Monday, May 31, 2004

Poland looks set to ditch constitution

Sources: Reuters, AFP

Marek Belke's Democratic Left Alliance (SLD) party has been plunged into even deeper disarray today after the Polish parliament voted last Friday to approve a report linking it to a corruption scandal. The report blames former SLD prime minister Leszek Miller, and president Aleksander Kwasniewski for trying to cover up a multi-million-dollar corruption scandal.

According to Reuters, the vote followed the conviction last month of film producer Lew Rywin for soliciting a $17.5-million bribe from a Polish daily in return for favourable changes to media laws. In the subsequent investigations, the names of several senior SLD officials involved in the drafting of new media laws surfaced. Some were close associates of Miller and Kwasniewski, who was SLD leader before becoming president in 1995.

Yet, despite the hostile atmosphere in the parliament, Kwasniewski is still insisting on re-appointing Belka as prime minister and submitting his candidature for approval to the lower House, in defiance of the earlier vote of no confidence. Predictably, Miller is predicting that support will be "slim".

In a new twist, however, Kwasniewski is not intending to appoint Belka until 11 June, which means that the confidence vote will not take place before the IGC summit on 17/18 June. With all the opposition parties against the EU constitution, the situation is now developing where possibly Belka's only hope of gaining sufficient parliamentary support for his appointment is to ditch the constitution.

This may explain Belka's demand for an 80-20 split for the "double majority" voting system, a hardening of his earlier position when he was calling for a 60-40 split. This stance will virtually ensure that there is no agreement of the summit, allowing Belka to return home the hero, having saved the Nice deal for Poland – outflanking the opposition.

With chances of agreement thus receding, European Parliament president Pat Cox has joined Ahern in predicting that the chances for success at the IGC are only 50-50. But even that figure is looking wildly optimistic.

Summit predictions


There is something comforting about Rees Mogg making predictions in the Times – the joke is that he always gets them wrong so, whatever he forecasts, the one thing you can be assured about is that they will never happen.

But there was another joke recently, in the hilarious "Alex" cartoon in the Telegraph, where the chairman of "Megabank" fired an analyst for getting his predictions right. His "crime" was that he had been so consistently wrong in the past that he was relied upon as a bell-weather. Coming up with the right answer completely destroyed his own value.

There is something of this in Rees Mogg’s latest prediction where, in a general piece about UKIP, he makes some forecasts about the summit on 17/18 June. "There may be further disagreement on the formula for qualified majority voting", he notes, "in which case Mr Blair would escape the odium of having to veto the treaty."

The alternative is that Blair will "have to decide whether to pretend that his red lines - if he gets them - are a sufficient protection for British independence, or veto the treaty and come home as the champion of British sovereignty."

Rees Mogg is tempted to think that Blair will take the most favourable political course. "Early in the morning of Saturday, June 19, the heads of government will break up, bleary-eyed; Tony Blair will say that he has not been able to get his red lines, that he cannot sign the treaty, and will come home to universal applause, waving the flag of St George".

Writes Mogg, "That would make sense of his decision to call a referendum that he never had any chance of winning. It would also obey one of his consistent rules, never to leave a popular issue to the Opposition. The European constitution is a strong issue; it is irretrievably unpopular, and the Conservatives are on the right side of it".

Actually, Rees Mogg is probably right on the first count. With caretaker Polish prime minister Marek Belka upping the ante on majority voting, moving away from the Irish compromise rather than towards it, the summit is most likely to fail on that issue alone. As with the summit last December, Blair's "red lines" will never actually be discussed. He will be able to come home with his reputation as a European player unsullied.

And if the majority voting issue is not enough, there is every indication that the inclusion of "Christian values" in the constitution could also prove a breaking point. It may have its amusement quotient, but the advocates of its inclusion are deadly serious, as yesterday’s statement from the European Movement in Malta demonstrated.

But the issue takes on a new dimension with the news that Schröder is courting the 500,000-strong Turkish vote in his own country, to boost the flagging electoral fortunes of his Social Democratic Party. If he is to keep the Turks on-side, he cannot afford to permit the reference to Christianity in the constitution. Thus, the irresistible force of the Catholic countries – backed by the Vatican – is shaping up for a collision with the immovable object of Germany.

With Ahern now forecasting only a 50-50 chance of success, what we can now expect is a series of increasingly clear signals from the "players", talking down the chances of success at the June summit. By the time it is held, the expectations of success will be minimal and the damage arising from its failure will be contained.

The pity of it all is that the media will then pack up its tents and take the EU off the agenda. As Booker remarked in one of his recent columns, this means that the debate on the whole issue of Britain’s membership of the EU will not take place – at least, not in the immediate future. However, as we know from experience, the "colleagues" never give up. This will be more a matter of postponing the debate, rather than abandoning it.

Constitution agreement continues to look fragile

Without much drama or great publicity, Poland seems to have upped the ante on the constitution negotiations, demanding an 80-20 population split on the contentious "double majority" voting. This means that countries with twenty percent of the population of the EU could block legislation, instead of the 45 percent proposed by the Irish presidency.

This was stated yesterday by caretaker president Marek Belka, in an interview given to the Frankfurter Allgemeine Sonntagszeitung. This is way beyond what is acceptable to the presidency and is bound to be resisted by Germany – among others – which has consistency refused to accept any extension of the 55-45 split proposed by Ireland.

Of the other contentious issues, the European Movement of Malta yesterday issued a statement that it “stands four-square behind our Government and all those who want a reference to Christianity included in the new European Constitution”. Europe had nothing to be ashamed of by acknowledging the enormous contribution made by Christianity to the development of its civilisation, it declared.

Positions on these two crucial issues, therefore, seem to be hardening – although it is impossible to discount such statements as pre-negotiation posturing.

However, in what seems a downbeat message, Ahern is now saying that there is only a 50:50 chance of a deal during the summit on 17/18 June. This was in response to a question asked by Irish RTE state radio, when he said that there were "large issues" still to be agreed. He is planning to hold consultations with leaders in seven other EU countries over the next week.

Ahern added that getting 25 countries to agree on matters that were "fairly fundamental" to them was difficult. "Every country has a problem with something," he said. "I think I know where everybody is at but to get everybody in the one place at the one time is difficult. It will take, I can tell you, more energies than I feel I have even to do it but I will keep trying."

Reinforcing his downbeat message, Ahern said he expected the negotiations to go down to the wire. "In the end of the day, the only ones that will make decisions are prime ministers and they will only make it when they are up against the clock."

Sunday, May 30, 2004

Shock news: foreign aid is squandered

The shadow international development secretary, John Bercow, has pointed to the European Commission’s own evaluation of EU aid to prove that the large sums spent on supposedly helping the poor counties of the world are, in fact, spent on unnecessary junkets and “cultural events” that tend to promote the EU (in other words, propaganda).

For example, in 2002 £200,000 was spent on a pan-African cinema festival in Burkina Faso, an impoverished West African country; another £992,000 was spent on films set in African countries (did these ever get shown anywhere?). Several cultural projects were located in the Mediterranean – so much more pleasant than tropical Africa. These received £25 million in all. A mere £14.2 million was spent promoting the image of EU aid. (Promoting to whom?)

There is nothing staggeringly new about it all. Foreign aid has been a constant source of corruption since its existence. It takes money from the poor of the rich countries and gives it to the rich of the poor countries. So it was phrased by the greatest student of the subject, Lord Bauer (the economist P. T. Bauer). He showed effectively a long time ago that foreign aid created a dependency culture, held back development and supported corrupt and bloodthirsty governments.

