong criticism in France.

“It is a non-negotiable issue, like the free movement of goods,” say sources close to the French president.

In addition, Cameron's calls for a “simplification” of EU regulations, is seen in Paris as a covert attempt at undermining existing EU laws.

“It was not about simplifying European rules but about removing all legislation on environment, social and food safety issues," French sources said. "If we do that, Europe will make no sense anymore”.

Despite those differences, keeping good communication channels with the UK continues to be crucial for Paris. The French president underlined that London’s hesitations about Europe are above all an internal British matter.

“There is a political and semantic obstacle in the word 'Europe' but the British government knows where its strategic goal lies,” Paris believes.

Drone development

The official focus of the summit will be on defence, where a 120 million pound ($197.96 million) feasibility study into the technology behind an Anglo-French combat drone project will be unveiled. The leaders are due to inspect a prototype of the drone at the summit venue, a military airfield.

No decisions were expected on which companies would be involved in the study.

The focus on defence stems from a 2010 Anglo-French pact signed that paved the way for a joint defence force as well as collaboration on drones and other military technology development.

Friday's summit is expected to announce a 500 million pound joint purchase of anti-ship missiles developed by MBDA, a consortium of BAE Systems, Airbus Group, and Italy's Finmeccanica.

An agreement was also expected to allow the early delivery of two Airbus A400M transporter planes to Britain.

A number of collaborations on satellite technology are also due to be unveiled alongside a programme for sharing research on civil nuclear power.

That will include steps to involve small and medium sized British firms in the production of a nuclear power plant by French firm EDF at Hinkley point in Western England, the British officials said.

Prime Minister David Cameron has promised Britons a clear in/out referendum on the UK’s EU membership if he was re-elected in 2015, based on a renegotiated EU treaty.

The sovereign debt crisis has accelerated economic and political integration between countries sharing the euro currency, and Cameron sees this as an opportunity to seek a "fresh settlement" with Europe.

German Chancellor Angela Merkel, for her part, is pushing for a new European treaty to achieve a fiscal union in the eurozone – and centralised EU oversight over national budgets.

Merkel believes a new treaty is also necessary to complete the EU’s banking union project, launched during the debt crisis to help stabilise the euro currency.

Seen from Berlin, a fiscal union is a prerequisite for considering any moves towards greater debt sharing – or eurobonds – being advocated by French President François Hollande.

Hollande for his part, believes political union should only be considered after the 2014 European election.

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