Issue No. 170
25th
June 2003
Issue No. 170
25th
June 2003
The European Commission has warned the government that it will not support Berlin’s plan to cut taxes in 2004, in order to stimulate growth. “The German government cannot necessarily count on our support if budgetary proposals are made which are not compatible with the fiscal rules of economic and monetary union,” said the spokesman for the monetary commissar on 24th June. In other words: adopting the euro means abandoning control over your own fiscal policy. Germany had been contemplating cutting taxes, even if this meant that its budget deficit would rise over 3%, as a way of kick-starting the economy. But the spokesman insisted that the Stability Pact must be respected. On Tuesday, the Ifo economics institute in Munich revised its growth predictions downwards, to 0.5% for 2003. Chancellor Schröder has said that he wants a rapid decision on his tax-cutting proposal, which was to enter into force in 2005. [Le Monde, Agence France Presse, 25th June 2003]
While attention
has been focussed this year on arguments over the European Constitution, the
battle over the budget of the EU is to start at the end of this year. It promises to be a very difficult debate. Nearly everything will be on the table –
especially the structural funds, the British rebate. At the end of 2003 the 25 existing and new member states will
start discussing the budget for the period 2007-2013. The decisions must be reached by unanimity. Ireland and Spain are expected to lose their
structural funds, because their GDP has vastly increased since the budget was
last fixed. In any case, the inclusion
of new member states will reduce the average per capita GDP and therefore
Western European states will tend to be above 75% of the average, which is the
threshold for receiving regional aid.
Italy, Germany, Portugal and Greece are also among the highest
recipients of regional aid. When the
new member states join in 2004, they will get only 22 billion euros in total,
because the budget rules do not change until 2006. But after that, they will doubtless lobby for increased
subsidies. Britain’s budget rebate will
also be revisited for discussion. It
was negotiated in 1984 when Britain was relatively poor. That situation has changed and so Britain is
likely to lose it in the new budget.
Pressure will be especially large because many of the new member states,
including Poland, the Czech Republic and Hungary, will be net contributors to
the EU budget when they join next year.
They will demand to know why they have to be net contributors when
Portugal, Greece, Ireland, Spain and the others are net recipients, and why
Britain is not a larger contributor.
Jacques Chirac started to attack the British rebate in the autumn of
2002; there seems little reason why he should not do so again this year. But the CAP is not really up for
discussion: France and Germany agreed
in 2002 that CAP spending would rise at slightly less than the rate of
inflation for the period 2007-2013, and this decision was approved by the 15. Moreover, agriculture ministers are even now
negotiating changes to the contents of the CAP, but this subject is not likely
to be revisited in the budgetary negotiations. In 2001, CAP spending reached €
41.5 billion: the primary beneficiary
is France (€9.2 billion), followed by Italy (€5.3 billion) and the United
Kingdom (€4 billion). In the period
2004-2006 the ten new member states will receive a total of €9.8 billion, i.e.
as much as France alone receives in a single year. [Arnaud
Leparmentier, Le Monde, 24th June 2003]
The EU heads of
state and government meeting in Thessaloniki have given themselves a year to
sign the new European constitution.
They expect to hold the ceremony in Rome before the next European
Parliament elections, which are due on 13th June 2004. An inter-governmental conference will start
in October, and it is expected to complete its work by the end of the
year. The 15 governments have said that
the draft constitution submitted by the former French president, Valéry Giscard
d’Estaing, is “a good basis for starting in (sic) the Intergovernmental
Conference”. [For presidency conclusions, see http:/ue.eu.int/newsroom/makeFrame.asp?MAX=&BID=76&DID=76279&LANG=1&File=/pressData/en/ec/76279.pdf&Picture=0]
According to commentators, it is
likely that the French will have a referendum on the constitution. Jacques Chirac has said, “In principle, I am
very open to this solution,” although he has said he will await further
developments before making a final decision.
Both Jacques Chirac and
Gerhard Schröder have said they are very happy with the text as it stands,
which Britain wants to amend. The
Danish prime minister has also voiced his support. The Belgian, Dutch and Italian governments have also been very
positive. [Arnaud Leparmentier & Laurent Zecchini, Le
Monde, 22nd June 2003]
Poland has joined Spain in expressing its
opposition to the changes proposed by the new European constitution to the
voting arrangement which were so painstakingly agreed in the Nice Treaty. (N.B. The British government accuses its
Eurorealist enemies in the opposition of wanting to “re-negotiate” the
treaties, but in reality the treaties are in a state of almost permanent
re-negotiation, as this row shows.)
