By Mark John

BERLIN, March 25 (Reuters) - European Union leaders will vow to start work on revamping the creaking institutions of the bloc at a 50th birthday summit on Sunday due to reach its climax with a noisy street party in once-divided Berlin.

Summit host Chancellor Angela Merkel will unveil a "Berlin Declaration" of EU values and achievements which she hopes will set the stage for a relaunch of the constitution rejected by French and Dutch voters in 2005.

But in a reflection of deep national divisions that remain about how to move forward, the broad, aspirational text makes no explicit reference to the charter and avoids mention of religion or any future enlargement -- one factor behind the "No" votes.

Public support for membership has declined in many of the 27 states because of fears the EU is failing to protect workers from the impact of globalisation, eroding national identities and meddling excessively in national affairs.

Yet German President Horst Koehler insisted a united Europe was taking shape under the noses of its leaders even as they wrangle over how to overhaul on unwieldy decision-making structures originally made for six founder states.

"Europe is finding its way back together in new constellations: British workers on Czech building sites, Romanian au pairs in Paris, Polish plumbers in London, Italian manufacturers in Hungary, German doctors in Stockholm," he told EU chiefs at a dinner on Saturday night.

"So why are we not doing much more to awaken people's curiosity about Europe and their enthusiasm for such co-existence, particularly among the young?" he asked.

STREET PARTIES

To mark the anniversary of the March 25, 1957 founding Treaty of Rome, festivities were being staged around Europe and Berlin is hosting two days of street parties, nightclub events and museums will host exhibitions into the evening.

Veteran rocker Joe Cocker will take to the stage on Sunday by the Brandenburg Gate, symbol of Europe's post-World War Two split before the 1989 fall of the Berlin Wall.

EU leaders attended more demure events on Saturday including a Beethoven concert and a slide show of images of the earth taken from space presented by German astronaut Thomas Reiter.

The two-page "Berlin Declaration", seen by Reuters, sets a 2009 deadline for giving the bloc a "renewed common basis" -- code for reforms meant to give the bloc a long-term president and foreign minister, a simpler decision-making system and more say for the European and national parliaments.

While all capitals have given their blessing to the text, Germany faces an uphill battle getting them to agree a "road map" on what happens next by the time it hands over its six-month presidency of the EU to Portugal in July.

Eurosceptical governments in Prague and Warsaw, as well as public opposition in Britain, the Netherlands and France, will hamper Merkel's efforts to launch new treaty negotiations.

Differences on the constitution could emerge at a lunch on Sunday where leaders will also pay homage to France's Jacques Chirac, making his last appearance at an EU summit before he bows out of politics after a four-decade career next month.

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