European Foundation Intelligence Digest, 18th

Does Eurostat have its hands in the till?

As the hoo-hah about the new Constitution rages, Europe continues in its usual, corrupt ways. The latest development is that Eurostat, the EU body which produces official statistics to order for the European Commission, is embroiled in a corruption scandal. It is alleged that the body kept secret bank accounts, in which so far up to € 1 million has been found. It is now believed that up to € 8 million may have been salted away. Such accounts have been discovered in Luxembourg, Brussels and Madrid. The EU’s own anti-corruption unit, OLAF, is investigating the matter: the charge is fraud and criminal conspiracy. The former head of Eurostat Yves Franchet and his information director Daniel Byl are suspects. At the centre of the scandal is the company Planistat. It is a contractor for Eurostat and sells Eurostat information to companies and other private buyers. It now transpires that only 40% of the revenue went to the EU budget, and 10% to Planistat for its own administrative costs: the remaining 50% was put into these apparently secret bank accounts. This money was then used to pay bribes to companies to encourage them to sign contracts with Planistat. According to other allegations, wives and partners of Eurostat officials are believed to have appeared on Planistat’s list of employees, arousing the suspicion that Planistat was simply being used to milk the EU budget. The supplying company, Eurocost, whose president is Yves Franchet, is also under suspicion. It is alleged to have cooked its books, booked projects twice, stolen computers and office furniture. Yet another company, CESD, which trains statisticians in developing countries, is also suspected of having irregular accounts. EU officials are said to have used CESD for their private business activities. Some € 5 million of EU money flowed this way into Eurostat’s coffers: it is doubtful whether this money will ever be retrieved.

The EU budget commissar, the German Green Michaele Schreyer, has been asked about this repeatedly in the European Parliament. But she has been very evasive in her answers, even though her responsibilities cover the fight against corruption and the budget. Some parliamentarians are now saying that the EU budget itself is riddled with false information. The German CSU MEP, Gabriele Stauner, has called for Schreyer to resign. “Heads must roll,” was also the conclusion of the rapporteur for the fight against corruption, the Austrian Socialist, Herbert Bösch. Bösch even says he feels a sense of déjà –vu: the last Commission also collapsed because of corruption allegations. The Prodi Commission was supposed to have a policy of zero tolerance for corruption. Schreyer says that she did not have the information she now has when she originally gave answers to the European Parliament on the matter; Franchet disputes this and says that she knew full well about the issue. Although Schreyer would normally be expected to serve as a commissar until the end of 2004, the Federal Chancellery has let it be known that her mandate will not be renewed. [Sylvia Schreiber, Der Spiegel, 25^th May 2003]

Polish anti-EU campaigners say media biased…

EU enlargement, as we know, is intended to spread and consolidate democracy in the East of Europe. But is it having the opposite effect? The Adam Smith Centre in Warsaw has issued a long report about the way in which the debate is being conducted in Poland in the run-up to the EU referendum on 8^th June. According to the study, the majority of media outlets in Poland are controlled either by the Communist government or by German companies. Alleging that, “The Germans want to rebuild their empire in Central Europe,” the institute says that the Germans place a high value on their ability to influence public opinion in Poland through ownership of the media. Although the German government no longer has any irredentist claims on Polish territory, it does support the property restitution claims of German citizens expelled from Western Poland after 1945. If Poland belonged to the EU, then those claims would be justiciable by the European Court of Justice. The Germans, through their control of much of the national and local press, seek therefore to influence Polish opinion in a pro-EU direction. There is no equal access to the state media for opponents of EU membership. Indeed, the prime minister of Poland, Leszek Miller, has said that “assuring equal conditions for advocates and opponents of EU integration would be a misunderstanding”. The Polish government has itself set aside $3.5 million for pro-EU “information”. According to a study conducted by the anti-EU League of Polish Families, the three main news programmes devoted 98% of their time to euro-enthusiasts, with only 2% of airtime given to opponents. The private media are not much different. Although they are critical of the government, they are uncritical of EU membership. The private media are in any case subject to corrupt public influence, as the long-running corruption scandal involving Lew Rywin and Adam Michnik suggests. Large public meetings and press conferences organised by Eurosceptics have been ignored in the main media; by contrast, tiny meetings of artificially created parties, like the so-called “Union of Liberty”, receive wide coverage. Commercial broadcasts by pro-EU groups are allowed, but not ones opposed to membership. The only real outlet for anti-EU sentiment is the Internet, and it appears that even these discussion groups are censored when controversial anti-accession ideas are expressed. The Dean cancelled a students’ debate in the University of Torun at the last minute, on the grounds that the students ought to be campaigning for a Yes, rather than discussing the issues. The leader of one of the three parties campaigning against EU membership has said that the gross imbalance threatens freedom of speech and democracy in Poland. [Dr. Marcin Masny, Adam Smith Centre, ul. Bednarska 16, 00-321 Warsaw, tel, + 48 22 828 4707; fax + 44 22 828 06 14, mobile + 48 608 572 440, e-mail marcin.masny@ieg.pl and adam.smith@adam-smith.pl]

