(BRUSSELS) - French President Nicolas Sarkozy will on Thursday unveil his pet project for a union of Mediterranean countries to EU leaders for the first time, a plan that has chilled France's relations with Germany.

Despite appearing to water down the idea to unite southern EU nations with Mediterranean rim partners to appease German Chancellor Angela Merkel, Sarkozy is likely to try to rally his EU partners around the vaguely outlined plan.

"I don't think the project will be abandoned entirely simply for reasons of public diplomacy, but of course there is that risk that it will be useless," warned Rosa Balfour, analyst at the European Policy Centre think-tank.

Sarkozy first raised the idea while campaigning for president last May. Turkey rejected it out of concern that it might be seen as an alternative to its EU membership hopes, which France opposes.

But in an effort to end months of discord with Berlin, he made concessions to ease Merkel's concerns that other EU nations would be excluded.

"We reached a compromise regarding the Mediterranean Union that we both want and that excludes no one," the French leader told reporters after an hour-long tete-a-tete with Merkel in Hanover, Germany last week.

"We are in agreement about the Mediterranean Union," she confirmed.

But despite this compromise, Merkel has still not decided whether to attend a summit on the project, with southern Mediterranean countries present, in Paris on July 13, just after France takes over the EU's rotating presidency.

Germany believes that France could be trying to use the project to counter the influence Berlin has gained since the EU expanded to encompass 10 mainly central European neighbours in 2004.

EU diplomats say the new Franco-German understanding could see other European nations rise up to voice the dissent that Berlin had, until recently, been doing so well in their place.

Britain and Scandinavian countries notably are "not happy with the project", Balfour said.

The working dinner between the 27 EU leaders in Brussels will be an opportunity for high-level discussion of a unilateral proposal that has been the subject of much speculation even though its outlines remain obscure.

"President Sarkozy's proposed Union for the Mediterranean has so far been poorly conceived and, to say the least, awkwardly presented politically," Michael Emerson at the Centre for European Policy Studies said in study paper.

"However this does not mean that nothing good can come of it," he said.

By employing a name more symbolic than the "Barcelona Process", he could exploit "an opportunity to rationalize and revitalise the EU's present set of policies toward the Mediterranean, which is stuck in a condition of laborious lethargy".

The Barcelona Process, launched in 1995 as a framework for political, economic and social ties, has regularly been thwarted in its aims by confrontations between Israel and the Arab countries taking part.

But a number of EU countries doubt the usefulness of creating a new structure for policies that already exist.

More importantly, many are concerned about how it would be financed and a unanimous vote would be required for EU funds to be used.

"That is the key bone of contention and I think Sarkozy would not manage to persuade his partners on that front," Balfour said.

Even if EU leaders do finally agree to this Mediterranean Union, it will still have to be sold to partner countries themselves, many of whom have only expressed polite interest up until now.

Text and Picture Copyright 2008 AFP. All other Copyright 2008 EUbusiness Ltd. All rights reserved. This material is intended solely for personal use. Any other reproduction, publication or redistribution of this material without the written agreement of the copyright owner is strictly forbidden and any breach of copyright will be considered actionable.