Archive for June, 2010

EU leaders are desperate to have a quiet, even dull, get-together in Brussels on Thursday.

Officials from various member states have been at pains to stress that this is the first meeting in quite some time “not taking place in an atmosphere of immediate crisis.” This should be quite a “normal” summit, said another diplomat, adding: “No need for the press to get excited.”

Of course, the press has been getting quite excited. First there were reports in Germany’s press and then the Spanish press that Madrid is looking to draw on the  recently-agreed 750 billion EU/IMF  euro rescue package.

The Spanish problem is the elephant in Brussels’ living room. Uninvited and talked about in whispers (but oddly without much urgency and almost a sense of complacency), it is safe to say that many are hoping it will quietly leave by the same door it sidled in.

So Spain and its massive bank debt problem is not officially on Thursday’s agenda. But may come up on the ‘sidelines’, as they say. The eurozone rescue mechanism itself may also come up, thanks to Slovakia which, at home at least, is playing hardball and saying it will not sign up to it. Nor, say voices in Bratislava, will the country pay its share of the €110bn rescue package for Greece.

This raises the more general question of what happens if more countries, such as Spain, call for financial help? How will the Germans – already angry about helping Greece – and the Slovaks (and perhaps others) react then?

On a slightly clearer note, part of the economic governance question appears to have been settled – to German Chancellor Angela Merkel’s liking.

Following their we’re-still-on-speaking-terms-meeting in Berlin on Monday, French president Nicolas Sarkozy seems to have backed down on demands to create some sort of permanent structure for the eurozone. Instead, the 16 euro leaders will meet informally every now and then.

Merkel won another concession, too. Berlin and Paris now seem to agree that voting rights should be removed from regular euro-rule breakers.

German officials believe that the threat of not having a vote gives a strong political incentive to behave. An EU leader going home and having to say they are no longer allowed to vote on issues would be too humiliating to contemplate, they argue.

But others look at the suggestion with a degree of scepticism. “I cannot see how you can do that without treaty change,” one EU diplomat remarked. This, needless to say, would not be welcome in Ireland or its larger island neighbour. On a purely practical level, it is also unclear what voting rights should be suspended and for how long.

The same diplomat concluded that although agreeing to impose financial sanctions for serial pact offenders would be “fraught with difficulty … some form of financial penalty is more likely” than the voting suspension option.

It is interesting to hear how Germans put across their plans for possibly amending the treaty. They say they are not pushing for it but merely want others to keep an open mind.

In any case, should it come to that weary point once more, it is just a question of selling the idea properly. Says one official:

“If we want to survive, we have to take this or that measure. Discipline governments. I think if you tell people ‘this is made to ensure your economic and social future; this is made to keep your own governments under control when it comes to spending,’ I think the majority of the population will say: ‘fine if we get what we need.’

“It’s a question of how you explain it. We should not just say, well, because we had the problem of the Netherlands, France, Ireland with the referenda, we don’t want to amend the treaty. We are talking about ways to stabillise our economic and financial position and I think all politicians should be able to explain to their people that it’s necessary.”

Alas theory and practice tend to be worlds apart.

Some fighting talk by European Commission President Jose Manuel Barroso in Strasbourg on Tuesday.

“The commission is the economic government of Europe,” he proclaimed. And quickly, as if worried that someone may contradict him, he added: “That is something that some of our governments need to be reminded of from time to time.” But he was among friends here, at least on this topic. The Germans, Manfred Weber (EPP) and Martin Schulz (S&D), banged the table in solemn agreement.

Warming to the theme, Barroso said member states don’t seem to know what is in the treaty – a document that increasingly appears to say all things to all (wo)men.

Belgian Guy Verhofstadt (ALDE), who spends most of the time outside Question Hour indicating to anyone who’ll listen that the commission, and by face-contorting but i-won’t-quite-say-it implication Barroso,  is bringing Europe to its knees through sheer inaction contented himself with saying that the EU leaders meeting on Thursday will be the first test of the president’s new-found resolve.

“I hope it will not be the council doing the monitoring of Europe 2020 (the EU’s new but not improved economic strategy),” said Verhofstadt.

I can ensure you, replied Barroso, that the commission is determined to play its full role when monitoring the 2020 strategy.

