Compulsory reading

Reginald Dale, editor of the Washington-based policy quarterly European Affairs writes in The International Herald Tribune on "The EU's foolish idea of selling arms to China". It should be compulsory reading, especially for all UK politicians.

Dale argues that a new strategic confrontation between Europe and the United States is threatening to inflict further serious damage on trans-Atlantic relations. And this time, he says, it is European unilateral action that risks precipitating a crisis.

"The immediate dispute is over a French-German proposal, fiercely opposed by Washington, to lift the European Union ban on arms sales to China imposed after the Tiananmen Square crackdown in 1989. But the broader and equally controversial background to the Franco-German initiative is the EU's drive to forge a strategic relationship with China, independently from Europe's links to the United States."

"It reflects the desires of both France and China to create a multipolar world, in which the United States would be no more than one of several global power centers. The EU, however, risks overestimating its potential influence with Beijing and paying too high a price for a pact with China."

"U.S. officials say that Beijing is taking advantage of trans-Atlantic divisions over Iraq and the war on terrorism to drive a strategic wedge between Europe and the United States, and fear that the Europeans will fall for the Chinese ploy."

The possible lifting of the arms ban, Dale writes, "is causing particular alarm in Washington" but, for now, "the administration does not want a big public fight".

"Washington rightly argues that lifting the embargo would send the wrong political signal by endorsing Beijing's unsatisfactory human rights record, on which it has recently been backsliding. And while EU arms exporters might still not win major contracts, they could certainly provide advanced technology that would substantially increase China's firepower - much of which is aimed at Taiwan and intended to deter the United States from intervening in any conflict over the island."

"Washington is understandably horrified at the thought of its forces coming under fire, or even the threat of fire, from weapons that North Atlantic Treaty Organization allies had helped to produce. New European technology transfers would also heighten the risk of arms proliferation and threaten an uncontrolled free-for-all in which Russia abandoned current restraints on its arms sales to Beijing and U.S. defense industries demanded their share of the action."

"European officials claim that other EU voluntary safeguards would still restrain European sales. That is wishful thinking intended to salve the consciences of EU governments. The Europeans see China as an integral part of their strategy to achieve greater worldwide clout for the enlarged 25-nation EU."

But here is the crunch: "All is not yet lost. A decision to lift the embargo requires unanimity, and Britain - the most important voice besides France and Germany - says it has not yet made up its mind."

Whatever else happens, Blair must stay firm on this and refuse absolutely to give any ground on the arms embargo. But he must also look again at the British involvement in the EU's Galileo project – which threatens to circumvent the embargo. The points made by Gale are echoed in my Bruges Group pamphlet on this and they are very, very worrying.

These are not something we can afford to ignore.

The thot plickens

It seems that the news on Slovak MEP Vladimir Meciar joining the Independence Group/Democracy Group (formerly EDD) - see previous post – is a tad premature.

The alarm was raised by a TEAM member who saw Bonde on Slovak TV boasting of his new recruit, but our Blog has drawn quick denials. His participation had not been discussed, nor agreed upon. The contacts were Bonde's own initiative and Meciar is not a member of the group, despite Bonde's comment on Slovak TV.

What I find difficult to believe is that the famous Jens-Peter Bonde should actually have got something wrong. Surely not!!

Not fair to low fares

One of the boldest and proudest claims of many Europhiles - not least the Independent – is that the liberalisation of “European” skies has led to the explosion of low cost air carriers, bringing cheap fares to the “citizens of Europe”.

But if the Europhiles regard this as one of the "benefits" of our membership of the EU, the low cost airlines themselves seem slightly less enamoured by the "project".

Yesterday, their association, the European Low Fares Airline Association (ELFAA), in a hearing in the High Count in London, obtained a reference to the ECJ to challenge the EU's Regulation on Air Passenger Compensation (Regulation (EC) No 261/2004, otherwise known as the "denied boarding" regulations.

These regulations are aimed – in standard "Euro-speak" - at "ensuring a high level of protection for passengers". They require carriers to pay compensation to passengers for delays and cancellations, once they have been checked-in. On short-haul flights, carriers must pay 250 euros. With longer flights, the sum can be up to 600 euros.

The High Court agreed with the 11 members of ELFAA members represented that the regulations, which come into force in February 2005, "would cause great damage to the European airline industry" and therefore requested the ECJ to deal with this case as a matter of urgency.

But what also irritates the airlines is that the legislation not only makes them pay when it is their fault but also holds them responsible for all long delays and cancellations outside of their control, such as when the air traffic system goes down. In all, they argue, the law is disproportionate.

The point, however, is that the compensation required could – and in many cases will – exceed the cost of the tickets issued by low cost airlines, which can be as low as 16 euros. Since there is no such thing as a free lunch, the net effect will be to drive up ticket prices, making low-cost fares a thing of the past.

That might be all right for the MEPs, who get their expenses paid, but for the millions of travellers who have benefited from low fares, they might have cause to resent the "high level of protection for passengers" the EU has so graciously afforded them.

But at least we will be spared the Europhile bleating about how they have brought low air fares to Europe.

Removing the Mote

Whether or not Jens-Peter Bonde does decide to remove Vladimir Mercia from the ranks of the EDD (see post below), he is already certain to lose another MEP from his team.

The departing figure is Ashley Mote, one of UKIP’s South-East Region MEPs. He is facing trial in November on eight counts of theft and false accounting relating to the claiming of housing benefit. The sums involved are said to be in the order of £70,000.

Since Mote did not inform his own party of the impending prosecution, he was in breach of the party’s selection rules, but he has nevertheless refused to stand down. In desperation, party chiefs have now decided to withdraw the whip from Mote, which means that he will also be expelled from the EDD.

However, under the arcane election rules for MEPs, Mote cannot be removed from his seat, so he will remain an MEP – as did former UKIP leader and MEP Michael Holmes when he resigned the party after being elected in the 1999 elections. Holmes finally resigned as MEP in 2003, to be replaced with Graham Booth.

The news of Mote’s departure will undoubtedly be embarrassing for UKIP, not least as the party stands on a platform of rooting out corruption and dishonesty in the EU. However, having now removed the Mote, it will possibly be better equipped to remove the beam, albeit with reduced ranks of 11 MEPs.

A wolf in sheep’s clothing

Much joy was expressed in the Eurosceptic (realist) EDD group in the European parliament (home of UKIP) when Jens-Peter Bonde succeeded in recruiting Slovak MEP Vladimir Meciar, of the party LS-HZDS, to join them.

This coup has, however, brought a squawk of protest from TEAM, the "European alliance of EU-critical movements". It has pointed out that the LS-HZDS is "not in any meaning" an EU-critical party and they have a "very positive attitude" towards the EU. Initially Eurosceptic, Meciar has "changed a lot and to gain the acceptance of EU. He would do anything for them".

More embarrassingly, Meciar has come out openly in the Slovak media declared his party's opposition to a referendum on the EU Constitution. They support and agree with the constitution.

Will Bonde now do the decent thing and chuck Meciar out?

A cost too far?

Ian Milne's full analysis of the net economic costs and benefits for the UK of EU membership is now available from Civitas.

Unfortunately, the text is not available online, but the pamphlet can be ordered through the Civitas website. A summary can also be accessed on the same site.

We will be carrying out a full analysis of this important study.

Another "victory" on the way?

Contrary to the speculation of my esteemed colleague, the commission decided after all to bite the bullet and launch its much leaked proposals for dispensing with Britain's budget rebate.

This, however, is only one side of the package. The EU is also demanding more money from its increasingly unwilling contributors, aiming to bring spending over the period 2007-2013 to an average of 1.14 percent EU gross national income (GNI).

