Who leads the European Union? With 10 countries due to join in 2004, a constitutional convention under way and Europe struggling to find a voice on the world stage, the Union has never been in greater need of visionary leadership. But from whom?

The European Commission is a pale shadow of its former self, lacking the self-confidence and authority it enjoyed in the era of Jacques Delors. The six-month rotating presidency of the Council of Ministers is no longer taken seriously outside the EU, where governments complain about its constantly shifting priorities and personnel. Meanwhile the Franco-German alliance, which once provided informal leadership, is moribund: France and Germany have not launched a significant joint initiative since Jacques Chirac became French president in 1995.

But what of the European Council, where the heads of government and the Commission president are supposed to discuss strategy? This has become a bureaucratic circus, with many national delegations running to over a hundred officials. Adding 10 new members after enlargement can only make the situation worse. The prime ministers spend too long on technical questions that ministerial councils have failed to resolve. Their meetings often produce fine declarations, such as that on economic reform at Lisbon in 2000, but there is no effective mechanism for ensuring that prime ministers fulfil their promises.

The European Council should appoint a full-time chairman, to serve for up to five years - as do European commissioners and members of the European parliament. Someone with the standing of a former prime minister would be ideal. Three current prime ministers back the idea: Britain's Tony Blair, Spain's José Mara Aznar and Italy's Silvio Berlusconi. So do President Chirac, Valéry Giscard d'Estaing, president of the Convention, and Giuliano Amato, his deputy.

However, virtually none of the EU's smaller countries, nor the states that are preparing to join, like the idea. They believe that a European Council chairman would tip the balance of power within the EU in favour of the governments of big countries, against the Commission, which they see as their friend and protector. They fear this scheme is a ploy for the large countries to run the EU via an informal inner circle.

But that should not be the objective. The chairman's role should be to set the agenda for summit meetings, to focus the discussions and ensure that they tackle strategic issues. He or she would need to press national leaders to keep their promises, especially in areas where the Commission lacks authority, such as judicial co-operation, foreign policy and budgetary discipline.

Part of the job would be to speak for Europe to the rest of the world. Javier Solana, the High Representative, already does that - but he moves at the level of foreign ministers. Mr Solana has close contact with Colin Powell, US secretary of state, but does not have the clout to see President George W. Bush. It was Mr Blair, Mr Chirac and Gerhard Schröder, the German chancellor, who went to see the US and Russian presidents after September 11 2001; and rightly so, because the EU institutions lacked a leader of sufficient credibility.

Evidently, a European Council chairman would enjoy access in those capitals only if he or she had the confidence of EU prime ministers, a first-class international reputation and the ability to express a common position forcefully and eloquently. The more successful this chairman became, the less justification Mr Blair and Mr Chirac would have for their own solo diplomacy.

Critics of such a post claim that the chairman would become tied up in turf wars with the High Representative or the Commission president. However, many prime ministers get along fine with their foreign ministers. And while the High Representative would work full-time on the detail of foreign policy, there would be occasions when the EU needed a single voice at the highest level.

As for the relationship between the chairman and the Commission president, their roles would have to be precisely defined to minimise arguments between them. The European Council should set grand strategy and take the lead in foreign and defence policy. A strong Commission should work to implement that strategy and take the lead on internal issues, such as the single market, as well as external issues where it has a primary role, such as trade negotiations. But it should restrain its ambitions in foreign policy, where most governments want it to play a secondary role.

The smaller member states will not accept a European Council chairman unless they get something in return. They want to strengthen the role of the Brussels institutions and believe that if the European parliament had a role in choosing the Commission president, both bodies would gain some legitimacy. Messrs Aznar, Berlusconi, Blair and Chirac may have to pay that price if they want their chairman idea to fly. The EU would then have two strong leaders, a European Council chairman and a Commission president. The balance between the governments and the supranational institutions would be preserved. And the EU would have the leadership it so desperately needs.

Charles Grant is director of the Centre for European Reform.

Copyright CER 2002