Analysis - EU leaders heading for slow-motion train wreck

PARIS (Reuters) - Observing the build-up to this week's European Union summit, which is due to nominate the next president of the executive European Commission and draw up a policy agenda for the next five years, is like watching a slow-motion train wreck.

Two trains are rumbling towards each other - one driven by German Chancellor Angela Merkel with most of the 28 EU leaders aboard, the other by British Prime Minister David Cameron, with his few passengers trying discreetly to jump off.

Unless one of the locomotives veers onto another track at the last minute, they are headed for a collision, not over the policy agenda but over the choice of Jean-Claude Juncker, a veteran EU deal-broker, for the bloc's most powerful job.

Cameron insists he is the wrong man at the wrong time to head the commission, which proposes and enforces EU laws.

Neither side shows any sign of changing course, but there is still an outside chance someone may pull the emergency brake and postpone the showdown.

A crash at the summit that opens symbolically in Ypres, Belgium, by commemorating the millions who died in the trenches of World War One nearly a century ago, would have lasting consequences for the future of European integration.

Failure to junk Juncker, which Cameron is courting with his confrontational approach, could push Britain, the EU's third biggest economy and key military and diplomatic power along with France, closer to the bloc's exit door.

The prime minister has promised to negotiate far-reaching reforms of the EU before giving voters an in/out referendum on EU membership in 2017 if he is re-elected next year.

The anti-EU UK Independence Party and sceptics in his own Conservative party are bound to argue that if he cannot even block an "old guard" federalist as commission chief, he stands no chance of clawing back significant powers from Brussels.

His authority at home and abroad would be weakened, even if EU leaders gave Britain consolation prizes on business-friendly policies and a key commission post to oversee the reforms such as the internal market portfolio.

POWER GRAB

Appointing Juncker would be a victory for the European Parliament, which sought more power by having the main political groups put forward presidential candidates known as "Spitzenkandidaten" in last month's European elections.

Cameron says EU leaders should stand up for the principle that national governments are the prime source of democratic legitimacy in Europe and not let parliament usurp the power of nomination assigned to them by the EU's governing Lisbon treaty.

The treaty says only that leaders should take into account the election result in choosing their nominee, who has to be approved by a majority in parliament.

But that train has already left the station. To have had any chance of derailing it, Cameron would have had to sign up allies who were known to have misgivings, such as Merkel, a year ago - before the Spitzenkandidaten system was created.

EU ambassadors debated the perils of a parliamentary power grab at informal breakfast meetings last year, one participant said, but although they agreed to report their concerns to heads of government, EU leaders never acted on the issue.

In the end, Merkel and other national leaders went along with the choice of leading candidates by their own party families, attending the congresses that selected them.

They cannot go back on their word to voters now without causing a storm at home, as Merkel did when she tried to assuage Cameron by edging away from Juncker two days after the vote.

While the chancellor has stressed the importance she attaches to keeping Britain in the EU, she is keen to limit the political damage and avoid a conflict between Europe's institutions that could fester for months.

"Every time since the election that Merkel has tried to help Cameron, he went out the next day and lit an even bigger fire," an exasperated diplomat involved in summit preparations said.

"She even went to Sweden and sat in that photo opportunity in a rowing boat with him," the diplomat said.

EU diplomats sympathetic to London's constitutional arguments are perplexed by Cameron's tactics, such as a gloating tweet he sent when the opposition Labour party backed his rejection of the former Luxembourg prime minister.

"He has lost a lot of friends and goodwill by being so bullish," a longtime Brussels insider said. The Dutch and Swedish prime ministers have tiptoed away from the British camp, leaving Hungarian Prime Minister Viktor Orban, something of an authoritarian pariah in the EU, as Cameron's only firm ally.

If he is outvoted, as the EU's governing treaty permits although European Council decisions are normally taken by consensus, it will be "an index of Cameron's prestige and Britain's influence", the veteran diplomat said.

The outcome may also tilt the balance of power among EU institutions, giving parliament more influence and the big member states somewhat less sway over the commission than they wielded over Jose Manuel Barroso's executive in the last decade.

Lawmakers would miss no opportunity to remind Juncker who made him king.

Yet such a shift is unlikely to be dramatic because national governments hold most of the EU's power and financial resources.

Juncker, 59, a pillar of EU summits for a quarter-century and a crucial mediator between Germany and France on European monetary union, knows better than anyone that Europe cannot be governed against the big member states.

British officials brand him an "old-style federalist". But as former Belgium Prime Minister Guy Verhofstadt - himself blackballed by Britain for the EU job a decade ago - jokes, arguing that the commission president should not be a federalist is like saying that the next pope should not be a Catholic.

(Writing by Paul Taylor; Editing by Jonathan Oatis)