Still, it flows. The only thing that has changed is that much of the British aid is now channelled through the EU, which prides itself on giving more of it to developing countries than anyone else does. Presumably, that is to make up for the unfair trading policies that the EU also practises.

There have been innumerable blistering Court of Auditors reports on EU foreign aid in general and separate projects in particular. The famous report on corruption in UCLAF the then anti-corruption agency of the Commission, specifically pointed to several aid projects as being blighted beyond anything else.

A long-delayed OLAF (the new anti-corruption unit) report on aid to the Palestinian territory will probably show that large sums have been channelled into private bank accounts and, even worse, on supporting terrorist organizations.

The complaints about foreign aid often centre on money disappearing in the recipient countries. The EU has got round that problem. A great deal disappears before it ever gets to the recipients.

The Conservative Party has pledged itself to repatriate foreign aid (together with fisheries and agriculture), should it win the next general election. Let us hope this happens. Let us also hope that immediately on achieving this aim the Conservatives take a long hard look at the whole concept of aid and start thinking of trade or other economic relations as a way of helping poor countries instead.

Eurofighter – a model of European co-operation?

If ever there was an example of the pitfalls of European co-operation, it is the Eurofighter, now named the Typhoon, developed by a consortium of British, German, Italian and Spanish companies.

Hailed by its makers as: "Europe's great opportunity to lead the world in cost-effective technologies that can be applied to both commercial and defence programmes", it is over £5 billion over budget, near enough ten years late – with still no date set for squadron service – and beset by technical problems.

Although supposedly in the delivery phase to customer air forces, the latest embarrassment is that test pilots have been told to avoid flying through clouds because computer problems risked throwing the aircraft into a "catastrophic spin". It has also emerged that the flight computer has a tendency to switch from flight mode to ground mode while still in the air.

Even if these faults can be corrected – and some reports indicate that they are "unsolvable", the aircraft is three technological generations behind the US equivalent, lacking a stealth capability, swivel jet technology and advanced, multi-tasking avionics.

At the behest of that great Europhile Michael Heseltine, however, Britain was committed to the project in 1985, ordering 232 airframes. These were intended to combat the high-performance Soviet Mig and Sukhoi fighters in the latter stages of the Cold War.

Within four years, however, the Berlin wall had fallen and the Cold War was over, leaving Britain saddled with an increasingly expensive and under-performing white elephant. Never having been slow in the past to cancel aircraft projects – such as the TSR 2 and the supersonic 1154 VTOL fighter - this time Britain is locked into a multinational contract, from which escape would be more expensive than actually buying what is now unwanted merchandise.

Small surprise, therefore, to see reported in both the Sunday Telegraph and the Sunday Times, a report that the Ministry of Defence is seeking to sell off dozens of Typhoons before it has even received them in an attempt to avoid further embarrassment over the escalating cost of the project. It hopes to sell up to 50 of the aircraft to Austria and Singapore, which would be delivered before the Royal Air Force was equipped.

The aircraft, with an off-the-shelf cost of about £43 million each – but over £60 million each if development costs are taken into account - could even be sold off at a loss. That, in fact, may well be necessary, as the upgraded Lockheed Martin F 16 can be purchased for roughly a third of the price of a Typhoon, and has so far swept the board on export sales, with over 4,000 now having been sold.

Perversely, the whole idea of high-tech manned combat aircraft is now falling into disfavour, with the advent of highly capable "smart missiles" for air combat and ground strikes, plus the increasingly availability of unmanned, combat-capable drones. The advance in weapons technology and guidance systems, however, is really making the difference, allowing the use of basic, unsophisticated weapons platforms – to the extent that even transport aircraft can now be used for missions which, in the recent past, required high performance military aircraft.

But such are the inflexibilities of European co-operation, that, even when the world has changed so drastically that the project is no longer valid nor necessary, it goes marching on. Doesn’t this sound a bit like the European Union?

UKIP at the centre?

For once the European elections (a yawn a minute exercise for most people) seem to be revolving round UKIP. Not a day passes by but they are in the news. Whether that will translate itself into votes will be seen on June 10.

The more europhile media like the BBC, the Guardian and the Independent alternate between gloating and foaming at the mouth, calling UKIP every dirty political name they can think of. But as they do that to all eurosceptics, it hardly matters.

The more Conservative media seems stumped. On the one hand there are pictures of the celebs who now support UKIP – Kilroy-Silk and Joan Collins most recently; on the other hand the Telegraph is making valiant efforts to minimize possible damage to the Conservative Party in the European elections.

Today the Sunday Telegraph trots out Dr Alan Sked, the founder and first parliamentary candidate of the Anti-Federalist League and, subsequently, UKIP. He gives all the reasons why he is voting Tory, enumerating all the problems with UKIP policies (there are none, to speak of) and behaviour of their MEPs (somewhat pathetic). But as he has done this at all previous elections, it is not clear whether his article will have any effect.

The presence of celebs in the political process has never been properly evaluated. Do they attract votes? Do they repel potential supporters? As with advertising in general one never knows which five per cent works.

Perhaps the biggest story around UKIP in political terms is the rebellion of the peers. Led by the redoubtable Lord Pearson of Rannoch, five Tory peers joined seven cross-bench ones to sign an open letter, urging voters to forsake their traditional allegiances for the European elections and vote UKIP.

Their argument is persuasive. As Lord Pearson puts it:

"Within the party we have failed to persuade Michael Howard to take a much tougher line towards the EU," he said.

"A solid swing to UKIP on June 10 might help to do so. The only party which might save our democracy, our right to govern ourselves, from the corrupt octopus in Brussels is the Conservatives.

"But the only people at the moment who can make the Conservative leadership see sense are UKIP."

Typically, the media has ignored the cross-bench peers, never fully understanding the importance of independent members of the House of Lords. They have given space to the fact that the Conservative whip was withdrawn from four Tory peers: Lord Pearson, Baroness Cox of Queensbury (the well known fighter for human rights Caroline Cox) and Lord Stevens of Ludgate. The fifth peer, Lord Laing of Dunphail, in true Soviet tradition, recanted.

Lord Pearson remains unrepentant. Justifiably annoyed that he found out the news from a journalist who phoned him for comment, rather than from the Leader of the Conservative Party in the House of Lords, Lord Strathclyde, he repeated that he saw no other way of pushing the Conservative Party towards an opposition to the EU.

"The EU constitution is indeed a tidying -up exercise," he added. "It sweeps the rest of our sovereignty under the Brussels carpet."

Yet an even greater sign of the Conservative Party’s desperate fumbling on this issue is their withdrawal of the whip from Lord Willoughby de Broke, one of the hardest working and most active peers in the House, though he has never held a paid ministerial job. He is not as well known in the media as Lord Pearson, but he is as important in politics. Furthermore, he is a scion of an old and active Tory family.

If Michael Howard and Lord Strathclyde are prepared to dispense with people like him to pacify their minute europhile constituency, they really have lost the plot.

Has Prodi finally lost it?

According to today’s Sunday Telegraph, Prodi is calling for a Europe-wide vote on the constitution on the same day. He feels that a "yes" vote across all member states would drive the EU forward at a "very high speed".