Poland and Spain are angry at being downgraded by Giscard’s draft
text. The Polish Prime Minister, Leszek
Miller, said that he had heard no convincing arguments for changing the
majority voting system adopted at Nice in 2000. This was a clear statement of criticism of the draft
constitution. Miller said that the
system adopted at Nice provided the right balance between large, medium-sized
and small states. “The proposed changes
have nothing to do with greater democracy or simplicity,” he said. “It adds up to changing the proportions
between the member states on common decision.”
[Radio Free Europe Newsline, 23rd
June 2003]
The EU used the
summit to develop a new military doctrine, identical to that which has been
formally adopted by the United States of America. On the basis of a paper prepared by the EU’s Foreign Policy
chief, Javier Solana, the EU has said that it will react pre-emptively to
terrorism or to the proliferation of weapons of mass destruction. “We should be ready to act before a crisis
occurs. Conflict prevention and threat prevention cannot start too early.” [For the full text, see http:/ue.eu.int/pressdata/EN/reports/76255.pdf] The apparently bellicose
nature of this text, which the meeting approved, forced the German foreign
minister, Joschka Fischer, to reassure his audience that, “For us the use of
force is the latest, not the first means.”
The EU was also forced to deny that there was any connection between
this statement and its new policy on Iran:
the EU has recently cranked up its rhetoric against the Islamic
Republic: in the Presidency
Conclusions, it expressed “serious concern” at Iran’s “nuclear programme”, echoing
US statements on the same subject.
Fischer said, “We will use all our possibilities to prevent the
nuclearisation of Iran.” [Handelsblatt, 20th June
2003] According
to commentators, the purpose of the Solana paper is to build bridges with the
USA, after the diplomatic bust-up over Iraq.
The document says, “Acting together, the United States and the European
Union can be a force for good in the world.” The EU has also turned up the heat
on Iran, perhaps in an attempt to harmonise its foreign policy with
Washington’s new anti-Iranian rhetoric.
It has threatened Iran with sanctions if it does not cooperate fully
with the international community on its nuclear programme to ensure “full
transparency”, saying that these sanctions could go from the usual panoply of
economic measures to “robust intervention”. [Katja Riddersbusch, Die Welt, 21st
June 2003]
When Greece passes the rotating
presidency of the EU over to Italy at the end of June, the EU will be run by
two old political rivals – Romano Prodi, the president of the European
Commission, and his successor as prime minister of Italy, Silvio Berlusconi,
who will become president of the European Council. There is little love lost between the two Italians. Himself facing corruption charges, which he
attributes to political bias among the Italian judiciary, Mr. Berlusconi has
accused Romano Prodi of having facilitated the payment of bribes while he was
the head of an Italian state company. Prodi has said that he does not intend to
sue Mr. Berlusconi for libel, and he has promised to co-operate with the Italian
presidency. Many Italians on the left
are hoping that Mr. Prodi will return to Italian politics and become prime
minister again when his term runs out in Brussels. A third former Italian prime minister, Giuliano Amato, is
Vice-President of the European Convention, and he too has attacked
Berlusconi. Recriminations have already
started between Brussels and Rome, with the former alleging that the Italian
government has not made the necessary preparations for taking over the
presidency, and the latter replying that the necessary documents were not
provided in time. [Stephan Israel, Erich Kusch, Neue
Zürcher Zeitung, 22nd June 2003]
5
million jobless in Germany ‘not impossible’
The
head of the German Labour Office, Florian Gerster, has said that he does not
rule out a further rise in the unemployment figures this winter, and that the
total might exceed 5 million. “We are
assuming that there is a chance that we might remain under that figure,” he
said unintelligibly. “But if there is a
hard winter, then that could have effects which we cannot foresee now. But we believe that we can keep under 5
million.” He also tried to play down
the difference between “4.85 million” and “5.02 million” as merely
“symbolic”. Joschka Fischer, the
foreign minister, is the first cabinet minister to warn that unemployment might
exceed 5 million. January and February
are usually the months in which the jobless figures peak. The economics minister, Wolfgang Clement,
contradicted Fischer and said that the government was not expecting the figure
to rise that far. In May, 4,342,000
Germans were registered as being out of work.
