Monday, May 24, 2004

Foreign ministers: some agreement, but not much


Sources: Bloomberg, AFP, Financial Times

News is only just beginning to drift out on the resolution of the foreign ministers' "emergency meeting" in Brussels today – the last-ditch attempt to resolve the major issues on the constitution before the summit on 17/18 June.

After what was clearly a marathon session – although relatively short by EU standards – some indications of the mood can be gained by the comment from Jack Straw when he emerged: "Predictions of success and weighing of odds are, I think, a pretty pointless exercise", he said. "These things are never over until they're over."

Irish foreign minister, Brian Cowen, is being pretty tight-lipped about the outcome, announcing that "Things are going as we planned them", telling reporters that he hoped to be able to produce a full text that would meet with agreement.

Pressed for more details, he refused to give any, saying that the "community method" – whatever that means - has to be given time to work. "It's not rocket science, but it's the way we work," he added. "It doesn't make front-page headlines in terms of no fisticuffs, but I can only tell you what the truth is. There is no point in having a melodrama."

Despite this, the Financial Times has done its best to talk up the meeting, with its headline, "Foreign Ministers bullish on EU treaty", but this does not seem to be wholly the case.

Spain and Poland seem to have indicated that they might be prepared to live with a "double majority" voting system on the Council. The second vote, based on a regime where countries representing sixty percent of the EU population, seems the consensus option.

However, it is also reported that Poland still has "some reservations" and Polish foreign minister Wlodzimierz Cimoszewicz, asked if changing the threshold figures would be enough, said: "It will be part of a solution, but it's not enough."

As part of the package, to offset the small countries loss of influence on the Council - and the commission - ministers also discussed raising the minimum number of seats in the European Parliament allotted to the smallest member states such as Malta, which currently has four.

No agreement on this was reached but there has been complete agreement on removing the proposal that the European Parliament should have the final say on the EU's annual budget.

There was no agreement at all on the question of God. The seven countries named in an earlier Blog have reaffirmed their commitment to demanding a reference to Christianity in the preamble of the constitution. But France is totally opposed to this proposition.

It would appear that the substantive issues on unanimous voting on tax, social security and foreign policy, also have not been resolved, so Britain's red lines are still under threat.

These and other outstanding issues – about which more will emerge when the Irish presidency issues its final, pre-summit draft of the constitution – will go to the summit in June, presided over by a Bertie Ahern who is anxious to see its success as the crowning achievement of his political career.

With the current arguments about the inclusion of Christianity in the preamble though, the outcome of this summit may be in God's hands than Ahern's. Whatever else, agreement cannot be that close or Cowan would have been chirping like a sparrow about his success.

An autonomous region of France?

Source: Deutsche Welle

Mario Monti is a busy man these days. Fresh from presiding over the shambles of EDF and Alstrom, and banning the Scottish Crofters Commission from supplying bulls for small farmers, today he was in Brandenburg, East Germany, to discuss future financial support for the region.

And, in contrast to the treatment of EDF and Alstom, it seems as if the money is about to dry up. With the accession of the eight former communist countries into the EU and after the expenditure of some 1.25 trillion euros, Eastern Germany is set to lose some of its reconstruction aid

Unsurprisingly, Brandenburg's premier Matthias Platzeck is less than impressed, complaining of difficulty of explaining the cutbacks to his people. Eastern Germany, he said, had been completely deindustrialized after the collapse of the GDR, and rebuilding the region was far from over.

But the main problem is uncertainty. No one has any idea how deep the cuts will be and all the commission will say is that it is conducting "a comprehensive review" of regional policy. But the essential problem remains that, with the latest round of enlargement, Eastern Germany is no longer among the poorest regions in the EU, even though unemployment stands at over 20 percent

Given the current behaviour of the commission though, it would seem the answer is obvious. Eastern Germany should declare itself an autonomous region of France, and watch the money roll in.

A plausible vision…

With a possibly rogue poll putting UKIP into third place ahead of the Lib-Dems in the Euro-election stakes, it is always nice to see someone else catch up.

This is all the more pleasing when it is the Daily Telegraph leader, with its clarion call to the Conservative Party. "The only way to choke off the UKIP advance", it intones, "is for one of the mainstream parties – which in effect means the Conservatives – to offer a plausible vision of a self-governing Britain".

That is precisely the line taken by this Blog, in several posts dealing with the priorities of the "no" campaign. In fact, long before this Blog started, we have argued that until and unless the Eurosceptic movement come up with that vision, the British public – however much they may dislike or distrust the EU, will always go for the status quo, for fear that the alternatives may be worse.

What applies to the Eurosceptic movement though also applies to the Conservatives – in spades. To make an electoral breakthrough in the general election, it must recover the million or so votes that in 1997 went to either the Referendum Party or UKIP and, in 2001 largely stayed at home.

Some of those voters may come out to play in the Euro-elections, and are happy to give the Conservatives a "kicking" by casting their vote for UKIP. But no one really believes that any such action is a vote of confidence for UKIP and its alternative policies – not least because it does not have the capability of creating credible alternatives.

The Telegraph, somewhat optimistically, argues that the Conservatives still have time – just – to offer the plausible vision before 10 June, but that is probably asking too much. Developing alternatives is a difficult and time-consuming business, more so in a polyglot party where Howard has to carry all wings of the party with him if he is to present the British public with a semblance of unity.

Furthermore, the actual resources devoted to working on alternatives, within the framework of the Party, are minuscule. To expect anything quickly would be entirely unrealistic.

If the voters do give Howard a "kicking" at the Euros, therefore, the best outcome would be that his Party will take the right message and devote some real resources to fulfilling the Telegraph’s injunction – offering a plausible vision of a self-governing Britain.

It pays to be French

In the wake of the bail-out of EDF, with its sham privatisation, another rescue plan is near completion, this time for the troubled engineering giant, Alstom. This is the company which, thanks to state aid, was able to bid competitively for the contract to build the huge new Cunard liner, the QM2.

EU competition commissioner Mario Monti and French finance minister Nicolas Sarkozy, it seems, are ready to stitch up a deal, which may be announced today. It will pump two billion euros into the company yet circumvent the EU’s state aid rules – although there is one remaining "sticking point" which neither side will disclose.

The rescue plan involves converting 800 million euros of Alstom debt into stock which will be bought up by the French government, giving it a 31.5 percent stake. The company is also expected to launch a share issue or debt-for-equity swap, which, under heavy pressure from Sarkozy, will be backed by a consortium of commercial banks.

As a token gesture to allow Monti to save face, Alstom will be required to forced to link with other, unspecified , competitors, and may have to sell assets.

According to Reuters, quoting a London-based analyst, "This has all been about political posturing. The EU wants to defend state aid rules and France wants to defend French business. They'll probably meet somewhere in the middle and may come up with something decent." Quelle surprise!

However, the company is far from out of the woods. Its shareholder equity has shrunk to less than one billion euros, compared to net debt of 4.5 billion euros in September or close to 10 billion euros including off-balance sheet liabilities. It is expected to post a net loss of around 1.1 billion euros for the just-ended business year on Wednesday, only slightly better than last year's record 1.38-billion-euro loss.

The contrast between Monti’s tolerance on Alstom and his directorate’s attitude to the scheme run by the Crofters Commission in Inverness - whereby the far-flung small farmers of the Scottish highlands and islands have been able to hire the services of top-quality bulls and rams to inseminate their cows and ewes – could not be more extreme.

As publicised in the Booker column yesterday, this "livestock improvement scheme" relies on modest public funding, and officials of Mario Monti directorate have ruled that it is in breach of "state aid rules", forcing it to close down. Clearly, in the EU game, it pays to be French.

"Europe will thank us" says Putin's adviser

On the whole it is unlikely that Europe will thank Russia for anything much, but Andrei Illarionov may be right in saying that the EU will one day realize that not signing the Kyoto Treaty is a very smart move and by effectively killing it off, Russia is saving the Europeans a great deal of unnecessary expense.

So far the interview with Illarionov in the Sunday Telegraph, who describes him as the second most powerful man in Russia seems unexceptionable. He is also completely reasonable in his argument that pollution can be countered only by a strong economy and rich country. Despite Liam Halligan’s rather silly comment about America being an arch polluter, it is quite clear that the the environment is in much better shape in the rich western world than anywhere else.

Russia, according to Mr Halligan is riding high, what with 8 per cent growth and higher oil prices. He also feeds Mr Illarionov with his lines reminding him that the American theory was that oil prices would go down as soon as Iraqi oil will start pumping. Somehow, neither of them gets round to mentioning that the reason that oil is not pumping is various organizations being determined to prevent that development by blowing up pipes and installations. How jolly for all of us, especially Sunday Telegraph journalists and Russian economists.

Russian economic indicators seem absolutely excellent and many people, including the EU, are impressed by President Putin, preferring to forget the slowly mounting offensive on free speech and the free press. The trouble is that economic indicators for the Soviet Union were good until the CIA managed to establish a surveillance system that told us all how poor the Soviet economic achievement was. In fact, that turned out to be an understatement – the situation was far worse.

The idea that human rights and freedom of speech are, while being a desideratum, somehow separate from economic achievement, is seriously flawed. Time and time again it was proved that apart from the moral argument, there is a practical one about freedom: how do you know whether those indicators are at all accurate when public criticism and discussion are being stifled?

