Merkel sets out Germany's EU programme

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German Chancellor Angela Merkel will set out her country's plans to revive the European Union's stalled constitution and work towards a common energy policy in a speech to the European Parliament in Strasbourg on Wednesday.

Merkel has sought to play down expectations for Germany's six-month presidency of the 27-nation bloc, aware that her ability to relaunch a Union in the political doldrums may hinge on factors beyond her control.

With French President Jacques Chirac and British Prime Minister Tony Blair set to leave office this year, Merkel has emerged as Europe's most influential leader.

But German officials say what she can achieve depends on who is elected French president on May 6, almost two years after French and Dutch voters stopped EU institutional reform in its tracks by rejecting the draft constitution in referendums.

"We all realise we can't go on with the current institutions, designed for a community of six, and we have to reform the system to cope with current and future enlargements," one Berlin policymaker said.

"But we face lots of political uncertainties -- in France, in Britain, Poland, the Czech Republic and the Netherlands."

Conservative French presidential candidate Nicolas Sarkozy wants to cut back the treaty to a few key reforms -- a long-term EU president and a foreign minister, a more democratic voting system and more power for national parliaments.

His Socialist opponent, Segolene Royal, whose party was split in the referendum, argues Europe must prove its value to citizens through practical economic and social projects before focusing again on institutional issues.

Britain, Poland and the Czech Republic, which promised referendums but never held them after the French and Dutch said no, have got cold feet about the treaty, diplomats say.

Behind the scenes, Germany is sounding them out on what would have to be removed from the treaty ratified by 18 member states so far to enable the remaining countries to endorse it preferably without holding referendums, the diplomats say.

"CONSTITUTION" EXCISED?

The aim is to agree in June on a timetable for producing an amended treaty with possibly some political guidelines on its content, which may entail dropping the word "constitution".

German officials said Merkel would outline plans to turn the 50th anniversary of the EU's founding Treaty of Rome in March into a major celebration with a Berlin declaration designed to showcase the achievements of the bloc and its common values.

Her aim is to create political momentum for reform while pressing ahead with a common energy policy built on ambitious goals for fighting climate change by reducing greenhouse gas emissions, saving energy and shifting to renewable fuels.

Germany's own left-right "grand coalition" is divided on energy, with the conservatives favouring nuclear power, which the Social Democrats have legislated to phase out.

The Environment Ministry said on Tuesday it would push for the EU to cut heat-trapping carbon dioxide emissions, blamed for global warming, by 30 percent by 2020 and would strive for a higher goal for Germany.

The executive European Commission outlined proposals for a common energy policy last week including proposals to force more competition in the sector, possibly by breaking up power giants such as Germany's E.ON and RWE and France's EdF.

Germany has muted its opposition to such a move and diplomats will be listening carefully to hear how Merkel plans to take forward the Commission proposals. ((editing by Alison Williams; Reuters Messaging: paul.taylor.reuters.com@reuters.net; +322 2876801))

Keywords: EU MERKEL/

[BRUSSELS/Reuters/Finance.cz]