EU ministers at odds over energy and eastern projects

Unspent EU money normally goes back to the member states, proportionally to their contributions.

"2008 is over. You have to draw the line somewhere, otherwise in 2013 you'll still find unspent money from 2007 or 2008," a French diplomat told EUobserver.

One possibility discussed was to have a case-by-case approach - an idea floated by Austria - funding projects as they mature and become commercially viable. Another was to draw money in advance from the 2009 or 2010 envelopes.

"More work is needed for fine-tuning the list [of infrastructure projects]," Alexandr Vondra, the Czech EU presidency's Europe minister, said at a press conference.

The list of projects is designed to enhance energy security in the wake of the Russia-Ukraine gas row and to help stimulate EU economies at a time of financial crisis.

The commission last week increased the list from an initial €3.5 billion to €3.75, to include more money for France and Italy.

But commission president Jose Manuel Barroso and Czech Prime Minister Mirek Topolanek have failed to convince German chancellor Angela Merkel to agree. Ms Merkel said the EU aid "should not replace private sector investment," according to a Czech EU presidency statement.

France wary of eastern funding

EU external relations commissioner Benita Ferrero-Waldner on Monday also called on ministers to agree to an extra €350 million for the Eastern Partnership.

The new policy, to be launched at an EU summit in Prague in May, is designed to help Ukraine, Moldova, Georgia, Armenia and Azerbaijan come closer to the EU. Belarus may also be involved, if it resists Russian pressure to recognise Georgian rebels in Abkhazia and South Ossetia as independent states.

"After the Russian-Georgian war and the gas crisis, it has become evident that we have a crucial interest in the political and economic stability of these countries," Ms Waldner told press.

France was wary about allocating extra money to the scheme however, saying EU states had previously agreed to give two thirds of their so-called "neighbourhood policy" budget to Mediterranean countries in a "Mediterranean Union" scheme, and one third to East Partnership.

"We had decided on a two third-one third repartition," French foreign minister Bernard Kouchner said.

He added that the €15 million a year earmarked for each of the six eastern countries was "maybe a lot if you want to organise a conference, but not enough if you want to help an economy like Ukraine's which fell by 20 percent recently."

The French minister admitted that the recent Israel-Gaza war has complicated Mediterranean Union progress.

Franco-Czech sparks

Mr Kouchner also caused controversy with a proposal to include Turkey and Russia in some Eastern Partnership initiatives, so that Russia does not have "the impression that it is completely surrounded," as with NATO.

Czech foreign minister Karel Schwarzenberg responded to the idea with sarcasm. "We have nothing against a third country taking part in projects - not only Russia and Turkey, but maybe also Japan, the United States or China. Why not? We are open to co-operation with many countries," he told reporters.

Earlier on Monday, Mr Kouchner and Mr Schwarzenberg held a special press point to show that Franco-Czech relations were on fine form, despite a recent public row over French car protectionism.