This is somewhat more than the cap of 1.0 percent of GNI demanded by the EU's six biggest net contributors in December and would increase EU expenditure from 120.7 billion euros in 2006 to 158.5 billion in 2013.

The demand has prompted some media sources to chirp happily that the commission is putting itself "on a collision course" with the EU's richest countries. But this is, in fact, just the early stages of the political manoeuvring. The horse-trading will start in earnest in September when the finance ministers meet.

Prodi says the cash is needed to meet challenges in the years ahead, not least coping with the accession countries, as their full entitlements to CAP subsidies and structural funds kick in. But then the demob-happy Italian can afford to say that. He will not be around when the negotiations come to the crunch. That will be the unhappy lot of Jose Manuel Durao Barroso - assuming the socialists in the European parliament can swallow their pride and vote for him.

Barroso himself, no doubt with an eye on his confirmation proceedings, is calling the 1.0 percent spending cap "fundamentally flawed". Chris Patten, on the other hand, no doubt with his eye on the EU constitution referendum, is saying that he is "deeply disappointed" that the proposals "will set back our ability to argue a positive European case in the UK".

Britain, of course, in the form of Europe minister Denis MacShane, is uttering ritual denunciations, claiming that the rebate is "not on the table". But that too is the opening bid. The question is not whether the UK will eventually cave in, but how it will be dressed up to look like one of Blair's famous "victories".

Barroso plays bland

José Manuel Durao Barroso is facing up to the first of his several trials. As yet he does not have to sort out the situation with the Growth and Stability Pact. That is still to come. He is simply going through the process of being vetted by the different European Parliament groups, prior to a binding full vote on his candidacy on July 22.

As this was the hostile left wing group of Socialists and Greens, he had to tread very carefully. After all, he was facing up to really profound political questions like this one from Johannes Voggenhuber, an Austrian Green, who asked:

Are you more loyal to the United States than to Europe?

Presumably, Senhõr Barroso is most loyal to Portugal, but one is not really supposed to say that during these sessions.

Instead he explained that he was in favour of deeper European integration “but this does not mean I am a federalist”.

Similarly, he thought that there should be close links between the EU and the USA and explained that as Prime Minister of Portugal, an ally of the US, he had to back the war. But he did not like American “arrogance”, and he did not like unilateralism, adding that in bilateral talks he always called for multilateralism. (All these lateralisms are very confusing. If the USA had so many allies with whom it conducted bilateral or trilateral talks, how can it be accused of being unilateral?)

Kyoto? Top priority for the new Presidency. Why? Who knows?

Turkey? Absolutely. Must get them in as soon as they fulfil all the necessary conditions.

We shall watch with interest the discussions with the Liberal Democrat group, the conservative EPP and, possibly, the newly formed stronger eurosceptic group that includes UKIP and the Danish June Movement. What, one wonders, will the President designate say to them?

How Americans see it

I avoided my colleague’s agony this morning by ignoring all British newspapers. Instead, I read the Wall Street Journal Europe and the International Herald Tribune. Both these American newspapers carried articles on the ECJ decision on their front pages, with a follow-up analysis inside the paper and, in the case of the WSJE, an editorial.

These are, one could argue, European American newspapers, aimed at a European audience. But they are English language newspapers, aimed at Anglophone readers and cover news from all over the world. The ECJ decision would be of interest to their readers but not of vital importance as it is for all member states of the European Union. (And that, ladies and gentlemen of the press, who are soooo bored with Europe, means the United Kingdom as well.)

The International Herald Tribune (the Trib, as it is known by its many readers) struggles to explain the decision that gives a little bit of something to everyone and gets the EU no closer to a solution of how to impose fiscal discipline on the member states, though they, too, seem to be under the illusion that the Pact applies only to the euro countries.

There is only one conclusion the newspaper can come to and to reinforce it , they quote the chief strategist at Invesco, an asset management firm in Frankfurt:

This is a political process. People in the market know that the stability pact is, de facto, dead.

As is the growth pact, presumably.

The Trib’s prediction is that the Pact will be kept but watered down considerably. In any case, as they rightly point out:

As a practical matter, the French and German cases will be considered under the existing rules.
That sets up the likelihood of another meeting of finance ministers, at which they will be asked to vote on whether to impose sanctions on Paris and Berlin for failing to meet deficit targets.
As the court noted, the ministers could rebuff the commission by failing to muster a majority vote. What the court objected to was that the ministers supplanted Brussesl with their own recommendations.

The article ends with a quote from Paul De Grauwe, an economics professor at the Catholic University of Leuven in Belgium:

We should have a little more confidence in our political system. We’ve been living in Europe for more than 50 years since the war, as we haven’t has a catastrophic debt crisis yet.

Clearly Professor De Grauwe’s understanding of the political process that underpins the drive to a single economic system is not as good as his economic knowledge.

The Wall Street Journal Europe describes the ruling and, indeed, the Pact itself as “unlikely to have any teeth”. (As a matter of some interest, where did the British media led by the BBC get the idea that this was a victory for the Commission?)

Indeed, the editorial of the WSJE seems to agree with some of our assessment both of the decision and of the media coverage:

Outside of Paris and Berlin, most of the reactions to the decision focus on the fact that the court annulled one narrow aspect of the decision made in November 2003 to hold the excessive-deficit procedure against France and Germany in abeyance.

In other words, the Court agreed that the Council has every right to reject the Commission’s demands (and, given that it is on QMV, probably will). What it has no right to do is change the actual rules.

For some reason, however, the editorial comes to the conclusion that

In the event, the decision was Solomonic, and reconfirms what should have beenb clear from reading the treaties in the first place: the EU is composed of sovereign member states that still possess the right, in many areas, to call the shots.

We recommend the editorial writers of the Wall Street Journal Europe that they read the treaties yet again. Though, actually, when one thinks about it, perhaps they should simply think a little more clearly what “sovereign states” means. If they have the right to call the shots in “many” areas, not “all” or even “most”, the definition starts slipping a little.

A little bit of common sense would not come amiss

During a starred question in the House of Lords (a seven-minute debate on a subject raised by one of the peers) by Lord Harrison on the well-worn issue of the need for accuracy in giving information about the EU and the Constitution in particular, the Earl Ferrers raised an interesting point. He asked the Baroness Symons of Vernham Dene, who was replying on behalf of the Government:

Does the noble Baroness not agree that Brussels determining the size above which a rocking horse may not be built is absurd? Why does Brussels involve itself in that kind of thing? Why should we sign up to that kind of thing?

Let us recall that we have, in fact, signed up to a great deal of “that kind of thing”. Nevertheless, Lady Symons’s reply was extraordinary in its complete lack of common sense:

My Lords, I agree that some of the issues covered by the single market provisions look very silly when taken out of context. But when they are looked at as safety provisions – I am sure that the noble Earl would not wish his grandchildren to be riding on unsafe rocking horses – perhaps they look a little different.

This was the end of this particular debate, but I suspect that the noble Earl and various other peers would have pointed out that he (or the Baroness Symons or, indeed, most of us) would be able to decide whether a rocking horse was safe or not, without a long and detailed regulation put together and issued by a large number of highly paid bureaucrats.

Click here to read full debate and the one after it on the EU External Action Service.

Chirac agrees referendum

Chirac has finally done the deed – agreeing during a Bastille Day television broadcast, commemorating the French Revolution of 1789, to hold a referendum on the EU constitution.

With opinion polls currently showing a majority in favour of the constitution, he plans the poll for the second half of 2005, which means that it may be held a full six months before the British EU referendum.

In announcing his decision, Chirac declared that he had "confidence" in the French that they would not reject the constitution. "They will therefore be directly consulted," he added.