The seasonally adjusted figure is expected to fall in June. [Handelsblatt,
23rd June 2003]
The
governor of the Bank of France, Jean-Claude Trichet, has been acquitted of the
allegations made against him in connection with the collapse of
Crédit-Lyonnais. The prosecution, which
had called for Mr. Trichet to be given a 10-month suspended prison sentence,
has said that it will not appeal against his acquittal. This has removed the last obstacle to his
appointment as the next President of the European Central Bank, to replace Wim
Duisenberg. The Elysée Palace has said
that it supports Trichet’s appointment, as has Romano Prodi and several
European governments. Now Trichet could
become president of the ECB by October or the end of the year. [Philippe
Ricard, Le Monde, 20th June 2003]
Bush
gets angry at Europe again
The
American president has expressed strong criticism of the EU’s refusal to import
genetically modified food. He said that
the EU’s refusal to import GM food was based on “groundless and unscientific
fears”, but he did not say whether the regulations which restrict the import of
foodstuffs like French cheeses into the USA were similarly based on groundless
fears. He said that these “artificial”
barriers prevented many African nations from using GM technology in their
agriculture, because they were afraid that they would not then be able to
export their products to Europe. Bush
appealed to Europeans on the basis of a continent which was suffering from
hunger to change its mind. Negotiations
between the EU and the USA on GM food collapsed in Geneva last week. The USA is now trying to take the matter to
the World Trade Organisation. Large US
food companies say they loose some $300 million a year in export revenues as a
result of the EU ban. The EU claims
that its rules on GM food are compatible with WTO rules. [Handelsblatt,
23rd June 2003]
Some people never give up. Following two failures by revanchist German
politicians in the European Parliament to make revocation of the Beneš decrees
a condition for Czech membership of the EU (in February and September last
year), the Bundesrat, the Upper House of the German Parliament, has now
approved a resolution on 20th June calling on the Czech Republic to
abolish them anyway. The resolution had
been put down by the usual suspects, the Christian Social Union and the
Christian Democratic Union, two sister parties who hold a majority in the
Bundesrat and who are traditionally close to the Association of Expellees and
the Sudeten German Landsmannschaft. The
resolution drew attention to a European Parliament resolution passed in 1999
which called on the decrees to be revoked.
It also praised a statement by the Czech government on 18th
June which deplored what happened in the Second World War. That statement said, “Neither World War II nor the
events and deeds of the period that followed it are acceptable from the
perspective of the present.” Although
there was of course no specific reference to the decrees, Germany was probably
meant to assume that they were implicitly included as the subject of regret.
The Czech president, Václav Klaus,
and the Czech foreign ministry, have expressed “surprise” at the Bundesrat
resolution. A spokesman for Klaus said he was “unpleasantly surprised” by it,
and recalled that a declaration issued by the Czech parliament in April 2002,
which says the decrees are untouchable and unchangeable, remains in force. Klaus’s spokesman added pointedly that the
Bundesrat should have issued its statement before the Czechs held their
referendum on EU membership because that “would have definitely been an
important piece of information for Czech voters.” The foreign ministry said that the European Parliament from 1999
had been qualified by subsequent legal opinions, by which he meant the two
reports issued by the European Parliament itself last year.
Discussions have also been held on
the matter between the Czech prime minister, Vladimir Spidla, and the Austrian
Chancellor, Wolfgang Schuessel, on the margins of the Thessaloniki summit. The Austrian foreign minister, Benita Ferrero-Waldner,
said that the Czech government statement was “an important first step” –
presumably implying that a full apology would be forthcoming from the Czechs,
followed by revocation of the decrees.
But Spidla said that any further statements on the matter from the Czech
side would be “out of place”. He added
that the statement was not directed only at Germany, or even at the Czech
Republic’s immediate neighbours in general, but instead at the whole of Europe,
on the specific occasion of the EU referendum.
Even though he insisted that there would be no further statements on the
matter, Chancellor Schuessel repeated his minister’s words about it being a
“very important first step”.