... while court says it doesn’t matter who votes

A severe blow has been dealt to the anti-EU forces in Poland, who have been relying on a low turnout to invalidate the vote. Polish law, like that in many former Communist countries, requires a 50% turnout for the result of an election or referendum to be valid. Anti-EU parties had been hoping that voter apathy and opposition to the EU would combine to produce an invalid vote. Now, the country’s Constitutional Tribunal has ruled that the Polish parliament can ratify the accession treaty even if the turnout if below the required minimum. The law passed for the EU referendum includes a provision that the parliament can override the result of the vote if it votes by two-thirds to join the EU, and the Tribunal has now upheld this part of the law. So whatever Poles do on 7th – 8th June, the answer will be Yes. [Radio Free Europe Newsline, 28th May 2003]

Ireland to become most expensive country in EU

The introduction of the euro was supposed to ensure price stability as the primary monetary policy goal. In Ireland, however, it has failed to dampen that country’s rampant inflation. Now Ireland is about to become the most expensive country in the EU: many East European countries who look to the apparent success of Ireland when they say they are in favour of EU entry, and who say that the “Celtic Tiger” shows how a small country can be boosted with EU membership and subsidies, do not usually realise how expensive life is there. According to a recent study by the Irish government, the Forfas Consumer Pricing Report, Ireland is expected to overtake Finland this year as the most expensive EU state. Irish consumer prices are already 12% higher than the European average, while Ireland is the most expensive EU state for pub prices, restaurants, tobacco, rents and food. The same basket of goods which costs € 100 in Ireland would cost € 85 in France, €72 in Spain and €65 in Portugal. A trip to the off-licence is 60% cheaper in Spain than in Ireland, while rents in Portugal are one fifth of what they are in Eire. Inflation in Ireland was around 5% last year. Membership of the euro has obviously made things worse, as it has in all euro states. [Various reports, with thanks to Anthony Coughlan of Trinity College, Dublin]

French farmers demonstrate against CAP reform

Several thousand farmers protested in France against the proposed reform of the CAP. For the first time, the French minister for agriculture, Hervé Gaymard, has said that France might accept the uncoupling of subsidy from production volume, in some sectors. On the other hand, Mr. Gaymard has insisted that France will not be forced to conclude negotiations before any particular deadline. He also rejected the anti-CAP rhetoric which emanates from the USA: “We reformed the CAP three years ago,” he said, “while the Americans, with their Farm Bill, are going to give $75 billion to their farmers. Europe does not have to pull down its walls, Europe has nothing to be ashamed of.” Mr. Gaymard said that the internal support given to agriculture in the EU is proportionally one third of that in the USA. Mr. Gaymard also insisted that the president of the World Trade Organisation’s working group on agriculture has never proposed a complete decoupling of subsidy from production as necessary to satisfy the agreement reached on agriculture at Doha in 2001. Some 20,000 farmers protested, saying they were opposed to driving food prices ever further downwards. They reproach the European Commission for proposing “ultra-liberalism”, saying that the cheapest price does not allow for quality products to be sold. Franz Fischler, the commissar for agriculture, wants a new formula to be adopted on 11^th and 12^th June in Luxembourg, but Hervé Gaymard says, “The right date will be the date which is right for French farmers.” [Laurent Zecchini, Le Monde, 28^th May 2003]