A dangerous vacuum of power

Comment on the coverage of the ECJ ruling of the Growth and Stability Pact

Those of us who are dedicated "EU-watchers" perforce tend to accord more priority to EU news and developments than the media at large, and are sometimes puzzled at the lack of coverage in the mainstream media.

By any measure, however, one would have thought that yesterday's ECJ ruling on the growth and stability pact was important at several levels. Firstly, it represented a stage in the age-old battle between the two institutions of the EU – the council and the commission – as to which was dominant in a key area of policy, and secondly there was the immediate issue of the economic management of the eurozone.

In reviewing the coverage of these issues by the broadsheets, therefore, one has to raise an eyebrow at the news values of The Times, which found that the BBC selling off its Tellytubbies merchandising operation worthy of front page coverage, consigning the growth and stability pact judgment to a down-page item on page 14.

But at least The Times did cover the issue in the main paper, whereas The Daily Telegraph banished the admirable Ambrose Evans-Pritchard to the business pages, with a "City Comment" on the back page.

The Guardian and Independent, however, both covered the issue in their main pages, although one needn't bother with the Guardian story apart from a comment from Chris Huhne, the Liberal Democrat MEP, said Brussels had won "a pyrrhic victory". That is somewhere near the truth – as long as you delete the word "victory".

The Independent puts it more succinctly: "Euro stability pact rule book in chaos after court ruling". Its view is that:

The decision marks a symbolic victory for the European Commission which took the unusual step of taking EU finance ministers to court when they failed to back its measures against Paris and Berlin last year. But the ruling in the European Court of Justice is unlikely to change the balance of power within the EU, because the court also said EU finance ministers could have used other procedures to block action against France and Germany while remaining within the law.

As for the broadcast media, I can no longer stand watching television news, so I neither know nor care what was on the box.

As for the radio, this morning, as far as I could ascertain, the BBC Radio 4 Today programme – the supposed agenda-setter – was still indulging its obsession with Iraq, looking forward to the publication of the Butler Report, which was expected to highlight failures in the Intelligence Services. All one can say of this is that the Times letters of yesterday had it, recording an observation from Dr Nick Megoran observed that he had learned as a schoolboy that "military intelligence" was an oxymoron.

Returning to the Telegraph, I hope Ambrose did not write the City Comment as it perpetuates the myth that Prodi called the growth and stability pact "stupid". In his original comments of 17 October 2002, Prodi actually made a different point – his view was that the "stupidity" was not the pact itself but that the Commission lacked the power to enforce the rules.

That much has now been confirmed by the ECJ. But putting the Council "in the frame" means that there are now no enforceable set of rules, leaving a dangerous vacuum of power at the heart of the eurozone. That really is news.

A permanent seat on the UN Security Council

One of the purposes of Joschka Fischer’s extended visit to South-East Asia is to drum up support for the German campaign to get a permanent seat on the UN Security Council.

Their very reasonable argument is that the five countries who do have a “coveted” permanent seat are the USA, UK, France, Russia and China, representatives of the 1945 world that has changed unrecognizable. Part of the change has been the fact that it is not the same China that sits there now and a very different Russia but these are details as far as the German government is concerned.

Furthermore, German troops are involved in peace-keeping operations in many parts of the world – not in itself a necessary pre-requisite for a permanent seat.

There is a feeling that the campaign will be looked on favourably by India who also wants a permanent seat on the Security Council. Presumably, if that happens, Pakistan will demand equal rights and the Security Council will grow and grow. Given that the organization already finds it difficult to come to any kind of a politically complicated decision, one wonders how a Council of a dozen permanent members as well as, presumably, an equal number of rotating ones will operate.

There is, however, one big problem with the German aspirations: Germany together with France are the two main supporters of the idea of a common foreign and security policy for the EU, headed by a single Foreign Minister. If the EU Constitution will go through, that will happen automatically. Judging by the way Solana’s position was confirmed by the European Council, the plan is being put into place with or without the Constitution. But, surely, if there is one foreign policy and one foreign minister, it will be the EU that will want to have the seat on the Security Council.

Of course, the EU belongs to the post-1945 world that is, according to German arguments, fast vanishing but has that been clearly recognized by the same German government?

Do as I say...

The six original members of the EEC - and the EU's most vocal advocates of greater integration - have the worst performance in transposing EU law in their domestic law books.

Of those, France and Italy together accounted for 30 percent of all infringement cases filed for failure to transpose. Italy has almost 150 pending cases, more than Denmark, Sweden, Finland, Luxembourg and Portugal combined.

Among the older 15 member states, only Ireland, Britain, Denmark, Spain, and Finland met target figures. There are differences amongst the accession states as well. Lithuania has only 12 directives left to transpose, while Malta has more than 600.

Internal Market Commission Frits Bolkestein, at his tactful best, would merely say, "Some are consistently worse than others and need more political commitment to meeting legal obligations. Everyone loses if some do not play by the rules."

One wonders if he has considered the possibility that those who do not play by the rules actually gain - which is perhaps why they have not transposed the EU laws in the first place.

Will they postpone a decision on the rebate?

It seems that there is a possibility that there will be no announcement today about the plan to scrap the British rebate as part of a complete restructuring of the financing system that is being worked out by the Budget Commissioner Michaele Schreyer. The whole plan will possibly be outlined publicly in a week’s time.

According to internal EU documents, German commissioner Schreyer wants to replace the rebate with "corrective measures" for all countries whose net contribution to the EU budget is greater than 0.35 percent of their gross domestic product, with a ceiling at 7.5 billion euros.

This is being opposed by Britain, for understandable reasons and France. As we have surmised before, there is a strong possibility that the new system would turn France into a net contributor, not something the French government is likely to support. Other countries, such as the Netherlands, might find that idea attractive but there is only so much communautaire feeling the French will permit themselves and Bastille Day is no time to start increasing that.

Curioser and curioser

This morning’s ECJ decision seems to have flummoxed many people. The clearest comment so far has come from Professor Tim Congdon, the author, most recently of Will the EU’s Constitution Rescue its Currency?, published by the Bruges Group this week. His reading of the situation was that the decision reveals a power vacuum at the heart of the “project”.

If, as the ECJ has decided, the Commission had no right to take the matter of the Council decision to court, then who does have that right? And if this was an irregular appeal, why did the ECJ, having decided on that, go ahead and make a decision on the substance of the matter, anyway?

Then again, if these decisions are left to the Council, will they ever be taken? The Council decides by QMV. How likely is it that the larger delinquents will allow any penalizing decision to go through? And if the larger countries cannot be disciplined, how are the smaller ones to be made to jump through the hoops?

Even supposing the decision is taken: how will it be enforced?

Meanwhile, other commentators interpret the decision any way they want to. This is, presumably, how the Delphic Oracle worked. Most of the British media has decided that as the ECJ has said that the rules must be obeyed, this is a victory for the Commission.

The Commission appears to be less enthusiastic. Perhaps, it noted the fact that its right to take the Council to court over the Pact has been disallowed. Its somewhat mealy-mouthed comment is:

In particular, the Court ruling confirms the Commission’s view as to the respective roles of the Commission and the Council in the application of the Stability and Growth Pact making thereby budgetary policy coordination more transparent and more predictable in the future.

The Commission’s press release also tries to clarify the situation as it now stands:

As the ruling states, the Council’s conclusions of 25 November are thereby annulled. The situation prevailing at the moment is the one of the 24 November. The Council recommendations under Article 104(7) adopted for Germany and for France remain the only legal text valid. The Commission in cooperation with the Council will consider how to ensure a satisfactory resolution of the budgetary problems of these two member states within the framework of the Stability and Growth Pact.