Nor is it particularly healthy for an economy to rely entirely on the export of raw material. Oil prices are high at the moment but what will happen if those Iraqi wells do start pumping? And should we not ask ourselves whether Russia’s peace-loving attitude to the Iraqi war had anything to do with those calculations? Or, indeed, with the evidence that certain people not a million miles away from Putin’s cabinet profited from the fraud that surrounded the oil for food programme.

None of this bothers the EU or its leaders. The organization who wants to build a foreign policy entirely on moral foundations seems oblivious to all the problems. All they care about is Russian support for their own foolhardy determination to wreck various developed economies through the badly throught through, economically and scientifically unsound Kyoto Treaty. And there, Mr Illarionov has them where he wants them.

Sunday, May 23, 2004

Myth of the week

"The EU is becoming a centralised superstate"

The central administration – the EU Commission – is tiny, with fewer employees than Leeds City Council. Some superstate!

Richard Corbett MEP

The myth this week is by way of a rebuttal of a rebuttal. This issue here is not directly whether the EU is or is about to become a "superstate", but the rebuttal used many Europhiles to counter this claim.

Corbett’s claim, quoted above, is typical of the genre. It purports to show that the EU could neither be not become the fabled "superstate" simply because of the small number of staff employed by Community institutions – commonly cited as less than a medium-sized local authority.

Interestingly, as far back as 1975, during the referendum campaign, Margaret Thatcher herself had used this argument, pointing out that there were "only 7000 officials" working for the Commission, mainly in Brussels. In later years, this number crept up to "only 15,000 officials", then "only 18,000", then "only 22,000", then "only 25,000". Currently, with enlargement, the number is approaching 40,000 but it still remains less than work for many UK local authorities.

Nevertheless – as you would expect – the argument is specious. There are plenty of historical examples of very small numbers of people dominating large populations, not least the British Raj. While not directly comparable with the EU, it is nevertheless germane to note that, at the end of Queen Victoria’s reign, 300 million Indians were ruled by barely 1,500 British administrators of the Indian Civil Service, and perhaps 3,000 British officers in the Indian Army.

Excluding British soldiers, there were probably no more than 20,000 Britons engaged in running the whole country – fewer than the number of permanent officials currently employ-ed by the Commission. (Judd, Dennis [1996], Empire – The British Imperial Experience From 1765 To The Present. Harper Collins Publishers, London, pp. 79-80.)

However, referring to the actual number of employees of the Commission is misleading. On any given day in Brussels there are not only the officials of the Commission itself but also thousands of visiting national civil servants, from every country in the EU. They may work for the national representative offices, they may be on detachment to the commission or council, or they may simply be visiting for discussions – but they are all engaged in some way or another in the construction of the "project".

The commission, of course, is the "dynamo" of the project, spewing out directives and regulations by the thousands, now totalling over 97,000 pages, plus millions of pages of other documents. Looking at this output, common sense would tell you that such a small staff could not possibly achieve such levels of productivity. And, of course, it does not. The preparation of much legislation and many of the technical reports is contracted out, or otherwise farmed out to outside agencies, ranging from paid contractors, universities and other academic institutes, sympathetic think-tanks and even the growing legion of non-governmental organisations in the pay of the commission.

Much of the rest comes from other sources, ranging from civil servants of member states to an array of anonymous committees, made up from professional consultants and academics to environmental pressure groups, or commercially-funded lobbyists acting on behalf of a particular industry or company. It is estimated that there are 1600 such committees operating in Brussels, and beyond them 170,000 lobbyists of one kind or another across the EU, ranging from pan-European trade associations representing whole industries to the representatives of individual county councils pleading for a share in regional funding.

Once the legislation is produced, it must then be implemented – the task of national civil servants and agencies. And where policy domains like fisheries and agriculture are involved, the hundreds of thousands of civil servants working on these portfolios in the 25 member states are effectively working for the EU. For sure, they may be appointed by their member states, they write on paper bearing their own governments’ letterhead, and they are paid by the taxpayers of their own countries, but their activities and their functions are all dictated by Brussels. They are national civil servants in name only.

Thus, to say that 30 or even 40,000 Brussels bureaucrats are insufficient to run a "superstate" is completely to miss the point. They are only the tip of a huge iceberg. The real point is that "Brussels" acts as a nexus, the centre of a network, linking thousands of other organisations throughout the Community, not least the civil services of all the member states.

And that point was latterly acknowledged by Thatcher in her book Statecraft, published in 2002. She noted that the figure given for the commission staff – which by then had increased to 30,000 - "leaves out the much larger number of national officials whose tasks flow from European regulations". (Harper Collins, London, p. 324.) Those and the many others, amounting possibly to millions, directly or indirectly working for the project, are more than sufficient to run a "superstate".

And we still think we’re an independent country?

Early birds may well have caught the news that the EU’s commission is calling on the UK to introduce random breath tests to catch drink-drivers. As we all know, police at the moment can only demand a breath test if they have "reasonable suspicion" that a driver has been consuming alcohol.

So far, we have had a robust statement from the Home Office, which insists that random tests are not an efficient way of catching drink-drivers. It sees not need for them to be introduced. However – and here is the crunch - the president of Tispol, the European Traffic Police Network, said the commission would attempt to make its recommendation a directive if it is not followed.

Says Ad Hellemons, also Dutch Assistant Commissioner of Police, talking to BBC Radio Five Live Five: "This is the first time the European Commission has made such a recommendation. The vast majority of member states already carry out random breath tests. We can’t understand why governments would want to protect drink-drivers".

"The European Commission has made it clear that they expect this recommendation to be followed. If not they will try to make it a directive". There you have it – you will do as we "recommend", or we will make it compulsory.

However, there is even more to this than the headline story makes out. In fact, quietly and very much behind the scenes, the EU has been conducting wide-ranging studies on road traffic law enforcement.

Between 1998–2002, as part of the European fourth framework programme (DG TREND), information was gathered and assessed concerning police enforcement strategies and effects throughout Europe for the EU research project ESCAPE (Enhanced Safety Coming from Appropriate Police Enforcement).

This "ESCAPE" project was itself a follow-on from another EU project called GADGET, funded under the "4th Framework Programme project", with the sinister title of "Legal measures and enforcement". This and other EU projects "prepare the groundwork for implementing Europe-wide demonstration projects in enforcement".

For its powers, the EU is relying on the Maastricht treaty, which included an explicit requirement in the modified Article 75 that Common Transport Policy should also include measures to promote transport safety. That the commission intended to make use of this provision was flagged up in 1993 in an obscure commission paper, "The future development of the common transport policy", in which "road safety issues" were "recognised" as being a major health problem in the EU area.

At that time, however, the commission was not prepared to launch a programme on road safety and has left it for ten years before starting to make formal moves. This is absolutely typical of the way the EU works. As we earnestly discuss the next treaty, the last treaty but two is still not yet being fully implemented.

However, with the authority of the Maastricht Treaty behind it, slowly, steadily and insistently, the EU is moving towards taking over the whole of policy domain on road safety policy and law enforcement throughout the 25 member states, Britain included. Today’s story was only the tip of a huge iceberg, the outcome of which will be that, in the fullness of time, the Home Office - whether it likes it or it - is going to have to do as it is told.

And we still think we are an independent country?

Anyone wanting to read the full EU report, "Traffic enforcement in Europe: effects, measures, needs and future", click here. (Warning: pdf file – 138 pages long.)

The constitution crumbles

Booker's Notebook

"The yobs of Europe" shrieks Polly Toynbee, writing in The Guardian on the latest twists in the tale of the proposed EU constitution. The focus of her wrath are those "British hooligans", led by Jack Straw, who have been "breaking up the negotiating table".

Perhaps Ms Toynbee should not be blamed for displaying such ignorance since, as a good "little Englander", she has taken her view from the laughably parochial coverage given to this story by most of the British media.

The truth is that the bid to give the EU a constitution is in far more trouble than most people have yet realised; and the problems arise, not just from Mr Straw fighting for Britain's "red lines", but from almost everyone involved.

Last summer, when Giscard d'Estaing handed over his draft constitution to the heads of government, he warned them to approve it as it stood, because otherwise it might unravel completely - which is precisely what has happened.

Since the first talks on the draft foundered last December on the insistence by Spain and Poland that their voting rights must not be reduced, behind-the-scenes negotiations have thrown up more and more disagreements.

Reflecting this, the Irish presidency two weeks ago published 130 pages of amendments already agreed to Giscard's draft treaty, followed a week ago by 99 pages of new proposals.

Spain and Poland are still banging the table on voting rights, opposing German demands that a "qualified majority" must be reduced to only 55 per cent of the EU's population, which would give the Franco-German alliance the power to call the shots.

Poland's position is further complicated by the fact that its new prime minister, Marek Belka, recently lost a parliamentary confidence vote. This leaves him as a powerless lame duck until a general election in August, when he is likely to be replaced by a fiercely nationalist successor.

Hungary's "red line", contradicting one of Giscard's key proposals, is that each country must still have a commissioner. The Poles, Italians, Maltese and four other nationalities have laid down another on the inclusion of "God" in the constitution.

There are now proposals on the table for no fewer than three separate EU "presidents' - one for the Commission; another, according to a cumbersome troika formula, for the Council of Ministers; a third, chosen for two and a half years, for the European Council, which is now to be included in the treaty for the first time as a fully-fledged "Community institution" and as, in effect, the government of Europe. The council will also have the power to change the constitution without further treaties.

