UPDATE 2-Merkel confident EU treaty can be revived

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By Jan Lopatka and Lou Charbonneau

German Chancellor Angela Merkel said on Friday she was optimistic the European constitution could be revived despite hearing deep criticisms of the treaty during a meeting with Czech Prime Minister Mirek Topolanek.

Merkel is using the German EU presidency in the first half of this year to try to revive the document agreed by the bloc's governments, though rejected by voters in France and the Netherlands in 2005.

She aims to achieve an agreement by June on how to revive the treaty in some form by 2009. But several members, including the Czech Republic, want the document scrapped altogether and a new, simpler one drawn up to enable the EU to function effectively even after further possible enlargement.

"I found that the Prime Minister presented a very interesting framework for detailed discussions from which I can say that it is a good basis to begin our work and I am actually very satisfied," Merkel told a news conference during her first official visit to the Czech capital.

The constitution was meant to adjust the EU's decision making and institutions after rapid expansion from 15 to the current 27 members. It would have scrapped national vetoes in some areas and created a European foreign minister.

Merkel herself has been critical of the document, but has set the goal of laying out a so-called roadmap to revive the constitution -- instead of writing a completely new one -- during the German EU presidency.

Topolanek, echoing the criticisms of other EU countries who have panned the constitution, said the Union is not in crisis over the failure to adopt the treaty, and that economic and social reforms are just as pressing needs.

"I believe the document should be more readable, more understandable, more transparent, especially for European citizens," Topolanek said adding he welcomed the German initiative. He also stopped short of repeating earlier comments that the constitution document should be scrapped altogether.

Merkel, who agreed that the EU has other priorities as well, heard even stronger criticism of the constitution afterward at a dinner with President Vaclav Klaus, an outspoken opponent of closer European integration.

Klaus said that while the two agreed discussion was needed on a way forward in creating a treaty, they differed on whether this constitution was salvageable.

"The difference probably is that I do not think that it is possible to take these (steps) within the framework of today's text of the so-called European constitution," he told journalists.

"And I have to say I believe that Mrs Chancellor believes that it is possible."

Klaus, whose position as president is mainly ceremonial, has proposed creating a looser "Organisation of European States" to replace the EU.

So far 18 countries have ratified the treaty. Their representatives met in Madrid on Friday to declare the document cannot be buried due to the Dutch and French referendums. ((Writing by Alan Crosby, editing by Stephen Weeks; prague.newsroom@reuters.com; Reuters Messaging: alan.crosby.reuters.com@reuters.net; +420 224 190 477))

Keywords: EU MERKEL/

[PRAGUE/Reuters/Finance.cz]