Not exactly full of joy, is it. The Commission does, under the ruling, have the right to recommend yet again excess deficit procedures, but has already announced that it is likely to review the stringent rules. This will not be welcomed by the smaller countries, who feel that they have had to work very hard to keep their deficit within the allowed limit, while France and Germany can ignore them in a cavalier fashion. And the new Commission President will be from one of those small countries, who has already had a great deal of political trouble because of his determination to sort out Portugal’s financial situation.

Meanwhile, the German government has also welcomed the decision, having looked at another aspect of it. Speaking on behalf of the Finance Minister, Jörg Müller said :

"We welcome the ruling by the European Court of Justice. It affirms the legality of the decision by the council of ministers on Nov. 25, 2003."

He then added that “the court also noted that "responsibility for making the member states observe budgetary discipline lies essentially" with the ministers. Which is true. Something for everybody.

To make life even more interesting, the German opposition politicians have called the decision a “slap in the face” for Finance Minister Hans Eichel. The supposedly neo-liberal Free Democrats (FDP) have called it a victory for the euro. Silvana Koch-Mehrin, the leader of the parliamentary group, said that the Commission President designate now has the

"opportunity to demonstrate his independence and commitment to principles, which the German and French government have tried to undermine with their questionable finance policies,".

Just as soon as he works out what it is the ECJ actually said, presumably.

The Deputy Leader of the CDU parliamentary group, Friedrich Metz thought that this was a serious defeat for all those who wanted to water down the Stability Pact. (It seems he does not remember the Growth part of it.)

As they say, you pays your money and you takes your choice.

Another twist in the saga

The battle for power between the Commission and the European Council continues. The Council, as our readers may remember, failed to agree last November about the need to discipline France and Germany for breaking the terms of the Growth and Stability Pact, specifically in the question of the deficit.

The Commission, as the guardian of the Treaties (and the Pact does rely on Article 104 of the Treaty Establishing the European Community) took the Council to the European Court of Justice.

This morning the Court delivered its judgement, which adds another interesting twist to the painful saga of the Growth and Stability Pact. The Court has decided that the Commission had no right to take the Council to court, as the duty to enforce the Pact belongs to the Council and there is no higher power as far as that is concerned.

On the other hand, the Council ought to have enforced the Pact and, therefore, the Court has struck down its November 25, 2003 decision not to issue strong warnings to France and Germany.

And where do we go from here?

We shall analyze the decision in some detail on the blog. In the meantime, our readers might like to see the text of the ECJ’s press release.

Germany also in the firing line

It is not only the French who are in the firing line, with their fatal obsession for giving state support to failing companies. The Germans too are taking flak from the commission, which is ratcheting up the ante on a long-standing and bitterly-fought dispute – the rules on foreign take-overs of German enterprises.

At the centre of the dispute is the car maker Volkswagen, which is protected by local law from take-over – preventing any one shareholder owning more than a 20 percent stake - contrary to the EU's laws on the free movement of capital.

After three years of delay, the commission has lost patience and has given Germany a deadline of next Tuesday to commit itself to revising the law, other which Brussels sees as violating rules on the free movement of capital within the European Union. A refusal, the commission has indicated, will force a hearing in the ECJ.

But there is much more to this than meets the eye. The VW firm is part-owned by the Land (Region) of Lower Saxony, of which Schröder was once president, who also sat on the VW board. And it is this type of financial arrangement – replicated in other Länder with other major firms – which underpins the autonomy of the German regional governments.

The commission, therefore, is challenging the core political structure of Germany, where regional loyalty is much stronger than is any feeling towards the federal government. This is almost a case of the irresistible force meeting the immovable object.

What will lend greater interest is how commission-president designate Barroso will handle the issue. No friend of state intervention, his instinct will undoubtedly be the commission action. But, with the ECJ judgment on the growth and stability pact imminent – and the prospect of fining both Germany and France a real possibility - he may find he has bitten off more than he can chew.

The elephant in the room

Yesterday evening Michael Howard, the Leader of the Conservative Party, gave the main speech at the Annual Meeting of the Centre for Policy Studies, in which he outlined the party’s policies and even its vision of the sort of Britain he wants to see.

Although Ruth Lea, the Director of CPS said in her own speech that the Centre has in the last year concentrated on three issues, the economy, public services and the European Union, Mr Howard kept to the first two. It seems the Conservative leadership has convinced itself that there is no need to think about the European issue, as people are not interested in it. Unfortunately, that point of view is no longer accurate. More and more people do care about Europe.

Mr Howard’s slogan for the party is “Big people, small government”, a slogan most of us can sympathize with. He talked much of the need for giving choice to all, not just those who happen to be well off; he outlined the astonishing growth of bureaucracy in this country, despite the threats of ever larger cut-backs by the Chancellor.

Britain, as Mr Howard rightly pointed out, has slipped in the competitiveness chart from number five to number fifteen; it is also the slowest growing economy among the major English-speaking country. One cannot help wondering why that is so. The regulation and public sector obsessed government, certainly, but could there be another reason? Could this lack of growth and slippage in competitiveness have anything to do with the fact that Britain is the one major English-speaking country that belongs to the European Union?

The first question one was a bit of a facer. He was asked if he could give a clear message on the Tories’ European policy. The person who asked the question was one of the many thousands of Conservatives who had voted UKIP in the European election because of their clearly enunciated policy on the subject. There was a strong applause after the question and considerably less applause after Mr Howard’s reply.

He said quite firmly that he was not going to say that we must come out of the European Union and explained equally firmly that in the general election the choice will be between a Labour Government who will give everything away and a Conservative one, who will go in there to get various powers back.

This, of course, is the Conservative calculation: that people will not vote UKIP as there is no chance of that party forming a government. And faced with the choice outlined above, they will return to the fold. Alas, it is not so. Enough people may vote UKIP because they feel the Conservatives need to start listening to what the voters want to undermine their chances of a come-back. And the threat of a complete Labour sell-out to the EU is not much of a threat for those who remember similar sell-outs engineered by Tories.

Mr Howard’s policy is to win the referendum (not, actually, a given) and then go to Brussels with a strong hand and renegotiate various matters so that powers will be repatriated. Strong hand or not, many of those powers are inscribed in treaties, which can be changed only unanimously. What Howard’s way does not allow for is the very great likelihood that the renegotiations will fail. What is the fall-back position? What threats will the Conservatives use if they do not get their way?

One thing is certain, it will not be a military threat. On the day that we hear of the MoD spending over £3 million on chairs for its civil servants (as part of a mega-refitting of the Department) while Geoff Hoon prepares to announce the most swingeing cuts in military forces yet, Mr Howard could not give unequivocal assurances that the Conservatives will deal with the matter differently.

What makes Mr Howard think that people will vote Conservative if there is no clear message on Britain’s relationship with the European Union, that is, in effect, this country’s constitutional future and if Prime Minister Howard will, just like Prime Minister Blair, send British troops all over the world, without allocating proper sums for recruitment, training and equipment?

Perhaps, he should finally acknowledge the elephant in the room.

Another dubious ally?

Eurosceptics who were applauding "plucky Poland" when it crashed the summit last December, may have cause to re-think their view.

Polish foreign minister Wlodzimierz Cimoszewicz, during a meeting with his EU counterparts today in Brussels, added his weight to the calls to remove the UK's budget rebate.

"We do not want to make life harder for British taxpayers", he said, "but on the other hand our feelings are ambivalent when we think that poor Polish taxpayers must fill the gap in the EU budget resulting from the British rebate".

On Wednesday, the Commission is due to unveil its much-leaked proposals for dispensing with the UK rebate, adopting the alternative strategy of "rebates for all".

With Poland weighing-in with its support, Blair is going to find it that much harder to resist the pressure for change.

