No Permanent Feed Ban

European Union leaders agreed Friday to create a food safety agency to monitor health issues across the bloc and prevent a repeat of the "mad cow" scare sweeping the continent.

They also backed measures intended to calm consumer fears over the disease, but rejected a bid by Germany and Austria to extend indefinitely a six-month ban on the use of ground meat and bone in animal feed.

The independent European Food Authority should be up and running by the beginning of 2002.

The new agency will be based loosely on U.S. Food and Drug Administration, but won't have the FDA's sweeping powers to regulate food safety, since its recommendations will need approval from politicians.

The agency's creation reflects growing concern in Europe sparked by a rash of food scares including the mad cow crisis.

Mad cow, which began in Britain two decades ago, began stirring public concern two months ago with an increase in French cases and a scandal that tainted beef might have made it to supermarket shelves.

As panic spread, individual countries began erecting barriers to possibly tainted beef. Italy, Croatia and Egypt banned certain beef imports. Spain imposed its own ban on animal feed containing meat or bone meal. The Germans just discovered their first cases of the disease and have begun testing millions of cows.

Nowadays, reports CBS News Correspondent Tom Fenton, European farms look more like crime scenes as police block entrances and men in spacesuits decontaminate trucks that take cattle to the slaughterhouse.

In cattle, mad cow disease is known as bovine spongiform encephalopathy, or BSE. There have been close to 180,000 cases of BSE in Britain and 1,300 elsewhere in the European Union.

But what panics the public is that BSE can spread a human variant of the disease to people known as Creutzfeldt-Jakob disease, or CJD.

The disease leaves holes in the brain, leading to dementia and death. Scientists are still baffled by much that surrounds it. Experts believe CJD is caught by eating meat from infected cattle, but they are not sure. Once infected, a victim might go for five years, even a decade, without a clue until the disease develops.

The belief that diseased cattle could infect humans has hit sales of beef products hard. In France alone sales are down 40 percent. Beef prices across the European Union have slumped 5.9 percent because of a drop in demand.

There are no recorded cases of the animal or human form of the disease in America, but there may be cause for concern for some Americans, especially those who have lived in Britain and, given the current panic, perhaps in other parts of Europe as well.

The FDA has already banned blood donations from Americans who lived in Britain for more than six months from 1980 to 1996 because of the theoretical risk that CJD could be transmitted by blood.

That ban has cut blood donations in America by more than 2 percent a year.

American servicemembers in Europe could also be at risk. It wasn't until earlier this year that the Army banned all European beef from American bases.

At this stage, the leading culprit of mad cow disease is feed made from the powdered remains of other cattle.

A six-month ban on animal-based animal feed had been instituted Monday at a special meeting of EU agriculture ministers.

The ministers' rejection of a permanent ban was a blow for Germany, whose Chancellor Gerhard Schroeder told reporters Thursday an indefinite ban had already been adopted by all 15 leaders.

German Foreign Minister Joschka Fischer said a permanent ban was still a possibility.

"It's not off the table," he told reporters. "Reason will win through in the end."