Malta today lost a bid to host the secretariat of the embryonic Mediterranean Union, which binds together the European Union and its southern Mediterranean neighbours.

EU and Mediterranean foreign ministers decided it will be based in Barcelona, the birthplace of what became known as the Barcelona process.

France initially indicated it would be happy to see the secretariat in Tunis, but critics said Tunisia's human rights record made it ineligible. Spain had promoted Barcelona but Malta, given its unique position in the heart of the Mediterranean also offered to host the new structure.

The decision was taken at a meeting of foreign ministers from the 43 EU and Mediterranean countries.

The Mediterranean Union is aimed at breathing new life into the the Barcelona process, and is meant to create a more equal dialogue between the wealthy EU and the poorer states that line the Mediterranean.

Questions remain about who should preside over the Union and how its projects should be funded.

A main aim of the 'Club Med' is to work on concrete projects for the region, including water, energy and education schemes, with each member state free to work on any programme it chooses.

EU foreign ministers yesterday also met to finalise their plans for establishing a balanced, closer cooperation with the United States. Maltese Foreign Affairs Minister Tonio Borg is seen above (second from left), next to British Foreign Secretary David Miliband.