Rome in October

It's official – foreign ministers of EU member states have agreed that the EU constitution will be signed on 29 October, at a special ceremony in Rome. It will be at the same site where the Treaty of Rome was signed in 1957.

Berlusconi had said that the signing would be on 20 November, but the date has been changed to allow Prodi – with only two days before the end of his term - to join in the signing ceremony.

Then the fun will start, as the 25 member states race for ratification, and the project drains into the sand.

Crisis averted

With resignations imminent in the Tory MEP group last night, a crisis seems to have been averted following a last-minute deal.

Howard has agreed to a re-structuring of the Tory group within the EPP, so that they can work to their own agenda and do not have to accept the leadership of Poettering. The Tory MEPs are to form their own quasi-autonomous grouplet, including Poles, Czechs and one Cypriot.

Quite how the parliamentary authorities will react is not known, but the very essence of an EP group is that, to qualify, it must share the same constitution. The whole EPP is now open to a challenge by any of the other groups, which could force the authorities to break up its structure.

Why the Tories have to go through these tortuous convolutions instead of doing the decent thing and forming their own group, goodness only knows.

Commission flexing its muscles

Our new government over the water is laying down the law on assistance to companies in financial difficulties. As of October 2004, they will be required to raise the bulk of any restructuring costs from their own resources and will only be able to receive aid once in a decade.

The conditions are set out in new guidelines published by the commission on 7 July 2004. They are aimed in particular at big pan-European companies, in the wake of the 3.1 billion euro aid package of the French government given to troubled engineering giant Alstom.

How the French, or for that matter the Germans – will respond remains to be seen, but the French in particular are now beginning to find that they are less in command in Brussels than they would wish to be. However, for the average French citizen, who is blissfully unaware of the powers which have been given away to Brussels, a rude awakening cannot be long in coming.

The Common Foreign Policy at work

The EU foreign ministers are meeting in Brussels today. Well, all except one: Joschka Fischer is travelling in Sudan where he has been issuing strongly worded statements about the situation in Darfur. His view is that the EU is not doing enough to help. That is something of an understatement. The EU, or, rather, two of its member states, Britain and France are opposing even the mild suggestion of UN sanctions. Russia is opposing them, too, arguing that Darfur is an internal Sudanese matter, not for the UN to deal with. And President Putin knows a good deal about internal matters of dubious human rights record.

After a statement by Secretary of State Powell, it is beginning to look that the USA will take a stronger line on Sudan. Whether that will translate itself into direct action and what kind of direct action can be taken, remains to be seen. But as we have pointed out before, the only stated purpose of the EU common foreign and security policy is the introduction of the supposedly European values (give or take a few historical hiccups) of freedom, democracy and human rights.

The other item on the agenda is the third EU peacekeeping job in Bosnia-Herzegovina, where they will be taking over the leadership of SFOR from NATO. The important part of it has already been decided: at the request of the French the operation will be renamed ALTHEA. The rest remains somewhat dubious. As Deutsche Welle reports:

After considerable delay, the international computer deployed a mass number of peacekeeping troops to stop the civil war between ethnic-religious groups in Bosnia-Herzegovina.

The most important event of the meeting will be lunch with the new Iraqi Foreign Minister, Hoshyar Zebari. The EU, in its usual disregard of everything except superficial structures and the constant desire for one-up-manship over the USA, is crowing about the fact that the first official visit by a member of the new government will not be to the United States but to the EU. (It was going to be the Prime Minister, Iyyad Alawi, but he has decided that the security situation was too tense for him to leave the country.)

Almost certainly, the new Iraqi government does want to display its independence but the visit to Brussels will be combined with another discussion with NATO, presumably asking that increasingly cantankerous organization to come up with some more detailed proposals of the help it is theoretically offering the new regime.

The EU itself, as Deutsche Welle points out, remains divided on the subject of Iraq, not a few senior politicians probably a little worried as to what might come out on the subject of their deals with Saddam, not to mention their involvement in the food for oil scandal.

In the preparations for the meeting with the Iraqi foreign minister, the EU foreign ministers only succeeded in uniting on one front: a generally reserved statement offering Iraq help with its reconstruction and the organization of free elections. The brakes were applied to broader demands from Britain and Poland, which both have troops stationed in Iraq, by war opponents Germany and France, diplomats told Deutsche Welle.

Presumably, Mr Zebari is aware of all these problems and of the historical background. We shall see how much he will be able to carry away in concrete terms.

What are we to do about Russia?

Russia has been hosting visits. First our own Foreign Secretary, Jack Straw went for a day, then Chancellor Schröder. No doubt, there will be others. What these two visits had in common was a reluctance to raise awkward questions in a country and to a government that abounds with awkwardness.

The German media spent some time sneering at the fact that Schröder refused to discuss the Yukos case with Putin. (Jack Straw had not mentioned it either.) In reply Shcröder mumbled some explanation that a country has the right to collect taxes from its companies and citizens. Well,he should know. The German government is so anxious to collect taxes that it is driving all business and investment into other countries.

Nevertheless, this rather disingenuous statement ignores certain aspects of the Yukos case. One is the persistent opinion that the attack on the company and its largest shareholder, Mikhail Khodorkovsky, came as he was trying to change the running of the company to more accepted Western ways, which would have involved fewer bribes to officials and, above all, as he began to display an interest in entering the political field. Up with that Putin would not put.

The trial is due to start today and there is a strong possibility, reported in the Sunday Telegraph yesterday that the government will move in to seize Yukos's oil and hand the marketing over to Gennady Timchenko, an oil trader, friend of Putin and former KGB officer, in fact, one of Putin’s own oligarchs. Would these things not be worth mentioning?

The attitude of European ministers and leaders to Russia is very different to that of Secretary of State Colin Powell, who, after his last visit a couple of months ago, wrote a strongly worded article telling the Russian government that if it wanted to be part of the western world, it had better clean up its human rights record.

Nothing much has happened on that score and the European proponents of ethical foreign policy have kept conspicuously quiet.

Menawhile Le Monde has reported another interesting fact. Apparently in February the Americans repatriated seven of the eight Russian citizens from Guantanamo, much against their wishes. Clearly, they knew that, with all its problems, Guantanamo was preferable to the prison system in Russia. All seven, who were clearly Chechens from their names, have disappeared.

According to the article, the American authorities have shrugged their shoulders, pointing out that once they repatriate the prisoners, they have no more interest in the subject. But whatever happened to the European opinion formers who have been hyperventilating about Guantanamo? Why have they not expressed some interest in the fate of the Chechens? Human rights organizations in Russia who encountered ever more problems with the authorities, have tried to raise the issue as they have tried to interest the West in what is going on in Chechnya in general.

Alas, neither Foreign Secretary Jack Straw nor Chancellor Gerhard Schröder have been listening. It is not part of the ethical foreign policy to worry about what is going on in Russia.

EPP - Tory shock imminent?

Following the news that a rebellion was brewing in the Tory MEP ranks over the EPP "Budapest Declaration" click here, important developments are expected today.

Sources indicate that there may be one or more high profile resignations from the Party which, on the eve of two crucial by-elections, will be unwelcome news for a hierarchy seeking to present a united front on the EU.

If confirmed, this will bring into high profile the festering sore in the European parliament, since Tory members were obliged to join the staunchly federalist European Peoples' Party by direct order of Mr Howard.

What has proved to be the last straw for some members is the EPP's declaration in Budapest that the Convention must "...be ratified and then implemented", a stance that is in total opposition to declared Conservative policy.

Mr Howard may now have to explain publicly why he has forced his MEPs to join a political grouping that is making no attempt to conceal its full support for the constitution.