Compared with all this, the breaching of Mr Blair's own "red lines" over foreign policy and judicial law is little more than a sideshow.

The fact is that Giscard's draft is dead, and the prospects of having a constitution on which Mr Blair can hold his referendum look more distant by the day. The pity is that this may deprive us of that real national debate through which we could reflect on whether we wish to remain part of such a shambles at all.

Value for money

Give or take a few thousand quid, each MEP we elect costs the British taxpayer £1.2 million a year, in salary, expenses and overheads. Over the five years of a parliamentary term, therefore, each of the 87 individuals we send to the European parliament costs us £6 million – a grand total of £522 million. That is well over half a billion pounds, more even than the exorbitant £460 million cost of building the Scottish parliament.

For that money, one would expect something really first rate in return, so it was interesting to read, in the run-up to the Euro-elections, a 1500-word political interview in the Herald on Sunday, devoted to 30-year-old Catherine Stihler, Labour MEP

Penetrating the guff, however, is not easy. We learn that Stihler is a "bundle of energy", she will be running in the Edinburgh marathon on 13 June and she was told by she was told by her secondary school guidance teacher in second year that she was a born enthusiast. Not a lot for £6 million so far.

He main complaint, it seems is that "Inaccurate reporting leads people to think the EU is about straight bananas, triviality, rather than the nitty-gritty of THE work", (emphasis in the original) which leaves us all agog to hear more about THE work, nitty-gritty and all.

What we get from the Herald, though, is "Stihler is one of those people for whom the European project was created. She has a passion for legislating. Regulatory devices seem to course through her blood". Now there's a thing. But where’s the beef?

Well, for Stihler, "Europe is the means to ensure better working hours, better maternity and paternity leave, better food labelling, better access to drug treatments for multiple sclerosis sufferers. She paints a picture of a Brussels which benignly embraces betterness, and evangelically enthuses about the way it affects the day-to-day lives of Scots".

And now we get down to detail. "The MEP points to a packet of cigarettes at the next table, where a young woman is smoking. Her life has, in a way, already been bettered by Stihler. The packet no longer entices women with softening words like 'lite', 'ultra' or 'mild'. It has huge letters on it, with the type of dire health warning that could have come from Free Kirk copywriters."


But it gets better.

"Stihler lays claim to having taken on the formidable lobbying power of Big Tobacco and won. The legislative amendment she tabled and then spent two years pushing through the processes of Euro law-making allowed for the 25 EU member states to make the health warning more prominent, ban the 'lite; marketing ploys and force manufacturers to list their contents."

And even better.

"What comes next – and she seems gruesomely proud of this – is a proposed new move for cigarette packets in Britain to display graphic pictures of the havoc the evil weed wreaks on the human body. 'They’ll use whatever means necessary to get their perspective across,' she says, pledging to do likewise. Her spiel travels instantly to a visit to an Aids project in Kenya (another of her causes) where cigarettes were being given away free". "I’ll do everything I can to fight against the tobacco industry," she says.

And then?

"But for now, her battle is an uphill one with voters and their perception of Europe. It must surely be frustrating seeing the EU ignored or inaccurately reported by the UK media, but even that does not get Stihler down: 'When there is frustration, I look for a way forward and a solution to it. We have a unique situation in the UK, with the press we have. About 80% of what I read about the European Union has an inaccuracy in the story. That leads people to think the EU is about straight bananas, about the triviality, rather than the nitty-gritty of the work that goes on day-to-day.'"

And for the grand finale:

"The image of Europe has people asking ‘Why are you doing this, and why are you involved with that?’ Yet all of the good things that come out of the work we do on legislation is not heard. We have to do a better job of selling things and saying why we’re doing what we do, why it’s better for consumers and better for the quality of life you want to lead."

That, basically is it - £6 million on the hoof and all we get is gruesome pictures on our fag packets. Some deal.

Just for the record, it costs about £10 million a year to run a fully equipped infantry battalion. For the price of 87 MEPs, we could have had ten such battalions. No guesses which would have increased out influence more – and we could have had the gruesome pictures thrown in for nothing – if our own MPs had wanted them.

Russia offers Kyoto in return for WTO

President Putin has assured the world that there was no tit-for-tat agreement between the EU and Russia on support for entry into the WTO in return for signing of the Kyoto Treaty, so dear to the heart of the European Union.

On the other hand, he also told the world that the fact that the EU has agreed to support Russia’s membership of the WTO “cannot but have a positive effect on our attitude to Kyoto”. So, as they say, you pays your money and you takes your choice.

It does seem rather illogical that China, whose attitude to WTO rules is cavalier, to put it mildly, whose human rights record is considerably shoddier than Russia’s and whose internal market is almost entirely controlled by the state, should be a member of the WTO, while Russia, whose credentials are, of course, suspect, is left out. On what basis is one deemed to be more worthy than the other?

So what has the EU agreed with Russia when Pascal Lamy on all our behalf signed a deal with German Gref, the Russian Minister for Trade? (In parenthesis, let it be noted, that the EU signs international trade agreements and has no intention of giving up that right. People who say that we should negotiate this, that and the other, while remaining members of the European Union, do not seem to understand that.)

Russia will double internal prices on gas by 2010 but, as the BBC Russian Service analysis notes, those prices at present are somewhere around 20 per cent of west European ones. This undertaking is not going to hit Russia particularly hard, especially as Gazprom will retain its monopoly on gas exports.

The Russian telecommunications market will be demonopolized, though a compromise was reached on the position of the present monopoly, Rostelecom. Nothing much in that, as there are compromises on that subject in almost all of the EU member states.

Russia will go on protecting its agriculture (what there is of it) but lower average import duty on industrial goods. The payment on allowing the flight of planes over Siberia (a handy little earner) will be lowered and the rules that allow foreign investors into the Russian banking sector adjusted.

Not a lot there for the EU, who will now cautiously support Russia’s application to the WTO, though, presumably, before that becomes a general policy, it has to be decided at the Council of Ministers. Russia, in turn, will “move towards an acceptance of Kyoto”, over which, as President Putin said, there are serious misgivings.

Indeed there are. Putin’s economic adviser, Andrei Illarionov, who is more or less a free marketeer, is against it, as are the scientists who have already said that they were unimpressed by the science that undrpins it.

Who, one wonders, has gained more from the bargain?

Saturday, May 22, 2004

Sense and nonsense on the referendum

The actual referendum battle, as opposed to the battle to avoid a referendum, will involve many other issues. We had better start preparing ourselves. And that is, of course, what this blog is doing in its own way.

The referendum is still a long way off, if, indeed, it will ever take place. But the amount of nonsense spoken and written about it on both sides of the divide is quite astonishing. Given that a large proportion of the population is in the “don’t really know, not too sure, but will make up my mind at some later stage” category, this is becoming a serious problem.

Let us look at the “yes” side first, because their problems are easier to analyze. Take the, for instance (no music hall jokes, please). Earlier this week they had Polly Toynbee fulminating in her usual semi-ignorant and wholly arrogant fashion about the “British hooligans” who are causing trouble at the negotiations, beating up their opponents and refusing to come to any agreement on some “red lines” that she has clearly not given much thought to. Well, that’s Ms Toynbee, one might say. What would we do without her for entertainment?

Today, however (Saturday, May 22), the Guardian has a thoughtful leader, which acknowledges that “[b]ritain is not the only country whose objections are causing the current final drafting process to take longer than expected” but refuses in its usual anglo-centric fashion even to look at what it is that bothers other member states.

Instead it calls on the government to abandon its “David and Goliath” stance, presumably agree to whatever is that is required to produce a constitution and start campaigning for a “yes” vote. “Whether one agrees with last month's u-turn on the referendum or not, it is plain that the vote will only be won if the government gives a lead to all those others - opposition politicians, business leaders, workers' organisations, pressure groups and even newspaper editorial writers - who need to be mobilised if the current Eurosceptic majority in the country is to be turned around.”

What this thoughtful leader lacks is any analysis of what the constitution says or does or why the government should be asking for a “yes” vote. Why should the Eurosceptic majority be turned round? Just because it is a majority and whatever the vulgar majority wants must be wrong? Does the Guardian think that fighting for British interests or having Britain’s interests at heart is somehow ipso facto wrong, while other countries are fully entitled to fight for theirs? Do they think no country has a right to fight for its interests? Do they think that European integration and the creation of a single European state (superstate or otherwise) is such an absolute good that it must be pursued by whatever method it takes? If so, why do they not say so?

The problem with all the voices on the “yes” side or supposedly on the “yes” side is that they tend to blame others for not fighting the good fight but refusing to do so themselves. The Guardian, an influential publication, quite clearly still lives in a world when the word Eurosceptic invokes a frisson or horror in all right-minded, educated, politically sophisticated people. Alas, it is not so. The reason the “no” side has managed to make some headway is because it has produced a large number of substantive arguments against the constitution, the way it was concocted, the way it is being rammed down people’s throats (to use a vulgarism the Guardian and Ms Toynbee would probably shudder at) and, above all, against the whole ideology of the European unification.

