This has now been approved:

"European Union - The Council of Ministers unanimously approved on Wednesday the European Commission’s proposition to create a '.eu' domain name. European institutions as well as private users and corporations should benefit from the new domain, as it is expected to improve the Internet’s image and commercial infrastructure in Europe. Its organisation will be managed either by a non-profit institution, a private company, or an existing public administration. The domain name itself will be protected by the ICANN rules recommended by the World Organisation for Intellectual Property.
(Summary source(s): European Report, 05/06/00)"

From http://uk.iplanet.com/center/ecnews/markettrends/incentivewe.html

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