The procurement scandal

In today's Sunday Telegraph, Booker’s main story deals with the growing scandal of the EU’s procurement system.

The focus of the story is a letter to Gordon Brown, sent by the chairmen of the UK's four social housing federations - representing nearly 2,000 housing associations, which provide homes for 3.6 million people. This warned him that, thanks to a 2001 ruling by the European Court of Justice, a significant chunk of the £7 billion spent by housing associations each year will have to be brought into the net as public expenditure, from which until now it has been excluded.

The story continues:

The letter, from the heads of the English, Scottish, Welsh and Northern Ireland housing federations, told Mr Brown that, under the ECJ ruling, they count as "bodies operating under public law". Not only does their spending - most of it privately financed - now have to be included in public expenditure under the requirements of the growth and stability pact, but, as "public bodies", they have to comply with the EC's three "procurement directives".

The first and best known condition of these stipulates that all contracts for works and services above a certain value must be advertised in the EC's Official Journal, theoretically to allow firms from all over the EU to bid for the work. But when the federations looked further into the procurement procedures, they found that these amounted to 350 pages, significantly changing the way housing associations are allowed to operate and landing them in a labyrinth of time-consuming bureaucracy. Richard Clark, the chairman of the English National Housing Federation, said: "Time and money that could have been used to provide better homes and services will instead be spent complying with regulations from Brussels."

Aware of the implications both for the housing associations and for the Treasury, in February 2002, the Government protested to the European Commission. The commission replied that it would take Britain before the ECJ. In face of this threat, the Treasury's Office of Government Commerce has recommended that the Government should back down - which is what has now prompted the alarmed federations' call to Mr Brown to fight on.

But Booker, as always, does not leave it there. "The 'procurement regime'", he writes, "is one of the greatest, if largely unreported, scandals of the EU. As can be seen from the advertisements in the daily Official Journal, Britain is far more punctilious in obeying these rules than most other countries, just as it is in obeying the rules on 'illegal state aid'."

For an example of the lack of reporting, he cites Radio 4's Today programme last week, when Derek Simpson, the leader of the trade union Amicus, called for more of the £109 billion we spend on public procurement to be diverted to British firms, to boost manufacturing jobs, neither the interviewer, James Naughtie, nor the minister Patricia Hewitt, pointed out that this would be prohibited under the procurement rules.

Mr Simpson asked why Britain was about to lose its last train-building capacity when every train in France or Germany is built in those countries. Neither Mr Naughtie nor Mrs Hewitt explained that this was because both those countries were in flagrant breach of the procurement and state-aid rules, which is why our steel, shipbuilding and coal industries have found it so difficult to compete with their state-subsidised Continental rivals.

The inability of the "establishment" to understand what is going on is legion – and puzzling. As another example, the NFU – backed by the Farmers Weekly – has been running a campaign aimed at convincing the Department of Defence that it should buy British farm produce. Yet, despite being told innumerable times, the NFU consistently ignores the salient fact that the DoD is bound by procurement rules and could not favour British producers without breaching EU law.

Nor do any of our savants even begin to realise how pervasive the system has become, and how corrosive its effect. When I first worked for local government, we had a "buy local" policy, on the basis that, if the council was taking tax from local businesses, it should return its money wherever possible to those local businesses. Any such policy would now be totally illegal.

Furthermore, the sheer weight of the bureaucracy is daunting. For some years in my past, I ran a small but successful kitchen cleaning business – professional kitchens that is. I had a good team and we were extremely good at the job, so much so that I had as clients a number of local hospitals, for whom we provided a much appreciated service. But then came the procurement directive, and every contract application was accompanied by reams of paperwork which a small business just could not deal with. The jobs started going to the big contractors – not because they were better than us (they weren't) or cheaper (they were vastly more expensive), but because they had the systems for generating the requisite paperwork.

These same procurement laws, incidentally, govern our trading "partners" in the EU but while you can see the Renault ambulances, the BMW police cars and the Volvo fire engines tearing round British streets, I have yet to see any non-French municipal vehicles anywhere during my extensive travels in France. And, when the European parliament in Strasbourg recently bought a fleet of luxury limousines to ferry MEPs from the parliament to their luxury hotels (while the staff were provided with the crappiest old bus on the inventory), guess what it bought – top of the range Renaults.

As Booker says, "the 'procurement regime' is one of the greatest, if largely unreported, scandals of the EU". If you want to read his full column, click here. There is also further comment on one of his pieces on my other Blog click here.

Political problems abound

Despite warning growls from the European Parliament’s Socialist grouping (PES) José Manuel Durão Barroso, the former Portuguese Prime Minister has “accepted” the job of the President of the European Commission, leaving, as our readers will recall, something of a political mess behind in Lisbon.

The Socialists had intended to capitalize on the government’s unpopularity and their own success in the European election to demand the dissolution of the Social-Democrat government and an early election.

Instead, President Jorge Sampaio, himself a Socialist, has announced that he intends to stay with the government already in power and that he has asked the Social Democrats to serve out their term.

The Social Democrats were expected to name the Lisbon Mayor Pedro Santana Lopes as the head of the coalition. He has already become leader of the party in the days before Barroso’s resignation.

In response, the leader of the Socialists, Eduardo Ferro Rodrigues, has resigned, announcing that the President’s decision, which he, naturally, respected, was a political and personal defeat. So now it is the Socialists who are without a leader in the hour of their seeming triumph.

Meanwhile, members of another coalition, this time in Italy, are fighting like cats and dogs. In the wake of the poor showing of Berlusconi’s party Forza Italia in the regional and European elections, his partners in the government have begun circling round him.

A meeting is due on Sunday, at which the partners are expected to present their demands. Roberto Maroni, a leader of the Northern League which brought down Berlusconi's first government in 1994 when it yanked its support, has said that his party will not be fighting for more cabinet seats (how very odd) but will demand that the government turn its attention to reforms that will give more power to the regions. This is entirely unconnected with the fact that the Northern League is strong in some parts of the country but weak in others to the point of non-existence.

Account of demands to be presented by Marco Follini, leader of the Christian Democrats vary. Some say that he will concentrate on tackling the conflict of interests between Berlusconi’s roles as a media mogul and politician. Other reports say that Follini’s interest is in ensuring that the tax cuts promised by Berlusconi will not jeopardize Italy’s attempts to reduce its budget deficit to below the EU's required 3 per cent.

Then again, he may well demand a partial return to proportional representation, which favoured small parties such as the Christian Democrat is at present and, incidentally, was responsible for much of Italy’s political chaos.

Above all, the coalition partners are likely to demand that Berlusconi find an Economic Minister soon and stop hogging the portfolio. The feeling is that he is hogging it in order to hand it to Mario Monti when the latter stops being Competition Commissioner.

How now, missing cow

According to a report by Reuters, the EU knows the precise number of cows grazing its fields, but not the number of citizens in the 25 member states. That is the claim of its chief statistician, Michel Vanden Abeele, director-general of statistics agency Eurostat.

"Because of the mad cow disease crisis, we know the exact number of cattle in Europe. By contrast, we can't give the precise number of people who live in the European Union," he said.

Er... actually, they don't even know the number of cattle. The same day Abeele was sounding off, Nick Utting, NFU north Cumbria secretary was attacking the UK's cattle tracing system run by the British Cattle Movement Service (BCMS) in Workington, on which the EU relies for its data.

The system costs £30 million a year to run, but the Commons public accounts committee recently found that there were more than one million uncorrected anomalies in the system.

Shadow Agriculture Minister Owen Paterson has claimed that in 2003, the system "lost" 93,000 cattle. However, BCMS director David Evans disagreed with Mr Paterson's figures, saying the "lost" cattle were animals which had moved but had not yet been reported and they would eventually be traced.

