ROME French President Nicolas Sarkozy arrived in Rome on Tuesday looking to end a row over North African immigration and ease tensions over a bid by France's Lactalis for Italian food group Parmalat.
Sarkozy, facing pressure on immigration from the far-right ahead of next year's presidential election, wants to agree a deal on tighter EU border controls with Italian Prime Minister Silvio Berlusconi before taking joint proposals to EU partners.
The visit follows deep discord over the issue between Paris and Rome, which have also been at odds over French takeover bids of Italian companies and over policy in Libya.
Just hours before the two leaders were due to give a news conference at 12:00 p.m. BST, dairy group Lactalis bid for Parmalat, a company Rome has declared to be of strategic importance to Italy's economy.
Sarkozy will welcome Italy's announcement late on Monday that its war planes will join France's and Britain's in bombing Libya, after previously playing only support roles but the meeting is expected to be a tense one.
France and Italy have accused the other of flouting the spirit of the Schengen treaty, which eliminates many border controls within the EU, as they grapple with a wave of migrants arriving in the wake of unrest across North Africa.
So far this year, around 25,000 migrants, most from France's former colony Tunisia, have arrived in southern Italy on small, overloaded fishing boats, creating a humanitarian emergency on the tiny island of Lampedusa where most of the boats landed.
Italy says it has been left to deal with the problem on its own while France has accused Rome of trying to escape its responsibilities by allowing illegal immigrants free transit across the border.
Italian officials said Sarkozy and Berlusconi would sign a joint letter to European Commission President Jose Manuel Barroso and European Council head Herman Van Rompuy seeking to tighten Schengen controls.
The letter will ask that the EU strengthen border control agency Frontex, step up development assistance to North African countries and allow member states to reimpose frontier controls in exceptional circumstances.
The two leaders may also discuss Bank of Italy Governor Mario Draghi's bid to succeed Jean-Claude Trichet at the head of the European Central Bank as well as a simmering row over a series of takeovers involving French and Italian companies.
The battle for Parmalat, Italy's biggest listed food group in which Lactalis has built a stake of 30 percent, has been most in focus but other deals involving luxury group Bulgari and power group Edison have also caused friction.
On Tuesday, as Italian banks were trying to form a consortium to bid for Parmalat, Lactalis said it was launching a bid valuing the company at 3.375 billion euros (2.9 billion pounds).
Economy Minister Giulio Tremonti has outlined plans for a strategic investment fund similar to one in France, which could invest in key sectors such as food, defence and energy.
Officials in Rome say Italy needs to protect its comparatively small number of large companies, which also support its many small firms, from foreign bidders.
Parmalat also has considerable political significance as a major buyer of milk from farmers who are a vital constituency for Berlusconi's coalition partners in the Northern League.
French officials say that cross-border investments between the two countries are relatively equal at about 30 billion euros, and they reject suggestions that French companies are doing anything untoward.
Italian suspicion also extends to the campaign fostered by Sarkozy against Libyan leader Muammar Gaddafi, with whom Berlusconi formerly cultivated close personal relations in part to favour Italian business interests.
Rome fears that Italian companies such as oil group Eni could lose out to French rivals after the fighting. (Writing by James Mackenzie; Editing by Louise Ireland)