France takes helm of crisis-ridden European Union

(PARIS) - France took the helm of the European Union Tuesday with President Nicolas Sarkozy calling for profound change even as Poland plunged the bloc further into crisis by blocking a key reform treaty.

The Eiffel Tower in Paris was illuminated overnight with the blue and gold of the EU flag to mark the start of the six-month French presidency and Sarkozy spent an hour on national television explaining his priorities for the 27-nation bloc.

"Something isn't right. Something isn't right at all" with the EU, he said in the programme broadcast late Monday.

As if to underline his words, the news broke just a few hours later that Polish President Lech Kaczynski was refusing to sign the EU's so-called Lisbon Treaty in the wake of its rejection by Irish voters.

"For the moment, the question of the treaty is pointless," Kaczynski said in a newspaper interview.

The decision puts Kaczynski alongside his Czech and German counterparts in seeking to delay final ratification of the charter, which is aimed at streamlining EU decision-making as the bloc takes on new members.

It was another blow for Sarkozy who had been hoping to lead the European Union into a new era of strength and unity, before Ireland's referendum last month sent shockwaves across Europe.

"There have been errors in the way that Europe has been built," Sarkozy said in his interview on Monday night.

The European project has become a source of concern to citizens who are wondering whether national institutions can better protect them from the ill effects of globalisation than European ones, he said.

Calling such thinking a "step backward," Sarkozy said: "We must therefore profoundly change our way of building Europe."

The energetic leader who proclaimed "France is back in Europe" after winning elections last year, had hoped to be able to concentrate on five main areas during France's EU stint.

These are immigration, defence, energy and the environment, agriculture, and the most high-profile project: the July 13 launch of a new Union for the Mediterranean.

But his top priority will now be to salvage the Lisbon Treaty, he said Monday, adding that EU countries must continue ratifying the charter.

He noted that EU leaders had set the June 2009 European parliament elections as the deadline for approval of the treaty.

Sarkozy is due to travel to Ireland on July 11 to hear first hand the concerns of Irish voters, a day after he presents the priorities of the French EU presidency in an address to the EU parliament in Strasbourg.

EU leaders are to re-assess the fate of the treaty at a summit in October a which Irish Prime Minister Brian Cowen will present his ideas on the way forward.

Emphasising that the EU must address day-to-day concerns, Sarkozy said he would work for a Europe-wide cut in the value-added tax on restaurant bills and for a ceiling on the oil VAT to help consumers cope with soaring crude prices.

Sarkozy's proposal on the oil tax has received a cool reception from EU leaders, with German Chancellor Angela Merkel arguing that cutting VAT would do nothing to encourage a reduction in consumption.

Sarkozy also said he wanted to give tax breaks to encourage the green economy, from construction of energy-efficient houses to buying cars that are less polluting.

Later Monday, Sarkozy and Prime Minister Francois Fillon were due to hold working meetings with European Commission president Jose Manuel Barroso.