Nevertheless, the idea was immediately denounced as "unworkable" by British officials. It would also be irrelevant. Even if there was an EU-wide vote on the same day, if Britain voted "no" it would be enough to block the constitution.

That apart, and not raised in the Telegraph article, Germany is constitutionally barred from holding referendums and, with a major player absent, the idea is a non-starter.

There is also another problem. For obvious reasons, referendums cannot be fought at the same time as a general election, yet there is no period in the next two years when one or other of the twenty-five member states will not be holding such an election – not least Britain, Italy and Poland. For that reason also, the idea is a non-starter.

What is intriguing is why Prodi should lend his name to such a hare-brained scheme. This idea is not new, and the objections identified above have already been aired. Has Prodi finally lost it?

Could it be something in the water?

One of the most extraordinary aspects of the new report, Building a Political Europe, is the fatuousness of the assumptions that underlie it. The purpose of the report is to chart the way forward in defending something called the European model. But it is written by people (or, at least one person, since it is not clear whether the report is the work of Dominique Strauss-Kahn alone, or if he had the support of the international great and the good who sat on his committee) who have only a sketchy knowledge of European history, and no understanding of politics or economics.

Let us look at some of the more blatant contradictions in the document:

• The report bemoans the fact that there is no political Europe in the sense that the Commission, which ought to be a political government, has no power to impsoe all the necessary legislation to promote "the European model", which appears to be a highly centralized, bureaucratic, redistributionist, illiberal, inward looking, protectionist administrative tyranny. At the same time, the report makes it clear that the transfer of "concrete", "technical" powers was essential because there would have been no agreement to transfer political power.
In other words, the project lacked democratic legitimacy from the beginning, because that was the only way it could be created at all. This lack of legitimacy may now be undermining the whole project.

• It seems that the European model is rooted in imperial unity, such as Greek civilization and the Roman empire – neither exactly European but Mediterranean and Near Eastern, the various empires of Charlemagne, Charles V and Napoleon, as well as cultural unity like Christianity in the Middle Ages – presumably not when it was causing the deaths of thousands of Christians of slightly other persuasion and the Republic of Letters (what is that when it is at home?). But, apparently, the model is also rooted in the discords and wars and the horrors of the Second World War.
True enough, but where does that leave the idea of single model?

• Apart from the guff about inviolability of human rights, multilateralism and culture as a means of emancipation, there is the inevitable contradiction at the heart of the European economic project. The authors of the report proudly proclaim that the European model is a high taxing, high regulation, redistributive one. They are proud of the fact that taxation averages 42 per cent of GDP in Europe as opposed to 28 per cent in the USA and Japan. But, alas, the European project is foundering because of lack of growth and economic stagnation.
Could the two be possibly connected?

• Apparently European are proud of the model, which makes "a political Europe as the vector of this European model … legitimate". The trouble is that equally apparently, there is no faith in the model or support for it as shown by the low turn-out in elections and, it appears, according to the report, a loss of interest in representative democracy by the educated citizens of Europe.
But as, on their own account, the rulers of the EU have no democratic mandate, loss of interest in their antics hardly betokens loss of interest in representative democracy. Quite the opposite, it may show a desire to return to it.

• It seems that the European model, which protects its citizens and spreads its wonderful values in the world is threatened from within by economic stagnation and lack of political legitimacy and from without by the forces of globalization and international terrorism. It seems that this wonderful model simply cannot cope with what is going on in the world.
The one thing we are not told is why, in that case, it should be defended by more taxation, more regulation, more policy that has rendered it helpless and hopeless.

It is difficult to do justice to all the various contradictions and inanities in the document. We suggest that our readers look for themselves, pick out their favourite bits and send them in to us. To download full document in pdf click here.

Saturday, May 29, 2004

Towards budgetary federalism

Do we want the Union to be genuinely capable of independent financing? In practice, do we want (the European) Parliament to be granted the power to raise taxes? Unless we give up the idea of any progress towards political union, the answer must be yes.

In this third post, exploring the commission document "Building a Political Europe" – the federalist equivalent to Mein Kampf - we explore the ambition of the EU, through its "round table" group, to acquire independent taxation powers.

Addressing this issue, the "round table" begins by anticipating the outcome of the constitutional treaty negotiations, stating that "The European Union's powers are being strengthened." It then concludes that, with these additional powers, "it must therefore be provided with the financial means to act."

What concerns the "round table" is the current EU budget of one percent of GDP. "The development of a political Union and of the European model is inconceivable", with that budget, it asserts.

"No federal institution can function with such a limited budget. By way of comparison, the United States federal budget is around 20 percent of American GDP, and the German federal budget is almost 13 percent of German GDP. Due to the severe limitations imposed by its budget the Union is forced to act mainly through legislation, thus creating a kind of regulatory inflation."

Assuming that CAP spending is reduced, the "round table" considers that an initial increase to between 1.5 and 1.6 percent of GDP could be aimed at, requiring the removal of the ceiling on own resources of 1.24 percent of GDP.

As to financing, some would come from "budgetary transfers from the Member States linked to transfers of powers" and another part would could come from an increase in national contributions.

However, this is not good enough for the "round table". "If the European Union is to become a political Union, in addition to the existing four "own resources", it needs a fifth budgetary resource "which would be federal in nature."

"This raises a highly political question: do we want the Union to be genuinely capable of independent financing? In practice, do we want Parliament to be granted the power to raise taxes? Unless we give up the idea of any progress towards political union, the answer must be yes."

The "natural" candidates are identified as "a supplementary national contribution" of 0.1 percent of European GDP and a three-point supplementary company tax. Furthermore, a company tax would have an added advantage. "The harmonisation or partial harmonisation of the company tax base and rate would be a further step towards completion of the single market. It would make it possible to limit tax competition between Member States, which chiefly centres on this tax."

As it stands, however, the chances of this happening are extremely remote. But, elsewhere in the document, the "round table" suggests a 20-year time-scale to achieve its objectives.

This year, it is the 20th anniversary of Spinelli's draft treaty on European Union and, looking at this document then, many commentators would have suggested that its objectives were unrealistic to the point of fantasy. Yet, with the Single European Act, Maastrichht, and now the proposed constitutional treaty, almost all of those objectives have been attained.

Given the current rate of progress of the march of European integration, twenty years hence, who is to say that the objectives in this federalist Mein Kampf will not also be attained? It can never be said too often that, when dealing with the EU’s aspirations, what starts off by seeming fantastic has a nasty habit of coming to fruition.

The paper mountain

Let us face it, the two flourishing industries in the EU are paper and food and drink catering for the institutions. We don’t know what is happening to the catering but recently the Commission ordered an enquiry into the paper industry. We await with some interest its outcome.

Two days after the enquiry was ordered, the Commission has also told its officials to cut down on lengthy documents. This does not apply to the ever growing Constitution that will, theoretically, be decided by the heads of state and government on June 17-18. Nor does it apply to the ever more complicated agenda for the June Summit that the Foreign Ministers will have to agree on three days before it on June 14-15.

Presumably, there will be an attempt made to translate all the necessary documents, including the new(ish) version of the Constitution into the necessary twenty languages. But you cannot expect translators to cope with everything. They cannot keep up with the avalanche of legislation, regulation, decision, instruction etc that pours out of Brussels on a daily basis.

Not only does everything have to be translated into twenty languages the material has expanded as well. Translators have seen their work increase by an annual 5.3 per cent in the last five years. There is already a backlog of 60,000 pages and the Commission fears that it may turn into 300,000.