If the government or the europhile media or, for that matter, business organizations and trade unions, old uncle Tom Cobbleigh and all, want to win the referendum vote, whenever that may happen, and want to win or, even, win back the hearts and minds of the British population, they had better stop behaving like the proverbial maiden aunt who hears a naughty word in her presence. You think we should support the constitution; you think we should vote “yes”; you think the Eurosceptics are wrong. Well, get in there and tell us why. Tell us what is right with that constitution, as it stands and why we must accept it.

So much for the “yes” side. Despite all that, despite all the intellectual advantages, the “no” side is crowing too soon. It seems to be spending too much time preening itself before the media and too little time marhalling arguments and looking at what might be termed the bigger picture (unlike this blog, naturally). It is good to have some parts of the media stating unambiguously why the constitution is wrong, why Blair is completely wrong in campaigning on an “in/out” ticket (if that is what he is doing) and, even, occasionally, why “out” is not such a frightening thing. It is good to have Gisela Stuart explaining to the left what was wrong with the Convention on the Future of Europe and with the constitution it produced (though, as we have already noted, it would be good if she could learn a few things beyond that). It is good to have Lord Blackwell write a pamphlet for the Centre for Policy Studies on what will happen if we vote no (nothing very much) and why we should, while we are at it, reform some of the clumsy and entirely wrong-headed EU policies.

Yet it is worth remembering that the other side has not started campaigning. When it does, it will marshall resources that are not available to the “no” side. It is very good to read in the press that the “No campaign” is ready to go into action as soon as the constitution is agreed on at the June Summit. But what if, as looks quite likely, it is not agreed on and negotiations will resume in the autumn for the December Summit? Will the “No campaign” take the manifestly sensible option of continuing its activity, strengthening the foundations and advancing the arguments in general? Or will it simply stop and say that as there is no constitution there can be no campaigning?

It is good to know that the glib, divisive and hard to explain slogan of “No to the Constitution, Yes to the EU” (or some such wording) has been abandoned in favour of “Vote No.” But is there a clear understanding that this campaign is going to be very different from the one against the euro?

The aim of the “No campaign” as it was fighting against the euro was very simple: to avoid a referendum. As long as there was no referendum, there was no euro. Given the famous opt-out and the equally famous promise extracted by Jimmy Goldsmith from both the main parties during the 1997 election not to go into EMU without a plebiscite, this was a clear and easily taken option. It was successful but largely because the “No campaign” had a powerful ally in the Chancellor of the Exchequer. For whatever reason, Gordon Brown, refused to say that the five spurious conditions that he attached to our entry had been met and, therefore, Britain could not take that last step and call a referendum.

The negative side of that concentration of effort was that the “No campaign” appeared to be manning a political Maginot line. The tanks of the EU came round the end of it and imposed a large number of laws and regulations on the City, business and the country in general, tying it all down without membership of the euro. The positive side is that we kept out of EMU and the economic black hole that is euroland. Together with the “no”votes in Denmark and Sweden the “No campaign” in Britain has ensured that the whole European project is looking distinctly battered. The argument of inevitability has not been heard for a long time.

However, the battle of the constitution is going to be fundamentally different. For one thing, there is no option about whether we have a referendum. If and when the constitution is agreed on, each member state will have to implement it. That means, given Blair’s statement on it, a referendum, whenever that is covenient to the government, which is, in itself, a difficult problem. Therefore, the methods used to prevent a referendum will not be entirely appropriate to a fight for a “no” vote in the referendum.

Furthermore, when it comes to the actual referendum, we shall not have the Chancellor on our side. At present the Cabinet is under instruction to fight as one body for the “yes” vote. Whether that will change or not, is unclear. It did in 1975. Nevertheless, if some ministers decide to fight for a “no” vote either while they remain ministers or after an enforced resignation, they will be fighting as individuals not as heads of ministries or great officers of the state. There is a basic difference there.

We shall, also, and this ought to go without saying but seems to have been forgotten, not have the great resources of the government, certain influential sections of the media and institutions of the EU, as well as leading politicians and personalities from other member states lining up, trying to convince the population that a “no” vote is harmful, retrogressive, nationalistic, xenophobic, evil, what-have-you. Will the “no” side be able to counter all that rapidly and accurately? Will it have the resources to spread its message far and wide as fast as possible?

Then there is the question of alternatives. When opposing the euro, alternatives are unnecessary. We already have an alternative, it has worked for many centuries and appears to be working well still – sterling. That is not a killer argument, as witness the destruction of imperial weights and measures but, coupled, with the economic problems in the eurozone and the very obvious inability to overcome these, single currency or no single currency, it worked. With the EU pushing ahead to a different level of integration, those who oppose it will be asked what alternatives they have and how viable these are.

A corollary of that will be the “in/out” argument. It is clear that the government is simply scaremongering by presenting the choice in those terms but scaremongering can work. The actual “No campaign” may say that its job is merely to tell people to reject the constitution because that does not mean we shall be out of the EU or even marginalized. But the wider “no” campaign has to work on alternative strategies for reforming the EU or, given that reforms do not seem to be on the agenda, for renegotiating agreements. (When talking of renegotiation it is important to ignore shrieks of horror on both sides of the divide. “Would you break a treaty?” is not a valid discussion point, as treaties are, be definition, renegotiable and doing so is not a crime like ethnic cleansing. On the other hand, those who get the vapours when they hear the word “renegotiation” and call all those advocating it traitors to the cause of Euroscepticism do not really know what they are talking about. Even announcing that you are pulling out of the EU involves renegotiation.)

Simply to say that we do not like what we have and want something else is not enough. We do need to clarify what we want and how we are going to get there. In other words, we need to work on what we should like to see as Britain’s foreign policy, defence policy, trade policy and so on. Then we, that is the wider “no” campaign need to put forward strategies of how we get from here to there. What methods do we use to repatriate the fisheries or agricultural policies, for instance. The Conservative Party has announced that it would do so. How? And what will it put in its place? If we do not want to be part of the common foreign and security policy, what do we want? And how are we going to achieve it?

Many in the “no” campaign will insist that all these points are irrelevant. I do not think so. The actual referendum battle, as opposed to the battle to avoid a referendum, will involve these and many other issues. We had better start preparing ourselves. And that is, of course, what this blog is doing in its own way.

Even the Guardian has noticed

Despite yesterday’s rant from Polly Toynbee in the pages of the Guardian, the self-same Guardian today offers a leader which observes that “Britain is not the only country whose objections are causing the current final drafting process to take longer than expected”.

But its main theme is to ask whether this government serious about fighting - and winning - a referendum on the constitution. “If it is”, observes the Guardian, “then it seems to be going a very peculiar way about it”.

It confirms that Blair “wants and expects to win a referendum campaign on a ‘Europe - In or Out?’ platform”, but it is plain that “the vote will only be won if the government gives a lead to all those others”… who need to be mobilised if the current Eurosceptic majority in the country is to be turned around”.

Yet, in the view of the Guardian, “not only is the government failing to provide a lead to the Yes forces in this country; it is also playing directly into the hands of the No campaign”. The main cause of its displeasure, though, is Jack Straw, who is charged with being “be happier for the current talks to fail and for there to be no constitution”.

“How else can one explain Mr Straw's present combination of tactics?”, it wails. “When he is in Brussels he digs in on an ever more detailed list of ‘red line’ issues, making too many mountains out of too many molehills. Then, coming home, he makes a Eurosceptic speech about the need to protect Thatcher-era employment laws…that can only play into the hands of the anti-European forces within British business and dismay British trade unions”.

“The official answer, of course, is that Mr Straw is in there fighting for British interests so that voters can have confidence that the constitution is a good deal for Britain. But this is surely a failed policy. The tactic of turning everything into a David and Goliath fight to preserve British interests, rattling the sword at home against the threat from dastardly foreigners, while wielding it against them abroad, is the tactic that has brought the pro-European cause in Britain to its current low ebb”.

Here the Guardian refers to the battle over the adoption of the convention of human rights, about which much mischief is being made between Labour and Tories. But, as always, the arguments have been reduced to soap opera level and focused on whether this will affect “employment rights”.

Ignoring the more fundamental issue of the implications of the Charter on the body of UK law, the Guardian pitches in to argue that, “To exaggerate the threat is to make the task of winning the European argument harder not easier. To do this on the issue of employment law, of all things, over provisions in part two of the constitution which not even the mildest left-of-centre voter would regard as anything other than reasonable, is particularly tragic”.

“What could have been an opportunity to put the case for Europe as the natural home for the reformed social democratic model pursued by Labour is turned instead into a misguided attempt to appease the unappeasable Eurosceptic press while at the same time pandering to the worst aspects of British business's infatuation with the American model”.

So speaks the Guardian – Anglo-centric, misinformed and anti-American. Whatever happens, Labour must not “attempt to appease the unappeasable Eurosceptic press”. Presumably, it should be attempting to appease the appeasable Eurosceptic press?

Another Houdini-like escape?

Sources: AFP and Datamonitor

The French government-owned electricity giant, Electricité de France (EDF) is currently appealing against a decision by the EU Commission that it must repay money obtained from the French state, by way of tax breaks, regarded as illegal state aid. The sum, including interest, comes to 1.2 billion euros.

Undeterred by this rap on the knuckles, however, the French government is now organising a partial privatisation of the company – in response to EU demands for "liberalisation" of the non-residential electricity market – which in fact is anything but.

The government, in a draft law before parliament, is seeking to change EDF's legal status from a nationalised industry to a joint-stock company, aiming to offer shares to the public next year. But the law setting up the deal prohibits more than fifty percent of the stock being released, although the government is likely to retain 60-65 percent.