No one likes the constitution

The publication of the first draft of the European constitution has met with opposition, not just in the United Kingdom but throughout the EU. Several countries are opposed to the reduction in the numbers of Commissars, proposed by the draft. The draft constitution upsets the institutional equilibrium which was achieved, after bitter negotiation, in the Nice treaty. That treaty fixed the numbers of members of the Council of Ministers, European Parliament and Commission. The draft constitution seems to reinforce the power of the larger states by dividing the number of Commissars in two, and by giving added weight to population in the distribution of seats in the European Parliament. The Spanish representative in the presidium, Alfonso Dastis, who said that he would oppose anything which jeopardised Spain’s “weight” in Europe, therefore rejected it. Irish and Danish representatives similarly tried to block anything which would remove “their” commissars. The two commissars who are on the Convention opposed the suggestion that a president of the Council be elected for 2 ½ years, fearing that this would reduce the power of the Commission.

Because everyone has reacted by trying to defend their patch, one Spanish MEP has said, “Everything is blocked. We will have to reflect and start again.” Inigo Mendes de Vigo added, “Our mandate is not to revisit the Treaty of Nice. It is not the position of Spain to do this. 19 governments out of 28 are against it.” But, as Commissar Michel Barnier put it, “If we don’t change anything in the Nice treaty, what was the point of having the Convention in the first place?” Others point out that the Convention is secondary to the real political bargaining which will occur once the budget is hammered out for 2007-2013. This will not happen until 2006, and it is only then that EU states will really decide what policies they want to pursue in common. [Arnaud Leparmentier, Le Monde, 27^th May 2003]

It is not just representatives of national governments who are disappointed with the draft constitution. Veteran federalists are unhappy too. Elmar Brok, the CDU MEP who is a member of the Convention and foreign policy spokesman for the CDU in the European parliament, said the draft was “catastrophic”. Brok accused the presidium of acting as agent for the national governments, and he attributed to this the fact that so many ambitious proposals had been deleted from the draft. He said that the retention of the national veto on tax and in foreign policy was particularly regrettable. The Convention had initially planned to make both of these subject to majority vote, but such ideas are completely absent from the draft. Brok accused Giscard of serving only “the interests of the big states in the EU”. He said that the work of the presidium was therefore like an anticipated version of the inter-governmental conference. Brok said he thought that the majority of the Convention was opposed to retention of the national veto in these areas. Brok also criticised the provisions for “enhanced cooperation”, saying that it would only encourage states to act outside the EU treaties. Brok is therefore threatening to campaign for the Convention to reject the draft constitution submitted by the presidium. The Convention has until 20^th June to agree a text. Other commentators in Brussels say that, “The Eurosceptics have made good progress.” The presidium, for its part, has said that the draft is only a draft, and that there is still plenty of room for negotiation. 16 smaller countries, for instance, have said they are opposed to the idea of having a president of the Council elected for 2 ½ years. The draft does propose majority voting in Justice & Home affairs, and the preamble remains to be drawn up. [Andreas Middel, Die Welt, 27^th May 2003]

Finally, Christians will be disappointed by this Constitution since, despite intense lobbying by the Vatican and some pressure from the Italian and other governments, all reference to the religion which has defined the near-totality of European history for the past 2,000 years has been carefully avoided. The first words of the preamble of the Constitution are a quotation from Pericles’ famous funeral oration about power coming from “the whole people” – a statement which was as untrue of ancient Athens as it is of the modern EU, and which is any case turned out to be the prelude to the defeat of Athens at the hands of Sparta. The preamble then goes on: “Drawing inspiration from the cultural, religious and humanist inheritance of Europe, which, nourished first by the civilisations of Greece and Rome, characterised by spiritual impulse always present in its heritage and later by the philosophical currents of the Enlightenment, has embedded within the life of society its perception of the central role of the human person and his inviolable and inalienable rights, and of respect for law…” Ouf! Thank God they didn’t mention Christ. The preamble does, however, modestly embody in EU constitutional law the “gratitude” of the peoples of Europe for the hard work of the members of the Convention.