According to the Commission, its translators dealt with 1.48 million pages in 2003 in preparation for enlargement. At present there are 2,400 translators but the plan is to have 3,000 – 4,000 by 2010. Presumably, that is not so much to cope with the number of new languages but to cope with the ever increasing legislation that will flow out of the Constitution, should it be adopted by the European Council and by the individual member states.

The EU is tackling the paper mountain crisis with a pincer movement. On the one hand, officials have been told not to produce documents that are longer than 15 pages (except for directives, regulations and constitutions, presumably) and, in a Stalinist stakhanovite fashion, the translators have been told to increase their productivity by 40 per cent. That way, we are told, the backlog will be reduced (though not cleared) by the end of 2006. The only problem with that calculation is that the backlog is likely to increase. Even at 15 pages per document a great deal may be produced by those ingenious Brussels shock workers.

Managing the media

Following on from the previous post on the commission’s report on "Building a political Europe" click here for details, this second blog on the subject deals with the role of the media in the brave new (European) world set out for us.

Inevitably, any project so ambitious and so grand as turning the disparate nations of Europe into a single nation must have control over the flow of information and the "round table" authors of the report have offered their ideas on the avenues that can be explored.

They set out by complaining, with some justice, that "not enough information on Europe is given to Europeans". As an aside, there are references throughout to "Europeans" – not the citizens of member states, but always "Europeans" – indicative of the mindset and the aspirations of the authors.

As to the lack of information, they cite the negotiations on enlargement, where they complain that that few "have had enough facts at their disposal to reach an informed judgment". Poor media coverage of the negotiations and the importance given to the concluding summit, they assert, have given "Europeans" the impression that this change in the scale of Union has been brought about by secretive diplomats conducting behind-the-scenes negotiations.

The national media, they assert, devote scant attention to European political debates because they feel they are of little interest to their readers, listeners or viewers. The national governments’ reading of European affairs reflects national preoccupations first and foremost. Even the European Parliament has often been no more than a sounding-box for national interests.

Taken in isolation, these seem reasonable complaints. This Blog has made the same observations. However, one must read between the lines to absorb the real concerns behind the these authors’ concerns. By "facts", of course, the authors mean that Community "line". In their limited view of the world, only the guardians of the faith utter "facts". The rest is ill-informed speculation and "myths".

Nevertheless, not all is lost, according to the authors. “The situation is undeniably improving”, they write. All the main national media now have correspondents in Brussels to follow European affairs, and high-quality information is provided by the press agency Agence Europe.

Here, the identification of the Brussels-based Agence Europe is highly significant. This is a highly partisan, Europhile agency, known for its staunch support of the commission. Not surprisingly, the information is regarded as "high quality".

But then you get to the real concerns: A "pan-European media do not yet exist. The overwhelming majority of European media are national or local." That is the real beef of the complaint. The authors want a "pan-European media", detached from any national base – or readership.

"Those with an audience in Europe", they observe, "as a whole are primarily international media. This goes both for the press (Financial Times, The Economist, International Herald Tribune, Wall Street Journal) and television and radio (BBC World, Radio France International, Deutsche Welle). Genuinely European media are rare.

Despite observing that there is not yet a market for such organs, the authors argue that "the media are of key importance for the future of European democracy" – i.e., integration. They continue: "The Round Table therefore considers that the Union is justified in promoting the creation of the first pan-European media, on the model of the BBC, as the French and German governments have done with the TV channel Arte."

How significant that the authors chose the BBC as a model. A supposedly independent broadcaster, its pro-European Union bias is so evident as to be laughable – but it earns its reward in the portals of the commission. No doubt if any British government is so rash as to remove the license fee, the EU will step in and offer it a handsome stipend, transforming it into the EBC – the European Broadcasting Corporation.

If you wish to download the full report, click here.

Is anybody going to vote?

Just as strenuous efforts are made to prove that the European Union and, in particular, the European Parliament are acquiring some legitimacy in the eyes of the EU electorate, new poll figures show that the turn-out for the elections on June 10 and 13 may well hit an all-time low.

Some people prefer to see it differently, pointing out that the latest poss shows that 43 per cent intend to vote, whereas an earlier one showed only 32 per cent. But when you take into account the fact that election campaigns have started in most of the member states, the growth in numbers become less impressive.

With less than half the population intending to vote and more than one third being unaware of the elections at the time of asking, this will not be a happy time for the EU integrationists or the various heads of state and government that will converge on Brussels less than a week later.

Voting intentions vary from 76 per cent in Belgium, where voting is compulsory to 32 per cent in Britain, 31 per cent in Sweden, 27 per cent in Slovakia, 26 per cent in Estonia and 25 per cent in the Czech Republic. In fact, the chances are that on the day the figures will be even lower.

It does not seem to have taken the new entrants long to work out that the European Parliament is not worth the piece of paper you cast your votes on.

In Britain the turn-out is promising to be slightly higher than usual because of the coincidence with local elections (as well as London Assembly and London Mayoral elections). However, the combination of different voting papers, with the European Parliamentary ones being long and complicated as it is a list system, will probably mean a larger than usual number of spoilt papers on the day.

Then there is the question of regions that will have a postal ballot only. Against all advice, the Government decided to go ahead with the experiment in the four regions they were hoping to secure a largish Labour vote. So far the whole process has been shambolic, with papers not printed, printed with egregious mistakes, not delivered in time and so on.

Nor is it particularly clear that postal balloting is safer than individual appearances at the polling station. Certainly, in the past there have been serious infractions of electoral law.

The point that neither the Government, nor the EU, nor, indeed, any other politician seem to want to accept is that there is a reason why people do not bother to turn out to vote. It is not inability to work out how to vote or how to get to the polling station. It is them, the politicians. The people of Britain do not want to vote for any of them. When it comes to the 732 members of the European Parliament, not many want to vote for them across the EU.

Overtaking the United States or Lisbonization

Back in the 1960s Nikita Khrushchev announced that the Soviet Union would catch up with the United States in a certain number of years. As it happens, his comrades buried him before he had time to bury the Americans. The whole idea produced a typical Soviet joke: "Yes, we shall catch up with them but we must not overtake them or they might see the holes in our pants."

Of course, things are not nearly so bad in the European Union. But all this talk of overtaking America is beginning to be wearisome. It’s all to do with that Lisbon process, which has delivered absolutely no results. According to Romano Prodi and Mario Monti, both speaking at the Economic and Social Council on May 25 the aim is to make the EU the most competitive economy by 2010. As we have already noted on the blog, in the last year almost all of the member states have slipped down in the competitiveness stakes in the last year.

Nothing daunted, Mario Monti, Romano Prodi and representatives of the social partners – business groups and trades unions – are calling for action on the Lisbon agenda. Most of the action is to be on the budget or as it is known in Brussels parlance financial perspectives, which according to Monti, must be “Lisbonized”. (To be fair, he did admit this was an ugly word.)

It seems that the only economic development the Commission and the social partners understand is more money being spent on some government projects that would define and "promote" competitiveness. The idea that competitiveness was best promoted by lower taxation and fewer regulations is alien to them all.

Oh yes, they have also set up a high level group under former Dutch Prime Minister Wim Kok to look into the failure of the Lisbon strategy. The group will report to the Summit in June – some time during the two days when the heads of state and government must also agree on the text of the new Constitution. June 17 and 18 will be very busy in Brussels.