As a welcome by-product, the sale of stock in the company – which is valued at 100 billion euros – will add 10-15 billion euros to its coffers, in addition to which it is being permitted to dump its crippling pension liabilities on the state. Even more bizarrely, under the draft law, existing EDF employees will retain their current civil servant status, with all the associated perks and, presumably, work practices restrictions.

The EU commission will probably take a dim view of these arrangements, and may consider yet another action against what is almost certainly another example of illegal state aid.

With the current fines as yet unpaid, however, and the French reputation for Houdini-like escapes from EU sanctions – not least Air France, the Bull computer company and, shortly, Alstrom - no one is prepared to bet that, in the end, EDF will not continue with its sham privatisation. And these are the people with whom Mr Blair wants to share our government?

Friday, May 21, 2004

Poland in the bad books

She hasn’t been in the EU a full month yet and already Poland is in the EU’s bad books – and not because of the way it wrecked the constitutional summit. On two counts, its government is under investigation for breaking Single Market rules.

The first relates to the restructuring of the steel company Huta Czestochowa SA, where the commission has its "doubts" that this was being "achieved without state aid." Huta is Poland's second biggest steel producer but has been plagued by financial difficulties and the Polish government is planning financial measures to restore the company. It is suspected of illegally writing off some of the company’s debts.

The other investigation concerns the government’s plans to sell 300,000 tons of wheat from internal security stocks to cut high grain prices. This breaches EU rules that require sales of more than 2,000 tons of grain from public stores to be agreed by the cereals management committee.

Poland is the first of the new accession states to receive such treatment from the commission, but there will undoubtedly be many more. The peoples of Central and Eastern Europe member states are fast getting a reality check on the ways of the EU. It can hardly add to the popularity of the organisation they have just joined.

Seven countries now back God

Source: AFP

Following the initiative by Poland to have a reference to Europe’s Christian traditions included in the preamble to the constitution, six more countries have now formally opted for God. They have joined Poland on the list of signatories to a letter demanding inclusion of a reference to Christianity. The countries are: Italy, Lithuania, Malta, Poland, Portugal, Czech Republic and Slovakia.

Even now, this list is not complete, and Poland is hoping that other countries will join the initiative. Spokesman Boguslaw Majewski (with a Christian name like that, he really ought to be an EU commissioner - ed) stated that the letter stressed that "the governments of those countries view as a priority mention of the Christian tradition in the preamble so as to begin discussion on the issue during the next meetings of the IGC."

Noticeably absent from the list is Ireland but, as long as his country holds the presidency, Ahern could not support this demand.

Is this the most stupid woman in Britain?

That was the title of an e-mail circulating a copy of Poly Toynbee’s latest column in The Guardian. Headed, "The yob of Europe", her thesis is that "The yobs of Europe are wrecking the new constitution, British hooligans breaking up the EU negotiating table again".

According to Toynbee, who of course writes from the comfort of her office many miles from Belgium, "after two days of talks this week, Jack Straw left a trail of fury. The Germans accused him of reopening resolved issues and ‘salami-slicing’ the whole document. The French were so angry they called for the process to be halted with a take-it-or-leave-it ultimatum. Perfidious Albion looked pretty pleased. Jack Straw hurried back to speak at a CBI banquet smirking with satisfaction…".

Yet, one does not have to be there to know this is wholly wrong. A review of the copious agency and media reports from the scene, with the help of a little insider information, would tell any dispassionate observer that Toynbee’s "take" on the situation was a crude invention.

But this is not another rant at journalists who, as has been pointed out to me, are a far too easy target (not that Toynbee is a journalist). Toynbee represents a strand of thinking in the Europhile establishment – typified by Stephen George’s book, "The Awkward Partner" - that always wants to present Britain in the worst possible light. She, like the others of her ilk, then projects her prejudices whenever the opportunity affords – this being a case in point.

The point at issue is that Mz Toynbee’s approach – as has been pointed out in previous blogs - is determinedly Ango-centric. The great Europhile is in fact a "little Englander" at heart, trapped in her tiny little world, unable, unwilling or – as the e-mail would have it – too stupid to see the bigger picture. That is what we are dealing with.

Nevertheless, a glimpse of that bigger picture comes with the latest communication from the Irish presidency, which in its own way, EU Observer is also determined to get wrong. Its headline is: "Tentative solutions on controversial voting system proposed", yet scrutiny of the Irish document reveals otherwise. Far from offering "solutions" the Irish presidency specifically states, yet again, that it "is not making a proposal at this time". It merely intends that "Ministers will have a general political discussion on the overall state of the negotiations".

And as to the detail, far from clarifying the situation, the document refers to yet more options for dealing with the vexed issue of voting rights, including the status of abstentions, and intriguingly, "the definition and operation of a blocking majority". These issues, as our readers will need no reminding, lie at the heart of the current round of negotiations – in which Britain is not a central player. And it is on their resolution that the constitution will survive or fall.

But it is worth re-emphasising that this current round of foreign ministers’ talks is the penultimate stage in the IGC process, when the issues should have been clarified, with the agenda being set for the final round of talks at the summit. If, at this stage, all the presidency is proposing are "general political discussions", then it is very clear that agreement on the crucial issues is a long way away.

There may be more huffing and puffing at the ministers’ meeting on Monday, and Toynbee or one of her Europhile clones may have another rant about "British hooligans", but the evidence is there in black and white. The summit is headed for the rocks, and it is nothing to do with the "Yobs of Europe".

Raising the game


Question Time on BBC 1 last night, dedicated to EU issues, had Patricia Hewitt, Blair’s trade and industry minister and chief groupie for the EU constitution. Offering what is clearly the "government line" on the constitution, she stated very clearly that the "basic issue" in the referendum (if we actually get one) is whether we are "in or out" of Europe. "In or out is the fundamental question".

This was picked up by Radio 4’s Today programme this morning, with a revealing analysis by Andrew Marr. He readily admitted that the government feels it must "scare" people into voting for the constitution by presenting a picture of the dire consequences of leaving. "If they (the voters) look at the detail of the constitution… the government feel they have very little chance of winning the referendum", quothe Marr.

Therein lies the fundamental dishonesty behind the government’s case. It boldly proclaims that it wants a debate on "Europe" but, in truth, the last thing Blair and his cronies want is that debate. The last thing the government wants is an informed populace, knowledgeable on the issues, and aware of the detail. Instead, they want a cowed, ignorant, mass, scared into submission by the thought of a Britain "isolated" on the fringes, running for succour to the comforting embrace of "Mother Europe".

Clearly, information is the antidote to this cloying, negative, patronising view of the British people, a nation of wimps who must be cosseted and comforted, and above all protected from the realities of that frightening world outside "Europe".

So saying, in the Question Time discussion last night, the possible alternatives to the EU were raised, and Hewitt got in first by dismissing the Norway option, this nation receiving its laws "by fax" from the EU, over which it had no part in making.

Hewitt does, in fact, have a point. As part of the EEA, Norway is obliged to obey single market rules, and is automatically required to implement laws from the EU, about which she is consulted, but has no vote. Frankly though, with only 13 percent of the vote in the Council, UK is not in a much better position, as it can easily be over-ruled under qualified majority voting, but that is not the point. In many respects, Norway out of the EU is not that much different from being in.

Nevertheless, Eurosceptics are fond of quoting the Norway option – as indeed they are the Swiss option – as an alternative to full EU membership. But neither are ideal and while they might suit those countries, are unlikely to be entirely suitable for the UK.

There are other options, such as walking away from any specific relationship with the EU and relying on the general rules of GATT to ensure fair trading. In the meantime, we could forge closer relationships with the Commonwealth, non-aligned LDC and perhaps the Cairns group, to form a powerful trading block, as a wedge between the protectionist forces of both the EU and the USA.

In other words, there are more options available than swapping the "pram" of EU membership for the "reins" of associate membership. If the issue is really a question of "in or out", then the options available must be explored more fully. The Eurosceptics must raise their game. While Marr reminded us at the end of his piece, "officially" the issue is not "in or out", the Hewitt comments clearly point to the government’s intended tactics. The "no" campaign must be prepared for them.

Spanish eyes – on the foreign minister post

While at the same time as pushing for a higher voting threshold to be written into the constitution, Spain's new socialist government is also first in line in a bid for its own man to fill the post of the all-powerful European Union foreign minister. It has fronted Javier Solana, currently "high representative" for the Union's common foreign and security policy.

As current arrangements stand, however, foreign affairs are run jointly by Solana, who reports to the European Council, and the external relations commissioner, Christopher Patten.

Should the current draft of the constitution be approved, the two jobs will be combined, with a vice-president of the commission presiding over the General Affairs and External Relations Council and running the EU’s diplomatic service. He (or she) will have the sole power to propose foreign policy initiatives, which will then be approved by qualified majority voting.

However, there will be a gap between the Patten standing down as extenral affairs commissioner – in October – and the new post coming available – which will not be until after the constitution is ratified. Therefore, a temporary replacement will have to be appointed to fill Patten’s job, while Solana will continue in his present post. The Spanish now want assurances that, when (if) the constitution is ratified, he will be able to step immediately into the combined job, and the external affairs commissioner will be dumped.