He doesn't know the half of it. Virtually every cattle producer keeps a few "ghosts", to make up numbers when cattle die or when - as often happens, the paperwork gets out of kilter. This avoids the laborious process of reporting death or trying to sort out errors with a service which is not exactly known for being "customer friendly".

Multiply the errors in the UK, and this amounts to huge number of unknown cattle. Extend this Europe-wide and the number is probably astronomical. But then, Mr Abeele would doubtless also disagree. After all, he is an EU statistician, so his figures must be right.

Space – the final frontier… of European integration

In a seemingly innocuous piece by the BBC yesterday, the British government is enjoined by the "Save British Science" group to back the European Space Agency's ambitious "Aurora" programme.

This includes a long-term plan for exploration of the Solar System, with ambitions to land a robot rover on the surface of Mars - perhaps as early as 2009 – a sample-return mission to bring Martian rock back to Earth for analysis, and possibly by manned missions.

The special pleading is ostensibly aimed at Gordon Brown and his spending review on Monday, asking for British funds to support the ESA initiatives. The siren call is that "British expertise" – which brought us the failed Beagle 2 Martian probe – will be lost unless we throw our lot in with the Europeans.

Funds required – by space standards – are relatively modest. Committing to Aurora would demand an investment from the UK of a mere £35m per annum for five years, to cover funding for any science instruments built in Britain and a contribution to the ESA's programme.

As always, however, there is more to this than meets the eye. The European space programme is by no means a straightforward exercise in scientific discovery. It has a strong political agenda, confirmed in January 2003 when the European Commission, in its Green Paper on European Space Policy (COM(2003) final) testified to the value of a space programme "in completing the process of European integration".

The programme has two advantages from the European perspective. Firstly, it forces high-technology aerospace companies and academic institutions to work closely together at a "European" level, thus promoting further economic and cultural integration and, secondly, by diverting national funds into high profile European ventures, it serves to reinforce the "European identity".

Rather than saving British science, therefore, this is a device to submerge it in the broader European project – which, presumably, is why the ever-willing BBC was so keen to promote the story.

Tory rebellion on EPP?

According to the Scotsman, six Tory MEPs are threatening to quit the EPP, following the Group's Budapest Declaration last Thursday.

Up to six are believed to be about to jump ship - the Scotsman names four of them: Martin Callanan, Roger Helmer, Daniel Hannan and Theresa Villiers.

Good for the goose?

This one presents real problems for Eurosceptics determined to find only evil in the machinations of the European Commission.

This source of all evil has accused nine French banks of running a "secret agreement" to carve up the market for the issuance of cash cards and drive up charges. It has also accused the Groupement des Cartes Bancaires, which manages the bank card payment system in France, of overseeing the alleged cartel.

The banks named are BNP-Paribas, Caisses d'Epargne, Credit Agricole, Credit Mutuel, CIC, Credit Lyonnais, La Poste, Natexis Banques Populaires and Societe Generale.

The Commission has accused the banks of clubbing together with the GCB to keep out new entrants to the card market, such as the banking arms of large retailers and smaller banks, including foreign ones.

"The objections relate to a secret agreement on bank payment cards," the Commission said, "…the agreement prevents new entrants from offering consumers CB cards at a lower price and restricts technical innovation by limiting the issuance of CB cards with new functions."

It sent a "statement of objections" to the banks and the GCB demanding answers within three months, following raids on their offices that it said yielded secret documents proving the existence of a cartel.

Three points arise from this: first it seems the Frogs, as always, are acting in their usual anti-competitive way, totally disregarding the consumer interest; secondly, the French government, as always, has done nothing about it; and thirdly, the only organisation that has the clout to intervene is the Commission.

Many soft Eurosceptics point to this type of action as justifying the European Union and, in respect of France, they may have a point. However, when push comes to shove, the likelihood of the Commission making any fines stick – if it gets that far – are remote.

But, as far as any such anti-consumer behaviour in the UK goes, it is pretty certain that the government – if not the media – would pick it up, and some action would be taken. We, in the UK, therefore, do not need the EU's Commission to sort out our own affairs.

And that is the point for the brighter Eurosceptics among us. By all means, if the continentals have such dire governments that they need the actions of outside agencies to make them – and their commerce and institutions - behave properly, then by all means they should join together and create an organisation like the EU.

But that is no justification for the British – who do tend to have a better record for equitable governance - joining in. In this case, what is good for the goose is not necessarily good for the gander.

Barber in a muddle

Despite their opposition to the EU constitution, TUC general secretary Brendan Barber is telling British unions not to reject it out of hand. Workers, he says, "should judge the document by what it says, rather than what the government's negotiating position was".

"There are certainly some good things in the final document," he has told the Tribune newspaper, on which basis he is urging the traditionally pro-European union movement not to deliver an outright "no".

The poor little darling thus seems a tad confused. Currently – as far as we know – any referendum will offer a choice of a "yes" or "no" vote. We are not aware of any plans to make provision for a "maybe" answer, just to suit the Barber of Muswell Hill.

But it seems he is really angling for a split in the block vote, so that he can claim that the unions "on balance" support the constitution. The fraternal "we" will then "reserve our right to put a distinctive trade union argument".

Pressaging more than a few upsets amongst the brave band of brothers suppporting the constitution, however, he adds: "If that makes us awkward allies for a "yes" campaign, then so be it".

Given that the union were on the "no" side in the last referendum, this news looks encouraging. "On balance", it might be better having the brethren messing up the "yes" campaign rather than dragging the "no" side down, as they did in 1975.

As we see them

The Friends of Europe – a supposedly independent EU think-tank - has been concerned about the “communications gap” between the EU institutions and the “EU citizens”.

In an attempt to deal with the problem, earlier this year it commissioned Gallup Europe to undertake a detailed survey of the opinions of nearly 2000 "decision-makers" in EU member states. Amazingly, I was asked to take part in the survey.

The draft findings are now available and they cast the EU in an "unflattering light". In its executive summary, Gallup Europe reports that:

The European Commission is perceived as an unfriendly, bureaucratic body, distant from ordinary people, driven by complicated and unclear, sometimes even unreasonable procedures. The language of Brussels' elites is too complex, maybe mysterious, as it is seen to serve themselves rather than citizens. The bureaucratic short-hand expressions that speed up communication of complex issues and processes within and between EU institutions and organizations act as a barrier of communication when reaching a wider constituency.

Crucially, this was not an ordinary opinion poll. Over 90 percent of the respondents were people with direct experience of working on EU-related issues – within EU institutions, as officials in member states, in private sector business and in the media.

This rather knocks on the head the theory that the more people know about the institutions, they more likely they are to be in favour of them. This survey suggests exactly the opposite.

If you wish to read the full survey, it can be accessed though this link.

Radio Netherlands

The transcript of my interview with Radio Netherlands on the military applications of the EU's Galileo satellite positioning system, together with a link to the recording of the interview, is now up on the RN website: click here.

Interestingly, the Dutch EU presidency had no comment to make about the military applications of the system – which the EU has consistently denied. Therefore, the interviewer, Hans de Vreij, RN Security and Defence editor, is going to do a follow-up next week, with a Dutch MEP and maybe a military expert.

How about opening a book on the BBC doing anything?

Demanding with rod, obedience in all things…

Lord Howe, the attacks from whom were famously described by Labour Chancellor Denis Healey as "like being savaged by a dead sheep", is on the attack again – this time over Britain's sloth in embracing the metric system.

Fronting a report from the Metric Association, he paints a picture of woe about how the use of the "old" imperial units is "damaging to British companies' competitiveness and is confusing consumers".