Yes, there is a certain pleasing choreography to this monthly exercise.  Amateur football in poor weather.

British Tory Timothy Kirkhope informed the chamber that he was “very pleased” to hear about the agreement between the EU and US on access to European citizens’ bank data. Barroso grasped gratefully at this straw.

Their happiness was not shared. Schulz  said that the parliament had “very serious misgivings” about the agreement. It is “most certainly not what parliament constitutes as progress.”

This led Barroso to the wise conclusion that it was “probably too soon to draw lessons” from the saga as the “process” still has to be finalised. Parliament still has to vote on it, in other words. He tittered ingratiatingly while pointing this out. Schulz harrumphed in the background, shouting off mic. It is an art the socialist leader is perfecting.

Barroso did, however, feel moved to suggest that it is time for parliament to send a “signal” to the US on the issue, as Washington is a very important partner. Sadly for the commission president, data privacy concerns appear to weigh more heavily than the geo-political strategising in the self-consciously powerful EU assembly.

Later an MEP suggested eurobonds be issued to promote development goals, investment in climate change and energy. Barroso said he did not believe there is “openness” in our member states to adopt eurobonds for this kind of measure. Quite.

And then it was back to the EU2020. Which is all about “growth, growth, growth.” And not just any growth but “intelligent growth, sustained growth and inclusive growth.”

All the right buttons pushed. It seemed to do the trick. Nobody could think of anything else to say.

And just when listeners might have been worried that the discussion would simply peter out into less even than before. Barroso pulled the most marvellous euphemism out of his hat. Reinforcing the Stability and Growth Pact – it’s not about sanctions. It’s all about “incentives for compliance.” Inspired.

There is a certain lack of clarity at the moment about what is meant by EU economic governance.

Or to be more precise, everyone seems to know what France’s Nicolas Sarkozy would like. And it is relatively clear what Germany does not want. Beyond that, the lines remain unclear even though the phrase is bandied about freely.

In brief, Paris has indicated it would like regular summits of eurozone countries, plus some permanent structures including a secretariat. A more politicised running of the 16 countries with the single currency.

Berlin, mindful of the ECB’s independence, would rather keep all 27 member states involved. But an equally pressing concern is to ensure that the Greek situation is never allowed to happen again.This entails revising the euro rules to include greater prevention measures, surveillance and sanctions.

So is this the basis of a forthcoming Franco-German compromise? The one in return for the other. Some seem to think so.

Casting a somewhat jaded eye over the putative economic governance landscape, one veteran EU diplomat noted:

“My prediction would be that somewhere down the line, there is going to be one of these grand Franco-German compromises, in which you probably get agreement on tougher sanctions and agreement on new permanent structures and a declaration that France and Germany together have saved Europe.”

Whatever about exactly what Chancellor Angela Merkel wants, practicalities may play into Sarkozy’s hand.

The last eurozone summit, on Friday 7 May, was by all accounts a rather chaotic affair. The leaders were unprepared and met late into the night. Policy and decisions – including to tell finance ministers to sign off what by Sunday had become the massive 750 billion euro EU-IMF aid mechanism – were made on an ad hoc basis.

After the meeting there was much muttering about how it was not the right way to be dealing with affairs of this scale. And making the relatively safe assumption the need for eurozone leader meetings will continue, a solution a la sarkozy could see a secretariat that would prepare policy papers and forecasts for such gatherings. This, presumably, would lend a more informed and less panicked atmosphere to the talks.

But if such a Franco-German plan is in the offing – and both sides are keen to their economic governance view prevail – they will have to work a little on their PR.

While some outside the single currency are worried about an economic governance elite (or eurozone council as Sarkozy is wont to have it) several eurozone member states are also reportedly getting irritated by eurozone policy being thrashed out by Paris and Berlin.

Although to be fair, I am not sure where we would be if France and Germany were not taking some sort of initiative, even if late, reactive and quarreled over.

Belgian politics. A topic to be approached with some trepidation. And with the proviso that if you think you have grasped it, then you most likely have not. But still the country’s goings-on are rich in juicy pickings.

