Incoming Sarkozy and outgoing Blair to meet

PARIS, May 11 (Reuters) Nicolas Sarkozy and Tony Blair will meet today as the new French president prepares to take office and the British prime minister gets ready to leave after a decade in power.

Blair, who announced he would step down next month, took the unusual step of welcoming Sarkozy's election as president with a tribute delivered in French and posted on the YouTube web site.

''Of course, we don't always agree, as you know, but when we do, we can be a real force for good in Europe and across the world, and I think that with Nicolas Sarkozy as president there is a fantastic opportunity for Britain and France to work together in the years ahead,'' Blair said.

Rightist Sarkozy hailed British economic policy during his election campaign, praising Blair and saying France had much to learn from the actions of his Labour government.

The incoming and outgoing leaders' talks could focus on issues ranging from Europe to US relations, analysts said.

Blair, who is US President George W Bush's closest ally over Iraq, lost favour among voters at home for sending British forces to join the 2003 US led invasion.

US-French relations have been strained in recent years over the Iraq war, with France's outgoing president Jacques Chirac a leading European voice against the conflict.

Sarkozy has made a priority of repairing the damage. He pledged France's friendship with the United States in a speech after his election last Sunday, but said friendship meant ''accepting that one's friends can act differently''.

On Europe, Sarkozy is committed to a slimmed down, quick treaty modernising the EU's institutions to replace the more ambitious constitution which French and Dutch voters rejected in referendums in 2005.

Blair's likely successor, finance minister Gordon Brown, has criticised the EU as inward-looking, obsessed with its institutions and resistant to free trade and open markets.

German Chancellor Angela Merkel, who Sarkozy is to meet next week after officially assuming his functions as president, has made reviving the charter a priority of her EU presidency.

Blair is to meet Sarkozy around 5.30 pm (2100 hrs IST), after talks with Chirac.

During his presidential campaign, Sarkozy distanced himself from Blair over Iraq but said there was still plenty to admire.

''He is a man who counts in Europe,'' Sarkozy said in London earlier this year. ''It is not a question of grabbing hold of a model that isn't ours, but at the same time Tony Blair is a man whose pragmatism has served his country well.'' Reuters JK SBA VP0655