Leaders of the European Union, meeting in Brussels last weekend, agreed to set up a broadly represented advisory body next March to draft recommendations for EU reform. The agreement marks another milestone on the road to an enlarged EU. Half a century following the creation of a common European market, the EU today is an economic superpower that will, in two weeks, have a single currency in a market of more than 300 million people. Euro notes and coins will go into circulation beginning in January. In 2004, the 15-nation union will likely have 10 more members, including former communist states of Eastern Europe.

The EU, however, faces many problems at home and abroad as it moves into a new age. Thrashing out those problems and drawing up a reform blueprint will be a key task of the advisory panel to be headed by former French President Giscard d'Estaing. Along with former German Chancellor Helmut Schmidt, d'Estaing last year called for steady efforts to "lay the groundwork" for further EU integration and expansion.

The former French leader contends that members in similar economic and social conditions should take the initiative for integration. He also maintains that membership should be extended initially to a selected group of countries, including the Czech Republic, and that entry applications from Turkey and other countries beyond should be considered in the future.

French President Jacques Chirac reportedly worked hard to get Mr. d'Estaing elected as head of the council -- a move that will likely accentuate France's contribution to European integration. The two men envision the EU as a looser federation of sovereign states, not a closely knit European federation, and call for a phased enlargement. British Prime Minister Tony Blair, who favors British entry into the European Monetary Union, also supports the realistic approach.

German Chancellor Gerhard Schroeder, keen to maintain the "Franco-German axis," appears to have relented in his bid to create a "federal Europe" and to expand markets through eastward enlargement. His moderation also appears to reflect a need to address domestic concerns that an expanded EU would sharply increase immigration from Eastern Europe.

The council will have as its two vice chairs former Belgian Prime Minister Jean-Luc Dehaene and former Italian Prime Minister Guiliani Amato. Belgium leads the smaller nations that aim to create a European federation through gradual surrender of sovereignty. Amato's selection could shore up the political fortune of European Commission President Romano Prodi, a former Italian prime minister.

The new panel, including government and parliamentary representatives from applicant countries, will have more than 100 members. It represents a democratic process of sorting out issues not familiar to EU citizens, such as organizational and institutional reforms. The 75-year-old d'Estaing will be required to deal flexibility with these issues, which touch the heart of national sovereignty. He will also need to demonstrate strong leadership to draft reforms tailored to the day-to-day needs of EU citizens.

Streamlining an increasingly complex EU organization -- an essential prerequisite to enlargement -- is also a daunting challenge, given a tangled web of national interests among the member states. The clash of national egos created turmoil at two previous summits -- in 1997 in Amsterdam and in 2000 in Nice. To avoid a repetition in Brussels, Belgian Prime Minister Guy Verhofstadt arranged a chairman's compromise that left conclusions to a later report.

That aside, the Brussels summit moved toward further cooperation in law enforcement with an agreement to set up a common system for issuing arrest warrants for terrorist suspects. EU leaders also gave the green light for a European rapid response unit, which will be ready for action beginning in 2002. As yet there is no unified military command system; troops from member states carry their national flags.

Meanwhile, as the United States goes it alone on various international issues, the importance of trilateral cooperation among Japan, the U.S. and Europe grows by the day. Earlier this month, on the 10th anniversary of Japan-EU regular consultations, the two sides agreed on a broad action plan calling for a decade of closer and wider cooperation through 2010. There is indeed much Japan and Europe can and should do, not only economically but politically as well. Environmental protection and refugee relief are but two important areas of cooperation.