Saturday, June 11, 2005

A wholly different game

As purely political theatre, the current drama of the UK rebate is something the British media is quite good at covering. It has all the elements of a "biff-bam" soap-opera that the hacks can understand, and they get stuck into it with relish.

At one level, therefore, The Times today gives quite a good account of the twists and turns of the saga.

However, it also reports that Blair "will pit his authority as a newly elected leader against the weakened heads of Germany and France next week by demanding a fundamental overhaul of the way the European Union spends its money and conducts itself."

Blair, we are also told, will tell Chirac and Schröder that "they cannot allow the increasingly furious row over the budget to divert attention from the problems that Europe faces after the French and Dutch rejections of the constitution."

That, of course, is to miss the point entirely. The precise reason why Chirac, in particular, has escalated this spat into a major international crisis is to divert attention from his lamentable performance in the referendum campaign. More to the point, he is seeking to position Britain in its archetypal role in Community demonology as the "awkward partner", in the hope of cementing an alliance of all the other EU member states, to take on Blair at next week's European Council.

By framing Blair as the "black sheep", he clearly hopes that this will strengthen his arm in the battle to force a continuation of the constitution ratification process. Not least, this will ensure that the British prime minister has to share the pain of a humiliating rebuff in a referendum, a fate for which Chirac, in part blames Blair for forcing on him the referendum in the first place.

That much, actually, is acknowledged in The Times's piece, which cites British officials as accusing the two leaders of using diversionary tactics to make Britain "the bad boy" at the Council rather than face up to the facts.

The paper cites a "source close to Blair", saying: "The truth, is they will not get away with it… Most of the others there won't want just to be talking about the budget. They will want to know how M Chirac intends to help them to avoid getting 'no' votes in their own referendums if he is so keen that they should go ahead with them."

That again is to miss the point. Chirac is nothing if not focused on his own problems – French problems – and if he (or his successor) is ever to have a chance of getting his countrymen to accept the constitution, he has two possible scenarios. This first, which is no longer realistic, is for every other country to accept it, allowing him credibly to claim that France is "isolated". The second, more realistically, is to get Britain to reject it - thus allowing the claim that it is good for France. To that effect, of course, he must manoeuvre Blair into holding a referendum.

When it actually comes to Britain's rebate, this is, in fact, a storm in a teacup. The actual sum involved, in relation to the budget overall, is minuscule – and even less if the claw-back effect is taken into account. Moreover, funding the enlargement countries is not an issue. Most have been unable to develop the administrative systems to handle the vast sums (by their standards) pouring out of the EU coffers and have fallen behind in dispersing payments.

There is a massive surplus built up in the the EU bank account, and countries like Hungary, Slovenia and Poland have considerable credits, which they can feed into their systems, even if no new money is forthcoming for a while. And, if there is no immediate agreement on the budget, there is no crisis. EU law allows for a roll-over, based on a proportion of the previous settlement, which is more than enough to keep the Community ticking over.

In all, therefore, the "budget crisis" is artificial, which lends support to the view that its sudden eruption is an artefact, designed to put pressure on Blair. On that basis, the prime minister may have a great deal less leverage than he thinks, as the Chirac/Schr̦der duo could just as easily defuse the crisis by making last-minute concessions, in exchange for the thing they want most Рa continuation of the ratification process.

What they may not have factored in, however, is that they are dealing with a "no-care-Blair". He may not actually give a fig whether there is a referendum or not. We could find him agreeing to one, but distancing himself from it, telling the protagonists get on with it, without engaging in the debate. After a lacklustre campaign, he could walk away from a "no" result with minimal political fallout and hand the mess back to the European Council with the same "don't care" attitude.

In other words, behind the headlines, a wholly different game may be being played out, one of far greater subtlety than the hacks even begin to suspect, for stakes that are much bigger than a paltry few billion. Very soon, we will start seeing the cards.

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