Meanwhile, recoiling from the latest demonstration of Spanish diplomacy – the refusal of Spain to allow cruise ships that have docked in Gibraltar then to visit Spain – Straw has issued a robust statement: "We regard the disruption of the cruise ships as completely unacceptable," he told a news conference held jointly with his Spanish counterpart, Miguel Angel Moratinos. "The solution is for the disruption to end," he added.

Nevertheless, there is no indication that Spain is going to back down or, having done so, will not continue harassing Gibraltarians in its attempt to take over the British colony. While its tactics to date have been unsuccessful, however, Spain’s hand will undoubtedly be strengthened if it has its man in charge of EU foreign policy, decided by QMV. No wonder it is so keen to pave the way for Solana to take the foreign minister post.

The problems we are still to take on

Another EU-Russia Summit is due to open tomorrow (Friday, May 21) in Moscow. This will be number 13 but, for some reason, there is marginally more optimism about this one than any of the previous ones.

Russia wants the EU to back its application for the WTO. The EU may well do so if Russia agrees to various demands to liberalize its internal energy pricing system and to reconstruct some of the natural resource monopolies such as Gazprom. Is that likely to happen? Well, one highly placed Kremlin source was heard to mutter that agreeing to the EU demands would be like death to Russia.

Then there is the Kyoto Protocol. For reasons best known to itself the EU is very keen on it, even though no reputable scientist thinks anything very much will come of it and a number of environmentalists, such as Björn Lomborg, have said that the money spent on it would be better spent on some genuinely useful project, such as trying to get clean water in many parts of the world.

The original aim was to set controls on the American economy. As the United States Congress refused to ratify the treaty, that idea went by the board. Russia, too, has so far refused to ratify it and two days ago a number of Russian scientists have made a statement decrying Kyoto as scientifically unsupported and harmful to the Russian economy. Of course, if the EU, in this case Prodi and Ahern, both on their way out as EU representatives for different reasons, supports Russia’s application to the WTO, who knows what might happen. Putin may well change his mind on Kyoto and, surprisingly enough, the Duma will probably follow.

However, Kyoto is on the sidelines and many observers think that the real dispute will be about the new members of the EU, specifically the Baltic states. Readers of the blog will remember that last time round, on April 27, Russia and the EU did come to an agreement and the friendship pact was extended to the new members.

It is expected that this time Russia will be less accomodating and will raise the issue of the Russian speakers in the Baltic states, having previously accepted that the EU protects the rights of linguistic, as well as other minorities.

Some Russian officials, in a clearly waggish mood have been heard to express the view that the Baltic states will now be a headache for the Brussels as well as Moscow – another thing they will have in common.

The problems we have taken on

Speaking as someone who knows a little about Eastern Europe and the former Soviet Union, I’d say that, when it comes to problems, the EU “ain’t seen nothing yet”.

Take the vexed question of former KGB agents still around and very active in the Baltic states, as well as some East European ones. What is to be done with them? Putting them on trial is tricky and the evidence is often lacking for obvious reasons. On the other hand, restricting their human rights would go counter to EU laws.

In the Latvian Seimas (Parliament) the right-wing majority has voted to publish the names of all the former Russian and Latvian agents. The left-wing and Russian opposition parties voted against, arguing that this would divide the nation. Possibly, though most observers feel that post-Communist societies could do with a spot of lustration to come to terms and then to overcome the past.

The Seimas also extended for another ten years a ban on former KGB employees running for elected national or local positions or other public appointments. However, they also had a look at the EU legislation and decided not to ban them for running for the European Parliament as the European Union might not allow such restrictions. This could be interesting

When is a computer monitor not a computer monitor?

As soon as it can be used to watch films or TV shows, which is increasingly often. Is that a problem? Well, yes, say customs officials. The EU imposes a 14 per cent import duty on consumer electronics in order to protect European TV manufacturers.

Computing equipment is shipped around the world without a duty. But the Dutch customs officials, together with the German and British ones, have decided that digital computer monitors that can be used as TV screens should have that import duty on them, as well. In fact, the Dutch have gone ahead and slapped it on. This caused shaking of heads and sucking of teeth, not because it is another tax – goodness me, no, but because the Dutch went alone, which is “simply unacceptable”, according to the director general of the European Information and Communication Technology Association, a lobbying group.

Alas, the obvious solution as far as the EU is concerned is to harmonize upwards. If the Dutch, or anyone else, want import duty on digital TV monitors, then everyone else should have one.

If passed, the rule will say that only those monitors that can be proved to be nothing but computer monitors will escape the duty. Once again, the EU, while spending much time and energy talking about the knowledge economy, is actually taking a step backwards in technology. As Bob Raikes, co-ordinator of a business group fighting the proposed duty, said to the International Herald Tribune: “Europe runs the risk of becoming an analog island, hanging on to kludgy technology while the rest of the world goes digital.” But, at least, it will be harmonized kludgy technology.

Thursday, May 20, 2004

God stays on the agenda

Sources: Trybuna, AFP and others

During the run-up to the December summit, "Nice or die" slogans were appearing in Poland, reflecting the determination of opposition parties to keep to the voting rights agreed at Nice. This staunch opposition to the new voting arrangements does much to explain why Lesek Miller refused to accept the deal offered in Brussels, and caused the summit to break up.

Now, a new slogan is appearing: "Preamble or death". No, this is not a threat to punish those who have not read the first part of the constitution; rather it supports the Polish Episcopate demand that a reference to the Christian heritage of Europe is entered in the constitution preamble.

In an attempt to defuse the situation, a group of Polish intellectuals has proposed that the reference be made in a separate declaration officially appended to the text of the constitution, but that has failed to satisfy the Bishops, even though the suggestion has been well received in Brussels.

Moreover, the Poles have been joined formally by Italy in writing to the Irish presidency concerning the inclusion of an official reference to Christianity. Support is expected from "perhaps more than a dozen" other countries. One of those is almost certainly Malta, and Spain also reported to be supporting the initiative.

The Irish government, now representing both the EU and its own largely Catholic country, is in the embarrassing position of having to turn God away from the constitution. But the issue simply refuses to go away. Despite his rough treatment there, Ahern must now wish he was back in Hungary.

Furthering European unity

Following in the wake of such luminaries as Ted Heath, former French president Valery Giscard d’Estaing and Tony Blair, European parliament president Pat Cox today received Charlemagne Prize for his services to "European unity" taking with him the "symbolic" 5,000 euro cash award.

The prize committee said Cox won the award "as recognition of the pioneering role played by the European Parliament in a critical phase in the development of Europe and also of his outstanding personal contribution in bringing about the enlargement of the Union".

This is the first time an EP president in office has been awarded a prize, and is perhaps a recognition of the role of the parliament in the integration process. It should serve as a reminder that, while this institution is effectively toothless in the traditional role of a parliament – controlling the executive – it is in fact a powerful driving force in the pursuit of European political integration.

That has been very much the case since 1979 when Alterio Spinelli was elected as an MEP in the first direct elections to the European parliament. He went on to set up what has become the EP’s constitutional affairs committee, and masterminded the production of the Draft Treat of the European Union in 1984. This served as the basis for the Single European Act and the Maastricht Treaty and elements of it are to be found in the current draft constitution.

Cox’s prize, therefore, should have special relevance for the coming Euro-elections – although few will understand the significance. The elections, portrayed as an opportunity for the "citizens" of Europe to elect their representatives, are actually a mechanism for salaried integrationalists to renew their season tickets on the gravy train, and advance the cause of the European "project".

Furthering the cause of European integration is, in fact, the true – if unspoken - role of the European parliament, and Cox’s Charlemagne prize is a timely reminder of that role.

An ironic situation


So Mr Blair and Herr Schröder met last night in Downing Street, with two items at the head of their agenda - the proposed EU constitution and plans for the handover of power in Iraq. The irony of this situation is almost unique and should not pass without comment.

On the one hand, there are these two great European leaders earnestly discussing the restoration of sovereignty to Iraq while, on the other hand, they are working out how to give what is left of their own to an unaccountable supranational government based in Brussels.

Half listening to Radio 4’s PM programme yesterday, as one does, I heard a pundit talking about handing over power to the provisional Iraqi government, and whether this would mean giving control of the jails to it. Said our man, “sovereignty is about authority”, the power to run things. That is about as neat a definition as I have heard, and is the crux of the issue on the constitution.

Both Blair and Schröder clearly recognise that, if Iraq is to be an independent nation, it must have the power to run things. It must have the authority to make decisions, and the power to make them stick. It must have sovereignty.

Why then, since these men are so clear about the meaning of sovereignty, are they so keen to give up their own, and why then, in seeking to do so, are they so keen to deny that which is undeniable – that that is what they are doing?

All we learn of the detail of the talks, however, is that the two leaders had a "positive and constructive exchange of views". Could perhaps they now have a similar "positive and constructive exchange of views" with their own populations, and explain why its is that what is deemed essential for the Iraqis should be denied to their own peoples?

A politician's learning curve

It is always pleasant and rather surprising to hear a politician announce that he or she has learnt something. So, it does seem rather churlish to suggest to a politician who has made this absolutely stunning announcement that now that they have started learning, perhaps they should carry on.

That is the way one feels about Gisela Stuart MP for Birmingham Edgbaston. Ms Stuart, famously, went to the Convention on the Future of Europe, as one of the British Parliamentary representatives and a confirmed supporter of the European project.

