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EU 'on precipice' over Turkey

• Turkish PM: We will not compromise

• Austrians troubled by Turkey

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LUXEMBOURG -- Britain said the European Union was on the "edge of a precipice" on Monday over terms for historic membership talks with Turkey.

EU president Britain said it was no longer certain the talks would start at all on Monday. Austria was sticking to demands that the vast, poor, Muslim country be offered an alternative, less-than-full membership. Turkey said it angrily rejects any second-class status.

Diplomats told Reuters British Foreign Secretary Jack Straw had told the 24 other EU foreign ministers upon resuming talks after only a couple of hours' sleep: "Yes, we are near but we are also on the edge of a precipice.

"If we go the right way we reach the sunny uplands. If we go the wrong way, it could be catastrophic for the European Union."

Straw told reporters after a private meeting with Austrian Foreign Minister Ursula Plassnik and a telephone call with Turkish Foreign Minister Abdullah Gul he was not sure the talks would go ahead Monday.

"That is by no means certain," Straw said with Plassnik standing behind him. "We are at a difficult stage in these negotiations and I cannot say what the outcome will be." .

Diplomats told Reuters there were also problems between Turkey, on the one hand, and Greece and Cyprus, on the other, over a clause in the draft negotiating mandate demanding that Ankara not block the accession of EU states to international organizations and treaties.

Turkey was concerned the wording could give a divided Cyprus a lever to join the NATO defense alliance without a U.N.-brokered peace settlement on the Mediterranean island.

But the central problem remained Austria's insistence -- alone among the 25 EU nations, including Cyprus -- that Ankara be offered a status short of accession if it failed to meet the criteria or if the EU was unable to absorb it.

"We have had useful discussions with Austria, but there is still some way to go," Straw said.

Straw had urged that all member states had to fulfil their many promises to Turkey, a long-establish NATO member and strategic ally of America and Europe, British sources said.

He also warned that pulling the plug now risked widening the divide between the Christian and Muslim worlds, the UK's Press Association reported.

Turkish financial markets weakened on the uncertainty in Luxembourg, with the main share index down 2.3 percent and the lira down almost 1 percent against the dollar. Although there was no apparent markets panic, failure of talks could deal a longer term blow to political reform and foreign investment in Turkey.

Ankara, angered by Austria's intransigence, threatened to boycott's Monday's opening ceremony.

With Turkish Foreign Minister Abdullah Gul staying in Ankara awaiting an EU agreement on the negotiating mandate, the planned 5 p.m. (1500 GMT) opening ceremony seemed likely to be delayed. (Turkish PM: No compromise)

"We are not striving to begin negotiations no matter what, at any cost," Gul said in an interview published Sunday in Turkey's Yeni Safak newspaper. "If the problems aren't solved, then the negotiations won't begin."

Several ministers arriving for the talks were pessimistic. Denmark's Per Stig Moeller told Reuters: "It's a big problem."

A Turkish official told Reuters that nerves in Ankara were "extremely stretched ... Every minute that passes is making things more bitter and it won't be nice starting negotiations with all these bruises."

Outgoing German Foreign Minister Joschka Fischer warned his colleagues that Turkey might walk away if the EU watered down the terms on offer any further.

"If you want to open negotiations, you have to remember we have to have someone to open them with," a diplomat told Reuters he had told the meeting.

Cyprus issue

The EU has already angered many Turks by demanding that it recognize Cyprus soon and open its ports and airports to traffic from the divided Mediterranean island.

The European Parliament compounded Turkish ire last week by saying Turkey must recognize the 1915 killings of Armenians under Ottoman rule as an act of genocide before it can join the EU.

EU diplomats had hoped Austria would ease its stance after regional elections in Styria province Sunday. Chancellor Wolfgang Schuessel's People's Party lost power there for the first time since 1945 despite his brinkmanship on Turkey.

Schuessel has informally linked the Turkish issue to a demand that the EU open accession talks immediately with Austria's largely Roman Catholic neighbor, Croatia.

But those talks have been frozen until Zagreb satisfies U.N. war crimes prosecutor Carla del Ponte that it is cooperating fully in the hunt for a fugitive indicted ex-general.

Accepting the mostly poor, predominantly agricultural Turkey into the bloc has been met with resistance across the EU. Recent polls show a majority of French, German and Austrian voters oppose admitting Turkey, and a majority of Danes would rather see non-EU candidate, Ukraine, in the EU than an Islamic country.

Turkey has accepted unprecedented conditions to take part in the EU negotiations, including an open-ended halt to the movement of Turkish workers into the bloc.

Turkish immigration remains a thorny issue in many EU states and anti-Turkish sentiment figured in votes in the EU constitution in France and the Netherlands.

Austrians in particular have some deep-rooted historical mistrust of Turkey, seeing themselves as Europe's gatekeepers ever since they vanquished the Ottoman Turks in the 1683 Battle of Vienna. (Austrians troubled by Turkey)

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