But, despite the fact that metrication has been imposed on us by successive EU Directives, namely 80/181/EEC and 89/617/EEC, Howe and his sheepish cronies are, according to today's Times, anxious to "sever the link between metrication and the European Union" – on the basis that "a Commons committee unanimously recommended the adoption of the metric system as early as 1862.

Be that as it may, the EU's enthusiasm for the Metric system and, more importantly, a uniform measurement system throughout the EU, is no accident. Howe could do no better that read the definitive history of the Metric system by Ken Adler (The Measure of All Things, London, Little Brown), where he happily acknowledges that the system was used as "a tool of political unification".

One also has to enjoy Napoleon's description of the inventors of the system, after his exile to St Helena:

The savants had wanted to overturn every custom, rewrite every rule, remake every French citizen into an image of themselves, and all for the sake of a miserable abstraction. They had behaved like foreign conquerors, demanding with rod, obedience in all things, without regard to the interests of the vanquished.

Good man that Napoleon. He could well be describing the contemporary European Union, in all its glory.

Scientists are no more consistent than the rest of us

The British Medical Journal has published a call from a number of international scientists, led by Jeff Collin of the London School of Hygiene and Tropical Medicine, to ban tobacco sponsorship by Formula One racing.

They point out that the implementation of the World Health Organisation's Framework Convention on Tobacco Control has resulted in the banning of direct advertising of tobacco products in the UK but the Formula One sponsorship is still in place and is still, supposedly, doing damage to people’s health.

Without getting into the whys and wherefores of the tobacco advertising debate, we cannot help wondering why it is that these scientists never call for the end of EU subsidies to tobacco producers in several southern member states? Despite endless CAP reforms directed at the tobacco subsidy, it is very much in place, costs anything between £750,000 to £1 million a year, encourages fraud, protects inefficient productivity, and results in tobacco of such low grade that it cannot be sold in the EU but has to be dumped on Third World and Balkan countries.

Surely the EU can also be described as being “free to peddle the tobacco pandemic”. Why do we not hear any calls? Could it have something to do with the large sums the self-same EU dispenses to various academic scientific institutions? Surely not.

More on the Tillack case

Our readers have, no doubt, followed the saga of the German journalist Hans-Martin Tillack, who has been subjected to quite an astonishing amount of persecution by the Belgian police because he has had the temerity to write stories about OLAF, the Commission’s anti-fraud organization.

Tillack’s stories have shown conclusively that the organization is, at best, inefficient, at worst itself corrupt. It has not changed at all from the old UCLAF, which was famously blasted out of the water by an independent enquiry.

All this has been confirmed recently by Raymond Kendall, the head of the OLAF supervisory body, who has told a House of Lords Committee that there is no control over OLAF. This, too, is something we have reported in the past and shall, no doubt, be returning in the future.

Now the Daily Telegraph has overtaken the blog. They have managed to get hold of some papers that show quite clearly that Tillack’s persecution was initiated and and orchestrated by OLAF itself. This is not, in itself, a surprise but nice to have it in writing.

What is a little more worrying as the article reminds us, is that

The EU continues to acquire a plethora of judicial, prosecution and intelligence bodies. It is creating a justice department - Eurojust - and a counter-intelligence "tsar Brussels" on top of the Europol agency that handles cross-border crime.

And the record up till now does not exactly inspire one with confidence.

To read article in full click here

The Budapest Declaration

Yesterday, delegates of the EPP-ED European Parliamentary Group – to which the Conservative MEPs are affiliated, by order of Michael Howard, met in Budapest.

Speaking to a press conference afterwards, Hans-Gert Poettering, Chairman of the Group, outlined a declaration adopted by the Group, which they are calling "The Budapest Declaration".

This is reproduced in full below and it is relevant to note that the Conservative MEPs do not seem to have issued a statement distancing themselves from the statement.

I will leave the readers to judge whether this declaration is entirely in accord with Conservative values and policy.

The Declaration

On 13 June 2004 Europeans took a decisive step towards the realisation of the grand design of the founding fathers of the European Union: after 50 years of oppression and communist dictatorship, people in eight Central and Eastern European countries got the right for the first time to join other, more fortunate citizens of Europe and decide as to who should represent them in the only directly elected institution of the European Union, the European Parliament. By this act Europe of the 25 has acquired full legitimacy.

The European People's Party and European Democrats received the most votes cast in the June 2004 EP elections and has thereby become the largest political group of the European Parliament. The party and its representatives in the EP have always been convinced that the enlargement of the Union constituted a historic milestone on the road to an ever closer union between the peoples of Europe and that it is a unique opportunity to guarantee peace, stability and prosperity in our area.

For the EPP-ED Group enlargement has also been a moral, historical and political obligation. By this, with the collapse of the Berlin Wall, the EPP began to embrace the Christian-Democratic, Conservative and Centrist parties of the young democracies in order to reunite the European family.

It has thus a symbolic meaning and it is clear evidence of this strong relationship and co-operation that the new EPP-ED Group has chosen to hold its constituent session in Budapest, the symbol of the fight against totalitarian communism, on the invitation of Fidesz-Hungarian Civic Union, which received the highest percentage of the votes cast for a centre-right party in EP elections.

This constituent session is the most numerous meeting of the EPP-ED Group ever, and the Group is the only political formation of the European Parliament in which all the 25 Member States are represented.

After this grand reconfiguration of the EU, in which and after having its new Parliament elected, the European Union must look forward. The reinforced EPP-ED Group wishes to get down to business and start working immediately in order to complete the heavy agenda facing Europe.

The new Constitution, which was approved after so many difficulties and such an intensive work by both the Convention and the Intergovernmental Conference, must first be ratified and then implemented. Another urgent task is to agree on the financial perspectives of the Union for the period 2007-2013.

The low turnout at the last elections signifies a further responsibility to convince voters that Europe is a condition of prosperity and the people's opinion does count, hence they should participate in and express an opinion on the development of the EU.

The EPP-ED Group attaches great importance to maintaining the spiritual and cultural identity of Europe in a globalised world, and at the same time accepting the cultural diversity of its peoples. We need reforms to develop and to ensure the framework conditions of the European model in order to increase the welfare of our peoples.

Our Group reaffirms its commitment to the European model of social market economy, through generating higher economic growth and creating jobs. The European Union should not deviate from its basic principles and objectives, and it should never be forgotten that the Union's identity is deeply rooted in the Christian tradition and in the common religious heritage of our continent.

In parallel, the EU should become an ever more coherent, united entity and should not permit a two-speed Europe. The equality of its Member States, a fair balance between the interests of larger and smaller states, solidarity and efficacy of Union policies should go hand in hand. Therefore Europe needs fresh efforts, which are necessary for the policies we want to develop.

Analysis

This evening on BBC Radio 4 "Analysis", the programme, headed "Making our minds up", dealt with the issue of leaving the European Union, an issue previously – according to Dr Alan Sked – you could not bring up in polite conversation.

Simon Buckby, formerly of Britain in Europe, argued that this was the most important issue to confront not only British but continental politicians. But it was an issue that most politicians seemed keen to avoid.

Sked believes that people in the UK have already made up their minds and that anti-EU sentiment will solidify. He adds, "If the elite are stupid enough to ignore the wishes of the majority, the majority will get rid of the elite". To ignore the wishes of the majority, he says, would be "suicidal" for any leader.

As to making the case for Europe, Alison Parks of the Social Attitudes Survey says that of all the groups, Eurosceptics are the least trusting of politicians. They simply do not believe what the politicians tell them. I wonder why that is.

Anyhow, if your computer is suitably equipped, you can listen to this programme on line. To get to the programme index, click here. It is worth a listen.

If you prefer, you can read the transcript. Click here for the link.