Schroeder accepts Berlusconi regret for Nazi jibe

German Chancellor Gerhard Schroeder said yesterday he had accepted Italian Prime Minister Silvio Berlusconi's regret for comparing a German lawmaker to a Nazi concentration camp guard and the incident was closed.

"He expressed regret for the choice of this expression and comparison. I explained to him that as far as I am concerned this ends the affair," Schroeder told a brief news conference after a telephone conversation with Mr Berlusconi.

Mr Schroeder had earlier demanded a full apology from Mr Berlusconi for remarks in the European Parliament on Wednesday he called "inappropriate and completely unacceptable".

Berlusconi's jibe tarnished Italy's presidency of the European Union on just its second day. Mr Berlusconi had earlier said he had not meant to cause offence but refused to apologise and accused Italy's left-wing opposition of setting up the row.

Mr Berlusconi's office said the Italian leader told Mr Schroeder he had been seriously offended in a debate in the European Parliament by criticism from German deputy Martin Schulz, a member of the chancellor's Social Democrats.

But he had also expressed "regret for the fact that someone could have misunderstood the meaning of a joke that was only meant to be ironic", the office said in a statement.

Mr Schulz, who accused the Italian billionaire of a conflict of interest between his political office and his extensive media empire, said he did not expect a personal apology for the Nazi slur but said Mr Berlusconi should apologise to the Parliament.

The German told N-TV in an interview he did not regret his criticism of Mr Berlusconi: "It wasn't provocation but rhetoric which is just the salt in the soup of parliamentarianism."

"If I have managed to show with my speech who we are really dealing with when it comes to Mr Berlusconi, that gratifies me."

Mr Schroeder said any further steps that might be taken over the affair were the responsibility of the European Parliament and said he hoped Italy's EU presidency would get back on track.

"Everybody must concentrate on making sure that Europe moves forward with its business," he said, noting that the bloc hoped to finalise a new constitution during Italy's presidency.

The row has raised the prospect of tension between the EU's governing institutions that could affect cooperation on policies including financial regulation, negotiations for a new EU constitution and immigration and asylum.

European Commission President Romano Prodi, a former Italian prime minister and past and potentially future political rival of Mr Berlusconi, avoided any comment on the furore.

But sources close to Mr Prodi said privately he had been "mortified" by the outburst. He is due in Rome today for a joint session of the Commission and Italian presidency.