In the eye of the beholder

While British government ministers and other pro-Europeans were trying to play down the extent to which the Constitution changes, the spokesman for the presidium, which presented the draft, was playing up the extent to which it centralises power. For the real federalists, indeed, the constitution is disappointing because it does not go far enough, and they mutter darkly that things cannot be good if the British government supports the constitution. Therefore Nicolas Meyer-Landrut, the spokesman for the presidium, boasted on Tuesday that co-decision, the legislative procedure which gives the European Parliament a veto on new EU laws, is now the norm in the EU’s lawmaking process. From 34 policy areas today, extended to 40 by the Treaty of Nice, he said that co-decision would henceforth apply to 70 policy areas. By the same token, the number of policy areas decided by majority voting in the Council of Ministers would, he said, rise by twenty. Moreover, the new voting rules in the Council represented “an important extension of the communautaire (i.e. federalist) method” because they reflected population weighting more faithfully than before. He said this because the presidium is often accused (see above) of favouring an inter-governmental approach instead.

New domains to which majority voting and co-decision apply include the attribution of structural funds, the common agricultural policy, border controls, police cooperation and immigration & asylum policy. Tax policy is exempt from this rule (except for the fight against financial fraud) as are family policy and foreign policy (except for executive decisions). Finally, it is worth noting that the Constitution does essentially nothing to simplify the arcane procedures of the EU: the arguments are all essentially of the same type as we have had for more than ten years. They concern which policy areas should be transferred to Brussels and which not; but there has been no radical overhaul of the EU’s mechanisms. For this reason alone, one of the principal goals of the constitution has not even been addressed. [Philippe Gélie, Le Figaro, 28^th may 2003]

Mr. Hu knocks at Russia’s door

The first state visit abroad of the new Chinese president, Hu Jintao, has been made to Russia. The Chinese president said that this choice reflected China’s new foreign policy priorities. The two superpowers reaffirmed their attachment to the principle of a multipolar world, something Tony Blair has said he vigorously opposes. They said that any use of force to solve the question of North Korea’s nuclear programme was “unacceptable”. Mr. Putin said, “The new world order … must take into account the interests of all and must be based on comprehensible and clear norms of international law.” These words figure on the joint Russian-Chinese declaration. Mr. Putin added, “Our peoples are united by bonds of friendship, and by business partnership in the military-technical sector.” The Chinese president goes from Moscow to the St. Petersburg summit and thence to Evian for the G8 meeting at the beginning of June. [Le Monde, Agence France Presse, 27^th may 2003]

Brussels takes over the Congo again

The European Union is preparing its second military undertaking, this time in the former Belgian colony of Congo. The deployment could occur more quickly than was at first thought. Representatives of the 15 EU states mandated the EU’s military committee to produce an analysis of the intervention by next week. The plan is to send a “Stabilisation Force” to Northern Congo. EU diplomats in Brussels say that the probability of the operation being managed by the EU has risen. Some countries, especially Germany, had initially argued for the intervention to be based on “a coalition of the willing” but the United Nations then specifically asked the European Union to support the UN mission in Congo. 4,300 blue helmets have been in the country since 1999. Javier Solana said that the EU was “positively disposed” to the idea. The force is to be sent by the middle of July at the latest. The EU force is likely to comprise some 2,000 – 3,000 soldiers. France is likely to be the leading force in the mission, and she is expected to send some 1,000 soldiers. Sweden and Britain are also expected to participate. Belgium, the former colonial power, will provide transport facilities. The war in Congo is one of the greatest unreported wars in history. It is estimated that 300,000 people have been killed in fighting, that 3,000,000 have died in total from malnutrition and disease, and that 50,000 have died in the last four years in the Northern province of Ituri where the EU forces are to be sent. There are over a million internally displaced people in Congo already. [Katja Riddersbusch, Die Welt, 28^th May 2003]