EU leaders hold talks on Iraq

European Union leaders are meeting in Brussels for two days of talks on issues including Iraq, asylum and economic reform.

The summit, which will be attended by the 25 national leaders, also provides the first test of how EU leaders will react to the re-election of President Bush.

Speaking on Wednesday night, Tony Blair urged his continental counterparts to heal the divisions caused by the Iraq war and the fight against international terrorism.

"A world that is fractured, divided and uncertain must be brought together to fight this global terrorism in all its forms, and to recognise that it will not be defeated by military might alone but also by demonstrating the strength of our common values," he said.

European critics of the war have offered their congratulations to the re-elected US leader.

French president Jacques Chirac expressed his "heartiest congratulations" on the poll result.

"It is in a spirit of dialogue, esteem and mutual respect that our co-operation must continue to evolve, our common fight against terrorism and the joint actions which we are engaged in to promote liberty and democracy must continue to develop," he said.

But a key test for the EU will be how it responds to calls to play a greater role in Iraq ahead of the January elections.

The leaders will be joined by Iraq's prime minister Allawi for part of the talks.

As the prime minister prepared to travel to Brussels, his official spokesman said the leaders would be discussing how the EU could help stabilise Iraq.

"What the EU has been talking about is an action plan to help Iraq become a peaceful, independent and democratic state," he said.

"In particular they have looking at how they can provide practical assistance in areas like policing and rebuilding the infrastructure of the country.

"I have no doubt the prime minister will be discussing how to take those issues forward with his fellow European leaders in Brussels."

Economic reform

Also on the agenda will be efforts to secure the implementation of the Lisbon Agenda, which aims to enhance EU economic competitiveness.

The Conservatives said the EU was failing to "match words with deeds" on economic reform.

Graham Brady, shadow Europe minister, said a review of the plans had shown that "Europe will not meet its economic targets".

"The only countries who are performing are the Nordic countries and those outside the euro zone," he said.

"When is it going to occur to the EU that genuine reform is needed if Europe is to be a realistic competitor with the United States?

"The EU's action on the Lisbon agenda is a catalogue of failure.

"Tony Blair should stop comparing our economy with Europe's if he truly wants to emulate the growth and productivity seen in the US."

Home affairs

The third key issue on the agenda will be plans to enhance EU cooperation on justice and home affairs over the next five years.

This will include closer cooperation on asylum and immigration issues - a policy backed by the government but which has come under fire from the Tories and in the media.

Ahead of the talks, the Liberal Democrats said it was "sensible and pragmatic" to introduce majority voting on asylum and immigration.

"In a Europe of 25 countries, decisions have to be made by majority voting - otherwise no decisions will be made," said home affairs spokesman Mark Oaten.

"By removing the ability of a single EU member to veto these measures, a European solution to asylum stands a better chance of working.

"The Tories have long argued that Britain is burdened by asylum applications. It is therefore odd for them to oppose measures that could encourage other countries to play their part."