EU and US to hold summit in Lisbon

The summit agenda remains to be agreed, but the US statement indicates the talks will focus on the financial crisis, foreign policy and security.

"Our economic relationship is vital to global prosperity and we are committed to co-operating to promote strong and sustained growth in our economies," it added. "We are united in our effort to protect our people and promote global security by combatting terrorism and preventing the proliferation of weapons of mass destruction."

The EU-Obama encounter comes after the White House embarrassed the then Spanish EU presidency earlier this year by canceling a summit in Madrid.

It is not a reward for Portugal or the EU's new Portuguese-born ambassador to Washington, however. "It's purely a matter of convenience as the Nato event was already being held there," an EU diplomatic source said.

Under the Lisbon Treaty, the Belgian Prime Minister, Yves Leterme, will not take part in the meeting on behalf of the Belgian EU presidency, because EU Council President Herman Van Rompuy is the new face of the EU abroad.

Constance Stelzenmuller, a Berlin-based analyst with the German Marshall Fund think-tank, said the economic agenda should take in banking regulation, the balance between economic stimulus and austerity after the financial crisis and the stability of the eurozone.

"The US has a continuing interest in Europe's political stability and future integration. These are a function of its economic health and of the euro's health," she said.

The International Crisis Group's Brussels-based expert, Alain Deletroz, urged the two sides to look at Kyrgyzstan alongside the top-line security concerns of Afghanistan, Iran and Pakistan.

"What we are seeing is that Kyrgyzstan is destabilising the whole region and there is no political will from anybody to engage," he said. "They [the US] are very frustrated with Europe because of its lack of will, lack of capabilities to position itself in the world. They don't want to be alone out there, but whenever something happens, the EU looks divided."

The larger Nato event, bringing together 28 leaders and, potentially, Russia's Dmitry Medvedev, will take place over two days on 19 and 20 November and will focus on Nato's internal reform.

The main item on the to-do list is the formal adoption of a new "Strategic Concept" - a 10-year plan for Nato development described by one Nato official as "a sort of Bible" and currently being drafted by the office of Nato secretary general Anders-Fogh Rasmussen

"We haven't decided yet whether to invite Russia. But the approval of the Strategic Concept will be of interest to them. We have also pressed the reset button with Russia and there are many issues to discuss," the Nato contact said.

Nato members will also talk about cutbacks in the military alliance.

The Nato command structure and agencies currently employ 15,500 people. The alliance costs €207.5 million a year to run, with a military budget of €1.2 billion for 2010 and an extra bill, this year, of €1.2 billion for a new headquarters in Brussels.

"All our members are looking at reducing their defence budgets after the financial crisis. This will have some repercussions on Nato," the source added.