France and Germany at odds over constitution

The French leader proposed to "improve the functioning of the [EU] institutions, starting from the framework of the existing treaties", according to press reports.

Mr Chirac singled out three areas where he wishes to see closer co-operation, "internal security and justice, external action and better involvement of national parliaments in the European decision-making process."

The French leader's demand for closer integration only in single policy areas covered by the EU constitution conflicts sharply with the line taken by German leader Angela Merkel, who seeks to relaunch the text in its entirety.

Ms Merkel in an interview with Der Spiegel reiterated her resistance against cherry-picking individual aspects of the text, saying that this would "seriously damage the overall balance," FAZ reports.

"To put single parts of this constitution into force, and leave others aside, without knowing where you want to go, that does not work," she was quoted as saying.

Social declaration

The German chancellor has instead proposed to attach a declaration on the "social dimension of Europe" to the failed EU constitution, in a bid to save the charter as a whole.

The proposal is seen as having been designed to soothe French voter's fears of job losses and the undermining of western European welfare standards by the bloc’s 2004 eastern enlargement, which played a large role in the French "no" to the constitution in last year’s referendum.

But Ms Merkel’s proposal was not mentioned by Mr Chirac in his speech on Tuesday, further highlighting the cleavage over the issue between Paris and Berlin.

Pioneer eurozone group

Instead, Mr Chirac tabled another proposal which is contrary to the Merkel government’s interests – the formation of a "pioneer group" of eurozone states.

"The member states of the eurozone have a natural vocation to deepen their political, economic, fiscal and social integration," the president stated.

Although politicians of Ms Merkel’s CDU party have championed similar "core Europe" ideas in the past, the idea runs contrary to the German chancellor’s ambition to improve relations with Britain and the new EU member states, which fall outside the eurozone.

Chirac and Fabius

Possibilities for the traditional French-German axis to overcome its differences over the constitution are limited, as Mr Chirac is bound to the French electorate's "no" to the charter.

Mr Chirac, who is seen as likely to seek re-election as a president in the 2007 elections, said he would "respect" the referendum outcome.

Pressure on the French leader not to alienate himself from his voters is likely to increase with the presidential candidature of Laurent Fabius, a socialist and former prime minister who succesfully campaigned on the "no" side.

Mr Fabius announced his bid for the French presidency on Tuesday, challenging other socialist candidates such as current socialist party leader Francois Hollande and Dominique Strauss-Kahn, a former finance minister.