While there, she was so appalled by the high-handed behaviour of the Convention and its Praesidium, by the lack of democracy in the negotiations and the way the project was being advanced, by the refusal to listen to any but the most integrationist points of view, that she came back and wrote a pamphlet for the Fabian Society, in which she denounced the Convention and all its politicking.

She also made it clear that she opposed the existing draft of the EU Constitution, though she is not, as she says herself, against such a document per se, it being a good idea, in her opinion to delienate what is EU competence and what is national competence. Apparently, this cannot be achieved by straightforward treaties. Though to give Ms Stuart her due, she does want a great deal of power returned to the national parliaments. As she said in a speech she gave with a rather self-conscious political courage to the Bruges Group on May 19, “[i]f the ‘big beasts’ of politics can change their minds, it seems reasonable that others can, too. My own views on Europe have certainly altered, not least, as a result of my experience on the Convention on the Future of Europe.”

Several other things she said also made a lot of sense. She seems to think that politicians should read treaties they sign and advocate. She also thinks that people should read the constitution that will be imposed on them. And she expressed great pleasure at the thought that the Constitution will go to a referendum. There was a time when she was less pleased with the idea, stating that a referendum goes against parliamentary government but, presumably, she has changed her mind on that, too. And why not? The Prime Minister and his entire Cabinet have done so.

It is at this stage that one wishes that Ms Stuart would carry on with her admirable habit of leaning things. For instance, she should learn a bit more about EU legislation and the powers the Commission and the Council have over national parliaments. She should, perhaps, learn that scrutiny well or badly carried out is not the same as accountability or the right to legislate.

She is right to say that it is the fault of the politicians in Westminster that so little attention is paid to what is coming out of Brussels but wrong to suggest that if only they changed their way of working things would improve. Does she not know how decisions are taken in Council meetings and that European legislation cannot be rejected by Parliament? Apparently not and when informed of this fact during the discussion she took refuge in condescension.

Does she not know that EU legislation proceeds from the general to the particular and if the general is accepted, the particular cannot be defied? Apparently not, for all her experience with the Convention and its participants.

Does she not realize that the reason Parliament cannot think on the same timescale as the Commission in legislative terms is that we have these tiresome things, called elections?

Ms Stuart does not seem to have followed the latest twists and turns of the Constitution game and has paid scant attention to the historical facts, such as that the German economic miracle took place before the Common Market was formed. She has not read any of the arguments for Britain’ withdrawal from the EU or a radical new renegotiation of all the treaties; and has not looked at any of the alternative scenarios presented by people who have thought quite carefully about the subject.

In fact, all Ms Stuart has learned is that there was a lack of democracy in the way the EU Constitution was written and a certain lack of flexibility (her favourite word apparently) in which the EU model is being created.

There are numerous europhiles around, whom one could call perestroika europhiles in their constant hand-wringing about the many problems and the need to reform from within. Ms Stuart reminds one of somewhat different writers on the Soviet Union – those who maintained and still maintain, in the teeth of all evidence that Lenin was a very nice and humane man and it was Stalin who made communism unberable. But when a system goes so badly wrong, either with horrific results as in the Soviet Union, or merely depressing ones as in the EU, it is time, surely, to look at the basics.

Is this really our business?

“Europeans” are fond of castigating Americans for interfering with matters that are not their immediate concern in order to extend their power. (They are also fond of castigating Americans for not intervening – please note the slightly different verb – in matters of grave importance that the Europeans cannot or will not cope with.) And, of course, the EU has no designs on anything in the world, merely wanting to spread sweetness and light to all and sundry, except when there is a deal to be done with some nasty dictator.

So why is the EU thinking of taking on Nagorno-Karabakh, the disputed Armenian enclave on Azerbaijani territory, at present occupied by Armenian forces, as its special problem? The announcement was made after a visit to Brussels by the Azerbaijani President Ilkham Aliyev (not to be confused with the previous President Aliyev, who was our President Aliyev’s father and died in an American hospital not that long ago. And yes, they did have an election but somehow or other the acting President and son of the previous President won.)

At the moment the intractable problem of Nagorno-Karabakh seems to be looked at by the OSCE but the Azerbaijanis have accused that organization of taking a pro-Armenian line. The EU, having announced its Good Neighbourhood Policy [see previous blog] now feels it ought to move the peace process forward, even though, as Javier Solana has admitted in what must rank as one of the best understatements on the subject that “in reality there has been no noticeable improvement in the situation”.

The EU is apparently thinking of organizing tripartite talks between Armenia, Azerbaijan and Turkey that would involve the question of Nagorno-Karabakh and other regional matters, such as the opening up of the Turkish-Armenian border. Turkey had closed it down as a mark of solidarity with the Islamic popultion of Azerbaijan.

On the other hand, they seem to be supporting Azerbaijan’s position, that wants the withdrawal of Armenian forces, sent into Nagorno-Karbakh in the wake of a series of massacres there, rather than a wide settlement of various problems.

Quite a mess, all round, you might say, and the EU has so far not managed to distinguish itself in sorting out regional problems nearer home such as Moldova and Transdnestria. So, why are we taking on or pretending to take on this distant and immensely complicated problem?


On Monday, May 10, Lord Lamont of Lerwick asked Her Majesty’s Government to tell the House "What proportion of legislation put before Parliament in recent years has originated from the European Union." This is a remarkably important question.

The reply was a little surprising. Accroding to Baroness Amos, Lord President of the Council, there were no centrally held figures on this and the proportion varied from department to department, rising to eighty or more per cent, presumably, though she did not say this, in those that dealt with matters which were entirely EU competence.

Nevertheless, she added: "About half of all legislation with a significant impact on business, charities or the voluntary sector is introduced to implement European Union decisions with the proportion varying considerably from one policy area to another."

Then various facetious comments were made by peers out to sneer at Lord Lamont and Lord Stoddart who were trying to establish important constitutional matters. During all this, no attempt was made by the government to establish what proportion of legislation that does not have "a significant impact" (how is that measured, by the way?) comes from Brussels. And what of the EU Regulations that apply directly without having to go through national parliaments? Baroness Amos may not be aware of these.

To read the full debate click here.

Wednesday, May 19, 2004

Hungary enters the fray

Of the 25 member states involved in the constitutional IGC, one of countries of which we appear to have heard least is Hungary. But no more.

Hungarian premier Peter Medgyessy has told Bertie Ahern that he is "adamant" that the enlarged EU must have one commissioner per country. That drives a cart and horse through the Irish presidency’s "non-proposals" on reducing the number of commissioners, and adds to the list of countries with their own "red lines" which are preventing Ahern making a deal.

Ahern, in Hungary on yet another tour of EU capitals in search of a resolution of the constitution impasse, had said earlier in the day in Vienna that a larger Union could not indefinitely keep the unwieldy system of one commissioner per country.

Nevertheless, his plea was rejected by Medgyessy, who has also turned down the Irish compromise formula on voting rights, based on 55 percent of member states and 65 percent of the population needed to carry a decision by QMV. "We can only accept a parity system, namely that the number of countries and the size of the population have the same weight in the decision," Medgyessy said. "This is the only way to ensure that Europe does not become a Europe of the big countries."

There is an old joke about how you define a Hungarian. He is the man that enters a revolving door after you, and comes out in front. With Hungary pitching into the debate, Ahern must now feel that he is the man who went into the revolving door first. His chances of reaching a deal – already slim – are receding fast.

A non-denial

From the report of this morning's press briefing from the Prime Minister's Official Spokesman:

"Asked for a reaction to today's Telegraph report suggesting that our red lines on the European Constitution had been crossed, the Prime Minister's Official Spokesman (PMOS) said that as he had told journalists yesterday, we were in a real negotiation.

He drew their attention to the White Paper published last September which stated, "We will insist that unanimity remains for....key areas of criminal procedural law" (paragraph 66). Habeas corpus, trial by jury and the like were key areas of the criminal justice system and would not be changed. That was our bottom line. The particular route which the Constitution ultimately went down was a matter for negotiation".

There it is, that word "key" again. "We will insist than unanimity remains for ... key areas...". In other words, Blair is prepared to accept QMV for "non-key" areas of criminal procedural law.

In the Telegraph report this morning, Ambrose Evans-Pritchard claimed that the government had signalled that it was "willing to breach" the first of its "red lines" by agreeing to cede Britain's veto over sensitive areas of criminal justice.

He mentions Article III-171 in the draft constitution, as amended by the Irish presidency, which gives powers to the Council, inter alia, "to approximate criminal legislation to ensure the effective implementation of a Union policy in an area which has been subject to harmonisation measures".

If the harmonisation measures in question were adopted by QMV, then the "approximation" - i.e., harmonisation - of criminal law is also adopted by QMV.

Nothing in the PMOS's statement actually constitutes a specific denial that the goverment is not ceding this power to the EU. It all depends on what you mean by the word key. In view of the PMOS's evasion, however, the implications are that Article III-171 has been accepted - in principle, at least.

One rule for them...

EU clears $3.65B in aid to German coal

According to the Associated Press, the EU Commission has just approved Germany's plan to spend more than $3.65 billion to support its coal industry for 2004. "The aid is compatible with the proper functioning of the common market," a spokesman said.

Almost all of the aid — $3.6 billion will go to one German firm: RAG AG. Dr. A Schaefer Bergbau GmbH will received $1.2 million while Bergwerksgesellschaft Merchweiler GmbH will get $6.1 million.