They just can’t wait

They are not even waiting for the constitution. According to Agence France Press, EU Justice and Home Affairs Commissioner Antonio Vitorino has spoken out at a conference in Lisbon, declaring that the time is right for the European Union to make the establishment of a common security and defence policy a priority.

"Now that the common market has become a reality, that the project of a common currency has been carried out and the eastern enlargement is done, the moment has come to work on security and defence," he said. Work on security and defence "was a prerequisite for any credible deepening of European internal policies," he added, as it was necessary for Europe to "have an effective capacity to affirm itself in the world."

The sentiment bears a remarkable similarity to that expressed in the commission document on "Building a Political Europe". The softening up process has started already. More on this in the Blog later today.

Friday, May 28, 2004

Political Europe – the next step

"…this constitutional treaty will merely be the starting point in the transformation of Europe into a political union".

Reading the document "Building a Political Europe" is a chilling experience. Its purpose it clear – it sets out the next phase for the development of a "political Europe", a template for a European Union after ratification of the constitution.

The product of the "round table" comprising "eminent figures from political and academic spheres and civil society", it has been created on the initiative of Romano Prodi, and it pulls no punches – although you need to get as far as page 98 to understand the overall context.

Here, what emerges – with utmost clarity – is the admission that the constitution is only a first stage. "Real but limited progress" is the round table's verdict on that constitution, undeniably an important step forward. But it is not the end of the process. It is the beginning. Read their own words:

"The transformation of the Commission into the government of the Union has begun. For the first time, the Commission is losing its political neutrality. From now on its President will be elected by the European Parliament and chosen by the political majority that has won the elections.

"His status will be close to that of the head of government in a parliamentary democracy. His commissioners will no longer be imposed on him by the national governments; he himself will have the power to appoint and dismiss them, and he will thus be able to form his government team and determine the political line to be taken by it. These changes will make the status of the commissioners similar to that of national ministers.

"The Commission's overall political role will at last be recognised. Whereas under current legislation its role is limited to ensuring the proper functioning and development of the common market; the draft constitutional treaty entrusts it with overall promotion of the general European interest.

"The other institutions will also become more political in nature. The President of the European Council will have the task of the external representation of the Union (he will thus be the political face of Europe) and of ensuring that the political guidelines laid down by the European Council are put into practice.

"The Council will have greater decision-making capacity; the principle of qualified majority voting has been established and the qualified majority threshold has been lowered.

"In other words, the Council will become more supranational and less intergovernmental in nature, while the powers of the European Parliament will be considerably increased, in particular through extension of the co-decision procedure and by giving Parliament the 'final say' in budgetary matters".

However, the report goes on to say, the progress achieved by the draft constitutional treaty is not sufficient to lay the foundations of Europe as a political union. Whatever compromise is reached by the IGC, "this constitutional treaty will merely be the starting point in the transformation of Europe into a political union". A "second phase" is "both possible and necessary".

On the front of the document there is the caveat that the report "does not necessarily reflect the views of the European Commission". Furthermore, the commission, according to the Times "is so worried about the reaction to the report, received officially last week (although it is dated April 2004), that it did not announce its publication" Commission spokesmen have declined to answer questions on it and one EU diplomat said: "It's living in a fantasy world. This is now the time for a period of retrenchment and calm, which allows Europe to get ahead with things that really matter".

This notwithstanding, we have been here before. The history of European integration is replete with such reports, setting out objectives which, in part, have been fulfilled but which, at the time, were denied.

This report is not just a Europhile tract, but one initiated by and presented to the commission president and it represents a serious strand of thinking within the "project". It would be unwise to ignore it, or dismiss it. What starts off being dismissed as fantasy in the EU world has a nasty habit of becoming reality.

More analysis to follow.

Building a political Europe

On Tuesday of this week, the Times published a story headed "Political union should be the EU's next big project, says Prodi report". It referred to a "controversial study" entitled Constructing a Political Europe, apparently arguing that the European Union was in crisis and can be saved only by turning it into a fully fledged "political union", with a European tax, minimum wage and pan-European political parties

Despite our best attempts, however, we had not until today been able to get hold of this report. We now find that the search was not aided by the fact that the Times misquoted the name of the report, which is in fact "Building a Political Europe" – a small but important distinction when using search engines.

Even then, there is no access to the report through the official commission Europa website but we have at last tracked it down. Possibly by mistake, it has in fact been published by the European Commission Delegation… to Australia and New Zealand. If you want to download the report, click here. Warning: .pdf file, 112 pages.

We will we publishing our own analyses over the weekend.

An alternate universe

Not for the first time, one wonders whether Irish prime minister Bertie Ahern shares the same planet with the rest of us. According to the Financial Times, he hopes to wrap up the negotiations on the constitution before lunch on Friday 18 June, the second day of the forthcoming summit.

This flight of fantasy apparently reflects the Irish presidency's confidence it can put forward a final treaty text that commands support from all 25 EU leaders. His officials, however, seem less sanguine. "I think we can do it in a reasonable time frame," said one. "I wouldn't rule out the debate going on into Friday evening or even into the early hours of Saturday, but we're not staying all weekend."

More likely, given the substantial number of items still to be agreed, this is simply Ahern posturing, hoping that the fantasy comes true simply by dint of constant repetition. Yet, in the two days of negotiations, normal European Council business has also to be conducted, including the contentious issue of deciding on the next commission president.

Guy Verhofstadt, the Belgian prime minister, seems to be emerging as a strong candidate but Blair is likely to take a great deal of stick from the Eurosceptic British press if he supports such an ardent federalist. Ahern may have to delay the discussion to allow the talks to concentrate on the constitution By the end of June, therefore, there is even a prospect that the EU could be without a new commission president designate, as well as a constitution.

Thursday, May 27, 2004

The benefits of EU membership

Source: Prague Post

Laws passed recently to harmonize Czech and EU laws have brought about chaos in the country's legislation, not least because a number of valid laws now contradict each other. The resulting legal chaos could further choke an already overburdened legal system.

Commenting on the situation, Ladislav Storek, a partner in the Prague office of the international law firm Salans, said: "It's obvious that the legal environment in the Czech Republic worsened after tens of new laws were thrown in because of the EU harmonization."

However, it is not all bad. Storek says law firms have experienced increased business. Who said that there were no benefits from EU membership?


The hidden agenda behind the Alstom deal

Mario Monti's approval of the 2 billion euro cash injection into the ailing engineering giant Alstom is seen by some as a major set-back for European industrial policy, supporting unhealthy corporate giants instead of throwing the company to the wolves of the free market and letting nature take its course.

But that is to ignore the fact that the Commission has its own agenda, which is far more important than the health of the market, or the immediate fate of a single company. And it is clear that this agenda is the driving force behind the Alstom deal.

The clue lies in the price tag set by Monti for the deal: Alstom is required to seek partnership deals with other companies to secure its future and thus cease to become solely a French firm.

The obvious partner is, of course, the German engineering giant, Siemens, but Alstom's chief executive, Patrick Kron, has already signalled his reluctance to go down that route. However, he has a problem. As the Financial Times helpfully points out, there are not many potential partners around, and beggars can't be choosers. Kron may wriggle and squirm but, in the end, all Alstom’s roads lead to Germany.

