Brussels  - The European Union should reward Serbia for the capture of war-crimes indictee Radovan Karadzic by implementing a deal on trade liberalization, the EU's top official said Wednesday during a visit of Serbian President Boris Tadic to Brussels.

And European Commission President Jose Manuel Barroso said that he believed Serbia could become a candidate for EU membership as early as in 2009 if it continues to bring in key reforms.

Describing the July capture of Karadzic as a "milestone" and a "historic moment," Barroso said "I think it should be acknowledged by implementing the trade-related parts" of a broader political deal which the EU and Serbia signed in the spring.

Berlin - European retail sales fell more than expected in July, according to data released on Wednesday, amid growing uncertainty about the prospects for Europe's economy.

Month-on-month retail sales in July fell by 0.4 per cent in the 15-member eurozone and dropped by 2.8 per cent on a yearly basis. However, analysts had expected retail sales in the eurozone to fall by a modest 0.2 per cent month on month and by 2.1 per cent year on year in July.

The fall in July followed a sharp drop in June with retail sales sliding 0.9 per cent month on month and 3.2 per cent year on year.

Brussels - Luxembourg Prime Minister Jean-Claude Juncker would agree to remain as head of the so-called Eurogroup when his second and theoretically final term of office runs out at the end of the year, he told a Luxembourg paper Wednesday.

"If all 15 finance ministers unanimously want to prolong my mandate, I won't be able to say no," Juncker told the Luxemburger Wort paper.

Juncker, who is also his country's finance minister, was elected to head the informal group of finance ministers from the countries which use the euro in 2004.

Warsaw  - Polish President Lech Kaczynski met with his Portuguese counterpart on Tuesday to discuss Georgia, Ukraine and the European Union's Lisbon Treaty.

Kaczynski said he was optimistic, along with Anibal Cavaco Silva, about the Lisbon Treaty's future, but stressed that Ireland must solve "its problem" on its own. Kaczynski added that his signature wasn't hindering the treaty's ratification, but it's the Irish no vote in a June referendum that's a hindrance.

Kaczynski also reaffirmed he was happy with the conclusions reached at Monday's EU summit on Georgia.

"I think either Nicolas Sarkozy's success in Moscow awaits us," Kaczynski said, "or the necessity to act further."

Munich - European broadcaster ProSiebenSat. 1, which owns a string of TV channels in Germany, Scandinavia and eastern Europe, is not putting them up for sale, a main owner said in a news interview published Tuesday.

Joerg Rockenhaeuser, who heads the German operations of private-equity investor Permira, dismissed suggestions that the TV company raise cash by selling channels.

"From the shareholder point of view, that wouldn't make any sense," he told the newspaper Sueddeutsche Zeitung.

Permira and another private-equity investor, KKR, control 88 per cent of Munich-based ProSiebenSat. 1, which in turn owns the Swedish-based group SBS. Earnings at ProSiebenSat. 1 have lagged amid high debt after the SBS takeover.

Vienna - Europe's declared goal to shift away from Russian oil and gas was always a challenge. It's even more difficult after Moscow's assault on Georgia, analysts say.

Georgia's strategic role as a pipeline transit country, run by a US-backed leadership that Moscow detests, formed the backdrop to the conflict that erupted in early August.

After Russian troops handed Georgian President Mikheil Saakashvili a humiliating battlefield defeat, the region's fragility and Moscow's clout are more obvious than ever. Monday's emergency EU summit on Georgia will not change that in the short term.