Since 2007, the last round of elections, the government is either about to fall or the country is in care-taker status. The King’s sole job, it appears, is to hear prime ministerial resignations (Yves Leterme has thrown in the towel three times since taking up power in early 2008)  and plead with various people to start talks about  reform.

Politicians exchange insults across a linguistic divide. Stereotyping thrives. Poorer French-speaking Walloons are all addicted to state help; Richer Dutch-speaking Flemings are high-handed and intent on breaking up the state.  There are three regions. There are also three language communities. And minefields of local governments and parliaments. There have been five state reforms since 1970.

And then there is the fact that political parties only stand for election on one side of the border. This tends to make them concentrate on local issues and make wild electoral promises. Not helpful when it comes to forming a coalition government with similarly locally-bound parties from the other side .

Lastly there is Brussels-Halle-Vilvoorde – the messy heart of  it all. (BHV – the acronym alone instills a small horror in foreign journalists – and I am only dipping my toe in the murky waters here).

Brussels and the Flemish towns of Halle and Vilvoorde  are one voting constituency that extends over both Dutch-speaking Flanders and the bi-lingual capital. This means that francophone residents in Halle and Vilvoorde may choose between voting for Dutch-speaking or French-speaking parties. The court in 2003 said the BHV set-up breaches the constitution.

The issue, for long a political hot potato has been become an increasing source of bitterness as more Francophones settle in the area. (From my outsider’s point of view, it seems French speakers should make an effort to learn the language when moving to Dutch-speaking areas. However, Flemish politicians are equally abrasive in the way they go about ensuring the primacy of their language.)

The discussion on finding a solution is shrill on both sides. But is compounded by the French-speaking politicians’ belief that further state reform, dealing with BVH,  is also a way for Flemish parties to cede more federal rights to the regional level, hastening the demise of the Belgian state.

All this is accompanied by some febrile reporting on the part of the domestic media. I am thinking particularly about Le Soir here (I don’t speak Dutch unfortunately so I can’t judge how the ‘other side’ reports).

With Belgian elections upon us again – on Sunday 13 June. It is this constitutional debate that is dominating once more. And not, it might be noted, important issues such as the country’s soaring debt.

The BVH stand-off, which led to the collapse of the government in April and this early election, has left some wondering whether the Belgian state will even exist when the country takes over the EU presidency on 1 July.

But fears that the country will break up into two separate regions are greatly exaggerated, according to Philippe Van Parijs, an academic and part of the Pavia Group of academics proposing electoral reform for Belgium.

Kindly agreeing to have an ‘explain-Belgium’ lunch (it was lengthy) with myself and other potentially confused journos the other day,  he noted that tensions between the two sides today are relatively mild when put in an historical context. In the 1960s, there were riots over the language issue.

The jewel in the battered crown

And on a more prosaic note still, Van Parijs says the country will not split because of Brussels. Everyone wants the EU capital. Neither side will give it up. “So we are stuck together.” An inglorious stalemate.

Van Parijs believes the country will eventually end up as a federation, largely due to the language situation compounding the separateness of the communities.  The country was formally separated into Dutch and French speaking areas in 1963.  The two sides are not divided by religious or cultural differences, he says.

Outsiders always puzzle over the language situation. Why aren’t all Belgians fluent in both French and Dutch? Why isn’t education bilingual from  day one? According to Van Parijs, it is not a myth that the Flemish generally speak French better than Walloons speaks Dutch. He says that it is because the “infrastructure” for speaking French is there in Flanders due to the French language’s dominance for so long. The same is not true of Wallonia.

In addition, there are practical problems. To learn and maintain a language you need to speak it and be motivated to speak it. Difficult when you are not surrounded by it.

And what about this weekend? Polls indicate that the Flemish separatist party N-VA is set to do well. Coalition talks are therefore likely to be difficult and lengthy once more. After the 2007 elections, almost 300 days passed before a government saw the light of day.

The Pavia group, for its part, recommends creating a national constituency. One tenth of the 150 seats in the lower chamber of the national parliament would be elected on a nationwide basis. This, the group argues, would force parties to curb their tendencies for wilder election promises and behave more constructively.

Given that it is election time, the group’s ideas are once more in the air. Lengthy coalition talks may see them seriously considered.