If the outcome is a deal between Alstom and Siemens – and Monti will have the final say on approving any partnership arrangement – the Commission will have achieved something for which it was created to achieve. It will have broken up a huge national enterprise – in this case French – and created a Franco-German conglomerate. National companies will have ceased to be and a giant European company will be in the making.

This, after all, was what Monnet’s European Coal and Steel Community was all about - breaking up national enterprises and integrating them into European constructs under the control of a supranational government. At the time, the aim was to deprive any single nation of the capability to act independently – creating European-wide interdependence which was the precursor to political integration.

There is no question that this agenda survives to this day. An Alstom-Siemens link, therefore, would represent a major leap forward in European integration.

And, in a separate development, reported today is the news that GKN has decided to sell off its stake in the helicopter manufacturers, Augusta Westland, the focus of a huge political row in 1986 when the great Europhile Heseltine sought to detach the company from the US-owned Sikorski and bring it into a European helicopter manufacturing consortium.

With the Italian joint-venture company Finmeccanica buying up the GKN shares, Britain now loses any independent helicopter manufacturing capability. Since Westland's major customer is the Department of Defence, British forces are now entirely reliant on an Italian company for this vital equipment.

The exact outcome may not have been quite what Heseltine had in mind back in 1986, but the overall objective has now been secured – as in the case with Alstom – significantly greater European interdependence in a major industrial sector. Not for nothing did Monnet's biographer call him "The First Statesman of Interdependence". The "father of Europe" would be mightily pleased with this week's developments.

Schröder attempts to bully Poland

Schröder met with "high-ranking Polish officials" in Warsaw yesterday, to urge Poland to support the entire current draft of the constitution, which he said was essential to keep the bloc "politically manageable." He emerged "confident" that a compromise deal could be reached, telling Polish president Aleksander Kwasniewski that: "Everyone has to push himself a little."

However, in what could be taken as a hint of menace, Schröder also told the Poles that it was up to all EU members to work towards the June deadline. "The German government is prepared to discuss specific arrangements... but we cannot allow ourselves a fiasco in June," he said. "I assume that we will find a solution in June that is fair and acceptable to all and that takes into account Poland's weight and importance."

Nevertheless, Deutsche Welle is reporting that the caretaker Polish prime minister Marek Belka may not be able to agree a deal, owing to his weak position. As leader of a government that has no parliamentary mandate, his hands could be tied.

That there are serious reservations to a deal being made on the current terms comes from the prestigious Center for Social and Economic Research (CASE), a Warsaw "think-tank" set up with American money. Writing in the Financial Times, one of its trustees, Jacek Rostowski, argues that Poland should hold out, alongside Spain, for the higher threshold on the double majority voting system.

"Poland's main reason for opposing the 50/60 double majority", he writes, "is the fear that it will significantly strengthen France and Germany within the EU. With 30 per cent of the EU's population, they will need only to co-opt one large country, or Spain or Poland plus a small country or two, to block any measure".

Interestingly, Rostowski states that Poland views the US as the only serious guarantor of its independence in the face of a resurgent and increasingly autocratic Russia. It fears that Paris and Berlin "may try to use the additional power the new system would give them to squeeze the US out of Europe".

"Schröder's readiness to put electoral considerations before his country's strategic interest in having the US committed to Europe", he adds, "came as a shock to Warsaw. These worries have been increased by recent Franco-German attempts to put pressure on new member states not to compete with western Europe on corporate tax, and their apparent commitment to build up selected companies as Franco-German 'European champions'".

"Another reason for Polish ministers' resistance to Franco-German pressure is their acute sensitivity to political manipulation and bullying. The convention that drafted the proposed constitution and the inter-governmental conference supposed to approve it were clearly timed so that accession countries would feel too insecure - out of fear that their accession treaties might not be ratified - to oppose the will of incumbent members".

"Then came the redrafting of the European Central Bank's voting system. Here weighting by population - which would have favoured the new members - was excluded in favour of weighting by gross domestic product. The final straw was the ostentatious refusal by France and Germany to abide by the rules of the stability and growth pact".

Rostowski asserts that "far from not understanding how Europe works, Poland's post-communist politicians feel they are in a strikingly familiar environment, where the big decide and the small are supposed to shut up". He feels that a change in political culture is needed before introducing a voting system that would give even more power to the two "core" states – "especially as France and Germany seem bent on doing all they can to protect themselves from change".

If this is a sentiment that is widely shared by politicians in Poland, then the summit is indeed in for a rocky ride.

Wednesday, May 26, 2004

Is press freedom in the EU our business?

Apparently not, according to Her Majesty’s Government. Replying to Lord Tebbit’s question about the case of Hans-Martin Tillack, the investigative journalist, who had been manhandled by the Belgian police and whose files and computer have been confiscated [see German journalist's office is raided by the Belgian police ... Again ], Lord McIntosh of Haringey reiterated several times that this was a matter for the Belgian courts and we could not intervene.

When Lord Lamont asked whether “we should not be concerned” that “the Belgian police or OLAF were in any way more interested in the suppression of evidence about fraud, rather than in combating fraud”, Lord McIntosh merely suggested that nobody would like it if “the parliament of another member state were to start to intervene in the activities of a British court”.

Of course, the situation is not the same at all, as a number of peers pointed out. We are not talking about the British parliament intervening in a purely internal Belgian matter, say, the Dutroux case, which is still rumbling through the courts. Tillack was investigating fraud and irregularities in the Commission’s anti-fraud unit. Its remit ought to be the investigation of how our money among others’ is spent or mis-spent. Instead of which, they merely want to suppress a journalist’s legitimate right to report on these matters.

As we, too, contribute and rather a lot to the funding of the EU, we ought to be materially interested in the fate of those funds; as we are part of the EU, we ought to be materially interested in freedom of speech and press in it. This is not, pace Lord McIntosh of Haringey and his advisers, an internal matter for the Belgian courts to decide on.

To read the full debate click here.

Ryanair fights back

Michael O’Leary, the chief executive of Ryanair, usually described as “colourful”, does not mince his words. He accused the Transport Commissioner, Loyola de Palacio of trying to restore a “communist valhalla” of uniformly high air fares throughout Europe.

Mr O’Leary is going to the European Court of Justice to appeal against the Transport Commissioner’s ruling that the special deal Ryanair had done with Charleroi airport, near Brussels, (incidentally, allowing that airport to survive and turn in a profit) was a case of illegal subsidy. De Palacio also asserted that such a deal could not have been done with a private airport. Mr O’Leary described the ruling variously as “North Korean-style”, “asininely stupid” and, more succinctly, “bullshit”.

Ryanair, according to its chief executive has been inundated with offers from publicly and privately owned airports but fighting the Commission decision was a matter of principle. In his opinion, the Commission was acting against free competition and against the interests of providers and consumers of service. There was no question in his mind: a publicly owned company has the right to make the same sort of a deal as a privately owned one. And it is hard to understand what the Commission wants: for airports to use the subsidy to help keep fares high and undermine their own profits? Would that be a good way of using money?

So determined is Michael O’Leary to fight the case that he is ignoring the fall in his company’s share price.

There is always one…

Despite what was clearly an attempt at news management by the foreign ministers’ collective after their meeting in Brussels on Monday – ensuring that no detailed account of the IGC negotiations reached the media – with a group as large as 25, there is always one who will break ranks. The "grass" in this case is Hungarian foreign minister László Kovács who has confided his inner feelings to the Central Europe Business News agency.