The Commissar
for enlargement, Günter Verheugen, a German, also pointedly welcomed the Czech
government’s statement. He called it “a
clear and unambiguous recognition of European values” – even though the
European Parliament’s own commission of legal experts said that the decrees
were not incompatible with existing EU law.
[Radio Free Europe
Newsline, 19th June, 23rd June 2003]
Belgium has bent to American and Israeli pressure and decided to pass a new law changing its so-called “universal jurisdiction”. The Belgian Prime Minister, Guy Verhofstadt, has said, “The events of recent weeks, which have seen the lodging of numerous suits against foreign leaders, have clearly shown that the 1993 law cannot be reasonably applied.” Flanked by deputies and ministers from numerous other Belgian parties, several of which have said they would oppose any change in the law, Mr. Verhofstadt explained the second raft of changes which he is to put before parliament, the first raft last April having failed to stem the flow of prosecutions requested against foreign leaders. The changes will include a key new requirement that the accused person is either of Belgian nationality, or that he lives in Belgium, or that the alleged victim is either Belgian or a resident of Belgium for at least three years. The new law will also suppress the “political filter”, according to which the Belgian cabinet was able to rule on the admissibility of prosecutions. Instead, the first president of the Court of Appeal will have this role. The bill also provides for the extradition of suspects to the new International Criminal Court in The Hague. “These changes will prevent abuses of the law and they will render superfluous any intervention by the executive, without affecting the intention, the usefulness or the ethical dimension of the law.” These changes mean that American, British or Israeli citizens can no longer be charged under Belgian law for alleged crimes against humanity: Tony Blair, George Bush and Ariel Sharon are all facing charges under the old law. The Belgian government denies having acted under pressure, even though the American government said it would move the Headquarters of NATO outside of Belgium unless the law was changed. [Rachel Crivellaro, La Libre Belgique, 22nd June 2003] Defenders of the law say that it enabled Belgium to convict four Rwandans of genocide two years ago.
According to some reports, the EU has thrown cold water on the hopes of the “Western Balkan” countries of ever joining the EU. This has made the governments of the successor states to the former Yugoslavia are very cross. The EU has reaffirmed the principle that it intends to admit the Western Balkan states (Croatia, Serbia-Montenegro, Bosnia-Herzegovina, Macedonia, Albania) to the EU, but it has refused to give them a timetable or a “road map”, and it has imposed new obligations on them, like the requirement that they fight against organised crime before being allowed to join. Since many of their governments are themselves involved in it, this might prove a little difficult. The statements issued at the Thessaloniki summit are being regarded as something of a wake-up call for these countries. The commission has made it clear that none of the states will benefit from a “fast track”, and this has especially annoyed the Croats, who imagined they had left the Balkans in 1991. The Croatian foreign minister tried to clutch at straws when he said that he still had high hopes for the Italian presidency, and that he expects unspecified “good things” from it. The Croatian president also tried to put a brave face on matters when he said that the summit had “justified our great expectations”. Croatia, which had been hoping to get a date of 2007 or 2010 for EU membership, has in fact left the summit empty handed. The Macedonian government was more realistic: the foreign minister Ilinka Mitreva, said, “We expected to achieve candidate status during the summit, but we did not.... We expected to be given a timetable for the integration process, but this did not happen. We expected to gain access to EU funds, but this access has not yet been granted.” [Radio Free Europe Newsline, 22nd June 2003]
This ambiguous position explains the
contradictory statements made by international luminaries at the summit. The High Representative in Bosnia-Herzegovina,
Paddy Ashdown, said that Bosnia would have to fight corruption better if it
wanted to stand a chance of joining the EU.
But since he is in fact the man who runs the country, this seems an odd
thing to say. Others said that this
failure to give the Balkan states a firm date would play into the hands of
those opposed to “reform”, who were equated with the principal culprits for
corruption. Similarly, Romano Prodi
said, on the one hand, that “The process of European unification will not be
complete without the countries of the Balkans becoming members,” and that the
Thessaloniki summit had signalled the irreversibility of the entry of the
Balkan states into the EU, but he also added inconsistently that not all Balkan
states would necessarily become members.
[La Repubblica,
21st June 2003; Le Monde, 22nd June 2003]
Published by The European Foundation, 62,
Brompton Road, London SW3 1BW
Tel. + 44 20 7590 9901, fax 7590 9975, euro.foundation@e-f.org.uk