European Foundation Intelligence Digest, 18th

Lord of the flies

The president of the European Convention, Valéry Giscard d’Estaing, which has drawn up a draft constitution for the European Union, has an important ally in Silvio Berlusconi, the prime minister of Italy. Following the appalling start to the Italian presidency, Berlusconi is determined to push ahead with the European constitution. He has said that he will be “vigilant” so that the debate on the constitution is not now re-opened, i.e. that the beginnings of dissent about important details are suppressed so that the document is retained substantially unchanged. Berlusconi has long desired the constitution to be signed in Rome under the Italian presidency of the EU and he has all the more reason to press ahead with the constitution in order to “redeem himself” in the eyes of the other euros.

Berlusconi has said he wants the inter-governmental conference to start on 4^th October in Rome and to conclude on 31^st December. The signature of the new constitutional treaty would take place, also in Rome, on 13^th June 2004, before the European elections.

Giscard has described the constitution as “the extreme point which has been able to be reached without ripping the fragile European fabric.” Berlusconi has said that he intends to continue the art of mediation right to the end, while also saying that he is realistic about the most controversial aspects of the text. For instance, he says that he does not think it is possible to abolish the national veto entirely, even though this is what the Italian government would like to do. So he has now publicly stated that he does not think it is realistic to go any further than the constitution does already. “Some countries have already expressed a negative opinion on this subject,” he said, presumably referring to Britain’s lines in the sand on majority voting for foreign policy and tax. Berlusconi has also said that he does not think the new constitution can contain any reference to Europe’s Christian values, as the Pope has requested, and as Italy, Spain, Poland and Ireland have also proposed. “I undertake to make this proposal again,” he said, “but frankly I do not think it can be accepted by the 25 countries.” The Italian prime minister added that he intends to achieve the goals he has set himself by using “gentle violence”, as Giscard himself suggested. These might include the very Italian method of “a conclave”: “when you need to elect a Pope, you don’t allow people to leave until they declare habemus papam. We might need to do the same thing to get results in the Intergovernmental Conference.” During the joint press conference held by Giscard and Berlusconi, a fly started to pester the former French president. Berlusconi jokingly called the fly “euroscepticism” – before swatting it to death with one fell swoop. “That is the first victim of the constitution,” smiled Giscard. [Salvatore Aloise, Le Monde, 20^th July 2003] You have been warned.

Lithuanian minister warns against haste

While the heavy hitters of the European construction want to make fast progress on the constitution, the Foreign Minister of Lithuania has warned against rushing the process. Antanas Valionis told a meeting of the EU General Affairs and External Relations Council that the draft constitution was too important a document to be rushed through simply to fit the Italian presidency’s wish to complete the document during its six-month tenure. [Radio Free Europe Newsline, 22^nd July 2003]

Schreyer wants to change budget contributions

The commissar with responsibility for the budget, Michele Schreyer, says she is keen to readjust the way the budget contributions are calculated so that Germany pays less and Britain more. She says she is going to put forward a new correction mechanism. “We need a solution which distributes the burden more equitably,” she said. The new mechanism would limit payments by net contributing countries to a certain percentage of GDP. She said that there was no way that the EU could continue with the British rebate, but that it would also be impossible to abolish it completely either. She indicated that Britain would continue to get a reduced rebate. She also said that she was in favour of strengthening some aspects of EU policy at the expense of the CAP. She also criticised the proposal made in the European convention that financial questions should continue to be subject to unanimous vote. “Then there will be 25 governments around the table and anyone who has a particular wish will be able to block everything until he is satisfied. This is the most expensive solution imaginable.” The budget for 2004 will rise by 2.7% to some €100 million, of which Germany will provide 22%. [Handelsblatt, 16^th July 2003]

Brussels crushes sensible reform proposals

A secret report commissioned by the president of the European Commission, Romano Prodi, has caused a stir in the little world of Brussels, both because of the manner of its preparation and because of its contents. On 13^th July, during a meeting called to discuss the future budget of the EU, and at which various groups were due to present their reports, Prodi apparently unexpectedly presented a document which, according to sources, “poisoned the discussion”. Some commissars called it “ a provocation”. People resented the fact that the document was made public, when all the others were kept for internal discussion. The suspicion is that the document reflects Prodi’s own views and that he was trying to bounce everyone else into accepting them. A Belgian professor called André Sapir, who is also a political advisor to Prodi, compiled the report. It questions the two most important parts of the EU budget, the structural funds and the agricultural policy. “In its present form,” says the text, “the EU budget is a historical vestige. Its expenditure, its procedures and its methods are all in contradiction with the present state of the Union, and with the future.” The commissars in charge of the two main spending departments of the Commission were especially cheesed off. Michel Barnier, the commissar for regional policy, told Le Monde of his “fundamental and philosophical disagreement” with the proposal completely to dismantle the EU’s regional policy. Sources close to the agriculture commissar, meanwhile, have pointed out that the document suggests a “re-nationalisation of the CAP” and that this would pose huge problems. Prodi’s spokesman tried to say that the Sapir report does not represent the position of the Commission. [Thomas Ferenczi and Philippe Ricard, Le Monde, 17^th July 2003] Prodi had to conduct quite a considerable damage-limitation operation. He let it be known through his spokesman that he had decided not to take a position on it and that he was not, after all, trying to influence the discussion. But discussion about the report’s main proposals has inevitably continued. Sapir suggested, for instance, that regional policy be replaced by aid given to the poorest states, not regions, and that these be the candidate countries, Spain, Portugal and Greece. This would mean that no further aid would be given to the poorest regions in rich states. He also suggested that the CAP was supporting an economic sector which is fundamentally in decline. Franz Fischler, the agriculture commissar, said that the report’s ideas might be academically valid but that in practice they would imply the creation of 28 national agriculture policies. “The value added of such a re-nationalisation would be negative,” he said. Prodi’s stated aim of “starting a debate” seems to have succeeded. [Thomas Ferenczi & Philippe Ricard, Le Monde, 19^th July 2003]