His view is that there is a fifty percent "or somewhat better chance" of reaching agreement on more heavily debated issues at the June IGC although, according to Kovács, last Monday’s meeting left out "the particularly important issue of the voting system". "Views on this issue are still too far apart to warrant discussing it just yet," he said.

Zoltán Horváth, head of the EU department at the Hungarian Parliament’s foreign affairs office, adds to this. "All that was really achieved", he says, "was finalisation of several areas "where member states reached an informal agreement last year". One of these was the general principles of enhanced cooperation schemes. There is to be included a stipulation that at least one-third of the member states must take part – which effectively stops Germany, France and just a few others launching off on their so-called "pioneer group".

Another important compromise was in the method of adopting the EU’s long-term financial perspectives (the budget). It was agreed that the next perspective for the period of 2007–2013 will be adopted with the unanimous agreement of all member states, while a qualified majority would be enough after 2013. This is one to watch, as the veto over the budget is one of Blair’s red lines.

As to the rules on majority voting, Horváth confirmed – as if we did not know already – that the key divisive issue is the concept of a double majority proposed by the Irish presidency. "Compared to last December, when certain member states opposed the whole scheme, now there is agreement on the scheme on the whole, but there is heavy debate about the actual figures defining a majority," he said.

Spain and Portugal are still holding out for a better deal, demanding a population minimum at 65–67 percent on the second-tier majority decision. But that has been rejected by smaller member states, such as Hungary. "I expect tough debate on this," Kovács said.

Nevertheless, some insiders are suggesting that much of what is being released by way of public comment is merely posturing by the political players, manoeuvring for a better deal. The parties, they think, are closer to agreement than the (few) headlines would suggest, with some estimating that there is an 80 percent chance of a deal in June.

French truckers on the move again ... or not

French truckers are complaining again about the fact that they cannot make ends meet. And when French truckers complain others often find that they cannot move at all, as the roads get blocked.

Jean-Paul Grard, president of the UPR truckers' association, told a press conference, that the government had to do something to ensure that French haulier companies survived in business. Specifically, the French government must control European competition. In theory, that is impossible as it would go against single market rules. In practice, we shall have to wait and see.

On the other hand, M Grard clearly understands more economics than the people who set the rules in France and the EU. He argued that these companies must increase their profitability and to that end the government must make working rules more flexible, particularly when it comes to breaks and night-time driving. People, he thought, should be allowed to work more and earn more money if they wanted to.

This is rather a novel idea in the European Union and in France, particularly. Let us hope it all gets sorted out before the French take to the roads in their millions for the vacances annuaires.

Whom do you believe?

As they say, you pays your money and you takes your choice. On the one hand, we are told by Brian Cowen, the Irish Foreign Minister that the chances of an agreement on the Constitution are quite good, adding that the talks the Foreign Ministers held on Monday (May 24) were “constructive”. That is only one stage better than frank and open, but, at least, one presumes the Ministers did not come to blows.

In fact, Cowen was in a very good mood. Or so we think, as it is not entirely clear what he meant when he told the press conference:

"Things are going as we planned them and we hope that by the time we get there... we will be down in broad measure to final political agreement on the major issues, and on that basis we'll be able put a full text that would meet with agreement."

Not to be outdone in obscurantist phraseology, Jack Straw told the same gathering of pressmen and women that he was being “incrementally satisfied” on Britain’s “red lines”. And before you ask, no, I don’t know what that means.

On the whole, though, there seems to be some satisfaction emanating from the Irish corner and a general feeling of let the wind blow where it will from the British one. Enter the Poles, as usual. The Polish Foreign Minister Wlodzimierz Cimoszewicz thought that it was unlikely that there would be an agreement on the vexed question of voting rights, not to mention the rather difficult one of Christian traditions (though not, as he put it, Christian values) becoming part of the Constitution.

The Foreign Ministers are due to have another meeting on June 14-15, for another, allegedly final, show-down about the text that will go to the Summit on June 17-18, the last of these dates, as we keep pointing out, being Waterloo Day. It is odd, though, to recall that the Nice Summit, which had a much more limited programme was scheduled for four days and eventually took up five. For an agreement on an interminably long, difficult and controvesial constitution only two days are scheduled. Whose planning is that?

Just cut out those lunches

Sometimes one reads serious press releases from the European Commission and wonders whether to laugh or cry. Take this one: on May 22 David Byrne, the Health and Consumer Protection Commissioner (a wonderfully Orwellian title) announced “That it was time to take on obesity.”

He was commenting on the fact that the World Health Organization and the UN Food and Agricultural Organization met in Geneva to debate a global strategy, if you please, on obesity. It is, apparently, the latest disease to take the world by storm. No doubt the Geneva conference was marked by a number of lunches, dinners and receptions at which a great deal of food and drink was consumed at the taxpayers’ expense.

The EU is joining in this extremely important endeavour. It is providing its own programme that will also deal with the problem of lunches and dinners for officials. Its aims are:

1. To support the identification and development of effective public health strategies;
2. To provide EU-wide data and analysis;
3. To ensure EU labelling law plays a positive role.

Pompously, the press release adds:

“Most in the public health community share a common analysis of the root cause of the epidemic: a population eating an increasingly high-energy diet but living a sedentary, low energy, lifestyle.” In other words, as the Daily Telegraph put it long ago: “Move more and eat less.”

The trouble is that this advice could be given extremely usefully to all Eurocrats, Commissioners, former Commissioners and MEPs. One and all, they are extremely large, even sometimes obese and all because they hop in and out of cars and taxis and eat huge amounts of rich food. As one member of the House of Lords once put it: “You can always tell the former Commissioners because they occupy two seats on the aeroplane.” They are not the people to lecture the rest of us on obesity but, of course, they are the people to use our money to set up more organizations, more studies, analyses, regulations, anything and everything to save us from our own exertions.

It is worth noting that obesity is not exactly a problem in most of the world. The average North Korean does not suffer from it. Most Africans do not know the meaning of the word. Chinese inmates of slave labour camps are unlikely to hold weekly meetings to discuss the problems of obesity. Plenty of people in other parts of the world, such as the former Soviet republics, while not actually starving, find it hard to understand how a plentiful and varied diet could be a problem. “We should have problems like that.” – they sigh.

Perhaps the EU Commissioners (and WHO and FAO) should spend a little time looking at what causes those more serious food problems. Could it be their economic policies, which skew trade between the EU and the Third World? Could it be the corrupt and corrupting system of aid that keeps certain countries in permanent poverty? Could it be, finally, the support given to appalling dictators, who keep the populations of potentially affluent countries in dire poverty to protect their own power? Answers on a postcard, please.

Meanwhile, the lunches, dinners and receptions will go on.

Tuesday, May 25, 2004

Presidency up for grabs

Giles Merritt, the director of Forum Europe and secretary general of Friends of Europe (there’s glory for you, as Humpty Dumpty would say) has written an article in the International Herald Tribune on the next president of the European Commission.

He does not seem to know any more than anybody else does as to who it is going to be and the chances are Ladbroke’s does not have a book on a subject that is so profoundly boring. However, Mr Merritt is full of advice as to the qualities the next president should have.

“The qualities needed are not quite as obvious as they seem. A high political profile, of course. Just as important will be a taste for the minutiae of international economic policymaking, combined with a flair for showmanship and media relations. The European Union's top job needs star quality as well as technocratic brainpower.

