By David Brunnstrom
BRUSSELS, May 16 (Reuters) - The European Union executive will lay out its vision next week for a EU-Mediterranean Union but leave open where it will be based and who will head the initiative on the European side.
Time is running out for the EU to finalise the project if it is to be launched by France, the bloc's next president, at a summit in Paris on July 13.
French President Nicolas Sarkozy has scaled back his original plans for the union, meant to enhance political and economic ties, after Germany voiced fears it would split the EU and divert funds from elsewhere.
In March, EU leaders agreed to a limited form of union involving a regular summit between EU and Mediterranean leaders, with a joint presidency and a small secretariat.
France remains keen to see the first presidency of the new union go to an EU Mediterranean state and to see a permanent secretariat established in the region.
French officials say possibilities include EU state Malta, Morroco or Tunisia. They say Israel had also put itself forward, though this would likely provoke objections from Arab countries.
A proposal due to be adopted by the European Commission next week will endorse establishing a new secretariat, but is expected to state that this could be located "either in the EU or in a Mediterranean partner country", according to a preliminary draft seen by Reuters.
The draft also stresses that the project should encompass all 27 EU states and members and observers of an existing Euro-Mediterranean partnership, launched in 1995 in Barcelona, and dubbed the "Barcelona Process" in EU circles.
The latter are Mauritania, Morocco, Algeria, Tunisia, Libya, Egypt, Jordan, the Palestinian Authority, Israel, Lebanon, Syria, Turkey and Albania, as well as Croatia, Bosnia, Montenegro and Monaco.
LISBON AGENDA
While endorsing a co-presidency involving a representative of the Mediterranean side and the EU side, the Commission is expected to stress that the presidency on the European side must be compatible with the EU's Lisbon Treaty.
According to the Commission draft, this would mean that from entry into force of the treaty, expected next year, the EU would be represented by the president of the council of member states, the Commission and the high representative for foreign affairs.
It is not clear who would represent the EU side before the treaty takes effect. But diplomats say the Commission remains keen for practical and political reasons to see a permanent secretariat in Brussels, where it could exert most influence.
Syria, Libya and some other Arab countries have also appeared lukewarm over the project as it might suggest an indirect normalisation of their relations with Israel without any settlement of the Palestinian conflict.
French Foreign Minister Bernard Kouchner said this month that Egypt's President Hosni Mubarak could lead southern states in the new union.
In practice, the Union for the Mediterranean will be little more than a new political umbrella over the existing parnership.
At Germany's insistence, there will be no new EU money beyond the funds allocated for the Barcelona process. The Commission proposal says additional funds could be raised from the private sector, bilaterally from EU and Mediterranean states and from international financial institutions.
Sarkozy has dismissed fears the plan would tie EU states into a new, unwanted political corset, saying it would allow some states to work closely together and others to stay on the sidelines. (Additional reporting by Yves Clarisse, editing by Mark Trevelyan)
