Britain and France set to clash over EU reform at summit

LONDON Thu Jan 30, 2014 7:08pm EST

1 of 2. Britain's Prime Minister David Cameron holds a news conference during a European Union leaders summit, in Brussels December 14, 2012.

Credit: Reuters/Eric Vidal

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LONDON (Reuters) - British Prime Minister David Cameron is set to clash with France's President Francois Hollande over how to reform the European Union on Friday, souring an Anglo-French summit aimed at deepening defence and energy cooperation.

The first Anglo-French summit since Hollande won power in May 2012 will announce joint investment in the latest phase of a combat drone scheme, cooperation on civil nuclear power research and an agreement on space and satellite technology.

But the real discussion begins later when, after the formal signing of defence and energy agreements, the leaders retire to a country pub close to Cameron's family home near Oxford in central England to air their differences over EU reforms.

Cameron wants to re-open European Union treaties to try to secure sweeping reforms to make the trade bloc more efficient - an agenda he hopes will both persuade euroskeptic voters to back him at a 2015 election and quell dissent within his party. He has promised a referendum on Britain's EU membership by 2017.

"I'm sure that as part of those discussions around EU reform over lunch, certainly the prime minister will be making the points he has around the importance of a more flexible, more competitive European Union," a British government official said.

But sources close to Hollande said this week that he was strongly against rewriting the treaties to suit Britain's domestic political agenda and that Cameron's push for deregulation was "toxic".

"Our interest is that the United Kingdom stays in Europe but that can't be achieved at the price of dismantling Europe," a source close to the French president said.

Two British officials said Cameron was optimistic of success in his overall drive to reform Europe, but added that it was natural for other EU members to have different views.

Britain says it has support for some of its renegotiation aims, such as a tightening of immigration policy, from states such as German and Austria.

DRONE DEVELOPMENT

The official focus of the summit will be on defence, where a 120 million pound ($197.96 million) feasibility study into the technology behind an Anglo-French combat drone project will be unveiled. The leaders are due to inspect a prototype of the drone at the summit venue, a military airfield.

No decisions were expected on which companies would be involved in the study.

The focus on defence stems from a 2010 Anglo-French pact signed that paved the way for a joint defence force as well as collaboration on drones and other military technology development.

Friday's summit is expected to announce a 500 million pound joint purchase of anti-ship missiles developed by MBDA, a consortium of BAE Systems, Airbus Group, and Italy's Finmeccanica.

An agreement was also expected to allow the early delivery of two Airbus A400M transporter planes to Britain.

A number of collaborations on satellite technology are also due to be unveiled alongside a program for sharing research on civil nuclear power.

That will include steps to involve small and medium sized British firms in the production of a nuclear power plant by French firm EDF at Hinkley point in Western England, the British officials said.

($1 = 0.6062 British pounds)

(Additional reporting by Julien Ponthus; Editing by Tom Heneghan)

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