But the most important characteristic will be the one that Europe's national leaders like least - a streak of dogged independence little short of contrariness.”

In fact, Mr Merritt says, rationally enough, the ‘what’ matters even more than the ‘who’. Most of us would add another word from the Elephant-child’s arsenal: ‘why’. What is the Commission president for and do we actually approve of it?

Mr Merritt has his own ideas and, fortunately, has no compunction in voicing them, unlike, say, certain politicians:

“To do the job properly, a commission president must be prepared to defy member governments that seek to impose their national interests, and, when necessary, to appeal to European public opinion over the heads of national leaders.”

Well, now, this is very interesting. Exactly, how is he going to appeal to the European public, given that it does not exist as such over the heads of the democratically elected leaders? Plebiscites? Focus groups? Opinion polls? Just a general article in all the newspapers? Successful demagoguery is bad enough but this particular suggestion seems to advocate unsuccessful demagoguery, that would achieve nothing while undermining the legitimacy of elected national leaders. We hear a great deal of European heritage but one aspect of it is the consistent ability of unscrupulous demagogues to undermine legitimate, democratic and liberal political structures by “appealing to public opinion”. Surely a “Friend of Europe” would know that.

When it comes down to names, the same five get trotted out: Chris Patten, who is in the lead, or would be if the French had not taken a dislike to him and if he were not embroiled in the growing scandal of EU money going to terrorists in the Palestine instead of the Palestinian people; Javier Solana, who may be more interested in being EU Foreign Minister to promote the non-existent common foreign and security policy; Guy Verhofstadt whose over-riding political aim on becoming Prime Minister was, apparently, to destroy the main opposition party, the Vlaams Blok (see A Very Dangerous Precedent); and the present also rans: Antonio Vitorino of whom little is known and Jean-Luc Dehaene, already rejected once and the man who lost the Belgian election as a result of the Dutroux scandal, that is still rumbling on.

Strangely enough, Mr Merritt thinks “that any one of these veteran politicians would probably be a strong enough leader to restore the commission to its position as honest broker and defender of the interests of the EU's 19 smaller states”. I think I’d like to know more about Mr Merrit’s organizations.

How Americans see it

That’s the way with stories about European Parliament ‘perks’: you wait for ages for one and then two come along on the same day. To be fair they were written by the same two journalists but slightly different versions appeared in the New York Times and the International Herald Tribune.

The stories tell nothing new to anyone with the slightest knowledge of how the Brussels gravy train works but to the uninitiated the tale of travel allowances, claims put in as MEPs skip away merrily to the airport, employment of entire families and so on, must seem rather shocking.

The authors point out that all those who call for reform also find ways of justifying the system, that plays badly with the voters.

"I have been accused of boarding the gravy train," said Bill Miller, a Scottish member who argued for reforms. "I have been accused of being dishonest. I've been accused of being greedy. I've been accused of being a parasite. I've been accused of being a leech. And that's just by members of my own political party."

Mr Miller, apparently, thinks that reforms of the system is absolutely essential. Whether he thought that before the former journalist Hans-Peter Martin controversially filmed some of his colleagues saying one thing and doing the opposite is not clear.

And what of the upright Scandinavians? This is how the New York Times article ends:

“Esko Seppanen, a Finnish member of the Green Parties bloc, endorsed reform in a recorded conversation with Mr. Martin just after 8 a.m. one morning last November. He had just signed for his daily stipend.
He noted that all Finnish members support changes in the benefits system. But, he said, while waiting for his free ride to the airport, ‘As long as it's paid, everybody takes it.’”

How true, how very true.

There have to be better reasons than that ... or maybe not

The oddest questions get asked about the European Union and, to be fair, the oddest answers get given by some unfortunate minister.

On May 20 Lord Hylton asked Her Majesty’s Government “whether they will uphold in the European Union a moral vision in its internal and external policies appropriate for a reunited continent”.

The whole thing beggars belief. What reunited continent? When was it last united in one state or political entity? Does Lord Hylton know any history at all? And what’s with the moral vision, as some of my younger acquaintances would say? Is all that minutely detailed regulation of everybody’s life part of a moral vision?

Come to think of it, is the endless kow-towing to some of the world’s worst dictatorships, like China, even North Korea, certainly Iran and so on, just to score off the Americans part of a moral vision? What about the feebleness of the EU’s response to President Mugabe of Zimbabwe? A curious sort of moral vision this is that needs upholding.

However rum Lord Hylton’s question was, Baroness Crawley’s reply was even odder. Without batting an eyelid, she said:

"… the European Union has helped to create an area of peace, prosperity and shared values in Europe after centuries of conflict and instability. The recent accession of central and eastern European countries has dramatically extended this area, reuniting a continent divided by the Cold War."

Well, well, well. We have already dealt with the myth of the EU keeping and preserving the peace that had nothing to do with it. What of those shared values? It seems that a major part of them consisted of "centuries of conflict and instability". Perhaps peace and stability are not part of the European values at all. Or perhaps, Europe has somehow managed to preserve its "shared values" without any help from the eurocracy that skims off so much money and power for itself and its pet projects at the moment.

To read the full debate click here.

And so (not) to the wire


All day yesterday we were getting messages of "confidence" from various luminaries on the European political scene, that a deal could be done on the EU constitution. There was Schröder, who was "quite hopeful", French Prime Minister Jean-Pierre Raffarin, who said today he was "optimistic", and of course Bertie Ahern who has been doing nothing else but exude confidence.

Judging from what was clearly a clampdown on information emanating form the foreign ministers' meeting yesterday, and the diffidence of Brian Cowan, representing the Irish presidency, it is clear that all is not well.

And yesterday was the day that issues other than those primarily concerning the UK were aired. Yet the UK issues have yet to be resolved – at least to the satisfaction of Mr Jack Straw – which means that the number of issues which remain to be agreed at the summit must be quite considerable.

Yet, EU watchers will recall that at the Nice summit, there were only four substantive agenda items, and only fifteen member states negotiating. And that summit wens into an unprecedented fifth day and nearly collapsed over only one of the issues which will again be the agenda – voting rights on the Council.

Now with 25 countries actively engaged in the negotiations and with an unknown but substantial number of equally contentious issues on the agenda, it is hard to believe that any agreement on the final shape of the constitution can be expected, especially as only two days have been allotted for the summit.

In all probability, Ahern has already devised his exit strategy. It may well be that, over the next few days, coded messages will be leaked, suggesting that a final agreement is not being sought at the summit, carefully "spun" to indicate how much progress has been achieved.

The messages will then stress that it would be a mistake to put at risk all this progress for the sake of trying to rush the last fence – or words to that effect. Therefore, the final negotiations will be handed over to the Dutch, who – thanks to the sterling work done by the Irish presidency - will be able to bring them to a successful conclusion.

It could be, of course, that this message is reserved for the summit, when all the heads of states and governments will come out of the conference room after a relatively short time, all smiling for the cameras, to say that they have agreed – in the most amicable way possible – to disagree.

Whatever else happens, Bertie Ahern will not risk pushing to negotiations to the wire if he believes that no agreement can be reached. For the summit to break up in disarray, as it did last December, would spell disaster for the constitution, and seriously damage the EU as a whole.

On that basis, the central question is not so much whether, but how, the negotiations will be called off. The certainty is that they will be.

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.)