The aid is part of Germany's plans to gradually reduce production. It includes funds to cover the difference between production costs and selling prices, the costs of running the mines and money to cover exceptional costs arising from the industry's restructuring.

Of course, state aid is illegal under EU law... unless it happens to be the German coal industry, Air France, Alstrom... Then, miraculously, it becomes "compatible with the proper functioning of the single market", and turns out to be legal after all!

Here we go again ... and again

Another summit coming up, another row with Spain, which could be simply a coincidence. As the world media (in so far as it can be bothered to pay attention to the somewhat overwrought debates at the Foreign Ministers’ Council) wrings its hands over the lack of progress in negotiations about the text of the forthcoming constitution; as France, Germany and Britain go through their ritual dance of “Britain is the odd man out” despite Jack Straw clearly being prepared to abandon at least one “red line” and equally clearly staying out of the real discussions while popping up whenever there are journalists around; as the Scandinavians gear up to their own fight … up pops Spain.

This time the attack is indirect. In December, as most of us will recall, Spain under Prime Minister Aznar helped to bring about a stalemate by fighting for what it saw as its rightful number of votes in the Council. Since then we have had the Madrid bombs the surprise victory by Zapatero and the supposed great reversal in foreign politics.

Except that we clearly have not had anything of the kind, reversal that is. All Zapatero has done is to pull Spanish troops out of Iraq, a move to which the Spanish military have reacted ambivalently.

When it comes to dealing with its neighbours Spain remains Spain. Three weeks ago the new Spanish government ordered port authorities in Barcelona, Cadiz, Malaga and Tarragona to ban non-EU registered cruise ships that had berthed in Gibraltar to enter the ports. Their supposed justification is that there is an EU cabotage or freight regulation that allows non-EU ships to stop at only one EU port.

This regulation quite clearly applies to freight and not passenger cruises. Equally clearly tiny but rather stubborn Gibraltar relies on cruise ships and visitors rather heavily for income. One wonders, though not too much, why the Spanish authorities have decided to invoke this rule so inappropriately, just before crucial negotiations within the EU?

In fact, the Spanish may well find that not only Gibraltar and Britain are annoyed. The most recent ship that was denied docking is the Dutch registered Prinsendam. Spain is clearly breaking various EU rules, including one that says that EU citizens can travel anywhere they like within the EU.

Spanish reaction has been mixed. First they announced that this was a bureaucratic mistake, results of a rule left over from the last government. (When in doubt, blame your predecessor.) But the directive was issued three weeks ago. Even if it was simply an old directive re-issued by mistake, three weeks is quite long enough to revoke it. Then there was the story about the freight rules but as these are passenger ships and EU registered, that cannot possibly apply.

One can but wonder what concessions the Spanish government will demand in the constitutional dust-up that is likely to continue to June 18 (Waterloo Day, which is also something Spain might remember).

Making (non)sense of Europe

The BBC, helpfully, has been running a series on the Constitution, entitled "Making Sense of Europe". Its Europe correspondent Tim Franks has been looking at what the text of the constitution means and, in the third of his series he asks: “has it made Europe easier to understand?”.

Amongst the gems this man is offering, he asks, rhetorically of course, "Why do we need a new constitution for the European Union?" The answer he provides is almost a parody, such a complete distortion of the truth that it is almost comical. According to Mr Tim Franks,

"The idea goes back nearly three years - to a meeting of the EU member states where they decided that something had to be done about the disaffection that the union was increasingly held in. The plan was to bring Europe closer to the people - to make it more transparent and democratic".

This is the great, the wise and all-knowing BBC. Is that the best they can do? For the real story of the background to the constitution, click here.

End game in sight?


One can applaud the Daily Telegraph this morning for at last taking the foreign ministers’ meeting seriously – the only newspaper to elevate the story to its front page, displacing the news on the Olympic games shortlist. And congratulations to Ambrose Evans-Pritchard for picking up that which all the others seem to have missed – that Straw is preparing to give up some of his "red lines".

His article today is a graphic example of how, when dealing with EU politics, the devil is in the detail, the subtle nuances of word and expression that give the game away.

Thus does Ambrose spot Straw’s statement - there would be no deal unless Britain got its way: "If we do not get the key red lines..." we won’t sign up for the treaty – and contrast it with EU officials’ observations that Straw had referred to key red lines, taking it to mean that lesser red lines could be rubbed away. This is journalism at its best.

Many people will also applaud the Telegraph’s editorial, which argues that Straw is softening us up for the constitution: "You can always tell when a British minister is about to sell us down the river in Europe: he first wraps himself in the flag. Jack Straw was at it again… 'battling for Britain'..." as he prepares to give away the veto on criminal justice harmonisation.

Once again, though, this analysis is narrowly Anglo-centric, and misses the bigger picture. Much as the British media are determined to paint these negotiations as "Britain versus the rest", something with which Fischer and Barnier seem happy to fall in, there is a lot more going on than just the spat with Britain.

Oddly enough, it is the Independent which best conveys this, reporting what amounts to a growing rebellion by the smaller states, who have served notice that they may not sign up to a compromise over voting weights.

What is interesting here is that Finland's foreign minister, Erkki Tuomioja, clearly speaking for others as well as his own country, complained: "We are very concerned that the [Irish] presidency has treated this issue as a bilateral negotiation between France and Germany on the one had and Poland and Spain on the other". He said small countries are "not at all happy with the state of play over the extent of majority voting".

This is the central question, which overshadows the whole negotiations and, to that extent, the spat between Straw and the French and Germans is a side show. Not least of the problems is the attitude taken by Spain – which wants to raise the population threshold on majority voting to 66 percent, to enhance its ability to block measures it opposes. Here there is going to be a monumental battle, which is going to be difficult to resolve.

Inevitably, however, the British media will continue to feel the need to pander to what they think a British audience wants to read and see, but it is the wider perspective – the "noises off" - which are telling the real story. Those "noises" are saying very clearly that the June summit is doomed.

What happens next is the million dollar question. Here, the Scotsman gives us a clue. "Should the constitution not be settled by the end of the Irish presidency," it writes, "its prospects of ever being agreed will fall sharply, because the Dutch, who take over the EU presidency in July, are unlikely to give a high priority to salvaging the treaty. Jan Peter Balkenende, the free-market Dutch prime minister, last month said EU leaders ‘need to concentrate on the European economy’ instead of institutional reform".

And what then? Many commentators liken the European Union to a bicycle. You have to keep peddling forwards, or you fall off. If the constitution fails, the bicycle stops. Are we seeing the end game for the project?

Headed for the guard’s van?

Sources: Financial Times, The Independent and AFP

Faced with the increasingly likely prospect of a new constitution being blocked, France and Germany are returning to the long-standing idea of a multi-speed Europe. According to the Financial Times, they want to bypass British opposition and allow "pioneer groups" to push ahead with closer integration unencumbered by national vetoes.

The plan is to create a so-called avant garde which develop common policies in areas which Britain will not accept – such as in tax, social security and judicial co-operation.

It appears that France, Germany and Spain, supported by a number of smaller countries, want to be able co-ordinate policy on the basis of a qualified majority vote. France and Germany have already announced plans to co-ordinate company taxation, but such “enhanced co-operation” under existing treaty provisions has to be conducted by unanimity.

Straw is said to be opposed any move to extend QMV "through the backdoor" on these issues. Yesterday evening, he told the annual dinner of the CBI that "Britain must stay at the heart of the EU's decision-making process".

Sticking to his government’s standard line, he reaffirmed that he wanted to pursue economic reforms in the EU, telling industrialists that, "If we retreat to the margins, we will not achieve the right results for Britain". Publicly, at least, he is still labouring under the impression that we can "put ourselves at the centre of decision-making and build winning alliances".

Despite this, if France and Germany do manage to develop what has also been called the "vanguard", Britain may end up in the guard’s van. However, if you are on board a train which is charging ahead at full speed to disaster, that is perhaps the best place to be.

Tuesday, May 18, 2004

I stand corrected

Following my post on "News Values", I am told that the foreign ministers' meeting WAS on the BBC Six o’Clock. Andrew Marr pronounced, complete with pictures of salami being sliced and the mosquito story and a to-camera piece from the actual conference room. I am told it wasn’t as good as it could have been [of course!] but it wasn’t bad.

I was actually watching News 24, and assumed the BBC main news would follow the same line. Slap on the wrist North!

By the way, the story was also in the London Evening Standard, page four of the evening edition, with the Olympics splashed all over page 1.

On a lighter note

Agence France Press have picked up on the banter about mosquitoes during the foreign ministers’ meeting (see story below), displaying on the EU Business web site a piece with the headline "EU partners trade salami slaps, mosquito barbs over constitution".

On that same site there are four advertisements, supplied by Google, who are very much into what is known as “contextual advertising”. This aims to present adverts which will be tuned to the specific interests of the web-site reader. Thus, with a piece with "mosquito" in the heading, all four adverts are selling… mosquito exterminators.

This is almost as bad as the Google ads on this site, which offer courses for people who wish to take the examinations to become EU officials. But the crowning glory is a news piece on EU Business which comments on Straw's part in today's negotiations. Alongside is an advert which helpfully offers "negotiation training" from a "Havard professor".

Contextual, these ads may be, but I suspect Google haven’t got it quite right yet.