To add insult to injury, the Sapir report has also suggested canning the Stability Pact, and in particular its most famous rule, that the budget deficit should not be more than 3% of GDP. The committee suggests that this rule should be able to be broken if a country’s expected economic growth is zero. Currently the pact allows for the 3% rule to be broken only when the economy has contracted by 2%. “We must give the highest priority to growth,” said André Sapir. He and his colleagues also suggested that countries with low overall debt burdens should be allowed more flexibility with their deficits. The experts called for more public investment in research and development, as a way of promoting growth. This is partly why they have also called for a cut in spending on agriculture. Economists are also divided on whether keeping to the Stability Pact is responsible for the current extended period of low growth. Analysts have said, in the context of forthcoming tax cuts in Germany, that it is irrelevant economically whether the deficit is 3% or 4%. They say that France and Germany cannot stick to the rules anyway, so it would be better for the Pact’s credibility if the rules were changed first, rather than everyone muddling through. [Handelsblatt, 17^th July 2003]

Commission wants to regulate advertising

The European Commission wants to strengthen the rules for the advertising of foodstuffs. Unverifiable statements like “Guinness is good for you” or “Makes children happy” will be forbidden. David Byrne, the commissar for consumer protection, said that the decision about which slogans to allow, and which to forbid, would sometimes be difficult, and that it would be open to discretion. But the use of certain terms, like “low fat”, would be strictly defined. Statements about the health-giving properties of food will be allowed only if they have been scientifically proven. So statements about calcium being good for your bones are all right, while statements about rye bread being good for your heart will not be, at least not without special permission. German food producers have already criticised the proposals. “Advertisements which are not obviously false should not be banned,” says one of the main trade associations. “Censorship of advertisements about health would have a terrible effect on the food industry,” argues the association, because administrative costs would rise with claims and counter-claims. [Handelsblatt, 16^th July 2003]

Aux armes, Européens!

On the occasion of a ceremony in Berlin to mark the 59^th anniversary of the failed attempt on Adolf Hitler’s life, the French defence minister, Michèle Alliot-Marie, has said, “French and German soldiers are now brothers in arms, and have been for many years.” She listed the various “peace-keeping missions” in which the two countries have participated. Some people protested against celebrating this anniversary with a military parade, but the French minister said that it was “one of the founding dates of the new German army,” the attack on 20^th July 1944 having been carried out by senior army officers. “The rapprochement between our two peoples was first brought about by soldiers,” she said. “Fifteen years ago was the first Franco-German defence council. Ten years ago the Franco-German brigade was born, the matrix of the Eurocorps, which is progressively uniting all the nations of the European continent. This year, to celebrate that event, it was the head of the Eurocorps, a German general, General Karnerhoff, who opened the parade on 14^th July on the Champs-Elysées in Paris.” The German defence minister, Peter Struck, agreed saying that the Franco-German cooperation was the motor of rapprochement in Europe and the guarantor of an important European pillar within Nato.” [Le Monde, 20^th July 2003]

Schulz says sorry

The German MEP who had a row with Silvio Berlusconi in the European Parliament at the beginning of the Italian presidency, Martin Schulz, has formally apologised to the Italian government. Berlusconi had said of Mr. Schulz that he should audition for the role of a concentration camp commandant, and the remark created a huge fuss which culminated, among other things, in Gerhard Schröder cancelling his holiday on the Amalfi coast. An Italian minister, now sacked, had attacked German tourists as arrogant, and Schulz weighed in saying that, “In Italy, a racist government is in office.” Now Schulz has said, “I would like to apologise to the Italian government. I made a mistake. I regret that with my partial statement I attacked the whole government.” Schulz had wanted to say that the Northern League was racist, and its leader, the immigration minister Umberto Bossi, not the whole government. Bossi had recently suggested that the Italian navy torpedo boats carrying illegal immigrants into Italy. But other Germans have carried on the argument with the Italians. Heide Simonis, the prime minister of Schleswig-Holstein, told the Rheinische Merkur, “Through the Chancellor’s cancellation of his holiday, many people in Italy have come to understand that their government is gaga, to say the least.” [Handelsblatt, 16^th July 2003]

Klaus goes to Paris

The Czech president, Václav Klaus, has visited Jacques Chirac and tried to convince his French host that he is not the rabid europhobe which the press sometimes makes him out to be. He said that the Czech Republic was determined to become “a full member” of the EU, and said that he wanted to correct the false impression given about him in the French press. Klaus had been quoted in Le Figaro saying that the European constitution was “not needed”. Klaus said that he was against the creation of a European defence system in parallel to that of Nato. “The Czech republic was very happy to join Nato five years ago,” he said. (It joined in 1999 but signed the treaty in 1998.) I therefore do not consider it necessary to put in place a European military structure in parallel to Nato.” [Le Monde, 15^th July 2003]

Eurostat scandal rumbles on

Planistat, the Paris company implicated in the scandal unfolding at the EU’s statistical office, has denied being involved in any financial fraud. Planistat has won contracts worth some €41 million over the last 10 years but the European Commission has suspended them while the investigation continues into Eurostat’s secret bank accounts and accounting fraud. Planistat has said it will appeal against the suspension of the contracts. Hervé Charlot, the president of Planistat, has said that there is no reason for the contracts to be suspended, and that the EU’s anti-fraud office, OLAF, has not even asked him any questions, even though judicial proceedings have been opened against Plantistat. The contracts in question involve the sale of information by Eurostat via Planistat. Mr. Charlot insists that the contracts signed between his company and Eurostat were won after the proper tender process and that everything is above board. [Philippe Ricard, Le Monde, 15^th July 2003]

Mr. Berlusconi goes to Crawford

Faced with derision and contempt in Europe, the Italian prime minister has, like Tony Blair, found that the reception is distinctly warmer for him on the other side of the Atlantic. Silvio Berlusconi, who is also the 14^th richest man in the world, was a guest at George Bush’s ranch in Texas, an invitation which the American president has said he will not extend to Jacques Chirac. The visit seems to have gone extremely well. Berlusconi said after the visit that he and Bush “agreed about everything”, from the Middle East to the war on terror. At the press conference which ended the visit, the two leaders spared no praise for one another. Berlusconi started to put in place his pre-announced programme of reconstructing the Atlantic alliance when he said that, “between the USA and Europe there should prosper a culture of union and cohesion, not one of division. Egoism, narcissism and division must never win.” [La Repubblica, 21^st July 2003]

EU prepares the way for GM food

EU agriculture ministers have approved a decision by the European Parliament to allow genetically modified food to be sold on the European market. The new decision requires GM food to be labelled as such throughout the whole production process. It is expected to enter into force in September. This overturns a 7-year ban and import restrictions which have been in force since 1998. Henceforth, all products with more than 0.9% of GM organisms in them must be marketed as GM. The directive does not seem to have decided, however, what to do about conventional products which may become pollinated with GM products from nearby fields. [Neue Zürcher Zeitung, 22^nd July 2003] The commissar for consumer protection, David Byrne, said that this measure was a response to US pressure being exerted through the World Trade Organisation. The US has been pressing for an end to an informal moratorium on the importation of GM food into the EU, and a spokesman for the Commission said that the EU states now had to decide what to do. Byrne tried to defend the measure saying that it would give consumers a clear choice, and that this was the precondition for lifting the moratorium. The French are saying that a decision on the moratorium should be taken only taken after the labelling regulations have entered into force. Some twenty authorisation procedures for GM products are on ice. The food industry will have six months to implement the new rules. [Der Standard, Vienna, 22^nd July 2003]

Strasbourg condemns Turkey

The European Court of Human Rights has ordered Turkey to pay €69,718 in damages to a group of Kurdish women who claimed that they had been tortured by the Turkish police in that they were incarcerated without access to a lawyer. They were locked up on suspicion of belonging to the Kurdish Workers’ Party (PKK). The court also ruled that the legal basis on which they were incarcerated was insufficient. The case goes back to 1993, when the women, now aged between 28 and 41, were apprehended in Istanbul. They were kept in custody for two weeks. In this time, they were beaten and given electric shocks; they were also suspended by their arms. But they were eventually released for lack of any convincing evidence against them. [Der Standard, 22^nd July 2003. A summary of the judgement can be read at http://www.echr.coe.int/Eng/Press/2003/july/Judgments22July2003.htm]

Benidorm bomb

The Spanish minister of the interior, Angel Acebes, has said that the government does not think that ETA has a stable structure on the Costa Blanca, and that the bombs which exploded in Benidorm and Alicante were planted by a “very small” group of terrorists. Investigations are focussing on the role in the attacks of José Troitiño, who is alleged to have planted the bombs in hotel rooms. The minister said that the organisational capacities of ETA had been “greatly reduced”. A 30 year-old Dutchman was said to be in a stable condition in the General Hospital in Alicante, while a 24 year-old German was said to be progressing. [El Mundo, 23^rd July 2003] ETA was banned by the Spanish authorities last August.

Falling out among thieves

The pro-reformist coalition in Serbia seems to be breaking up, just as the West was congratulating that country for its massive crackdown on “organised crime”. The former governor of the central bank, Mladjan Dinkić – who is 38, and who plays the guitar in a rock band – has been sacked following his accusation that the Interior Minister, Dušan Mihailović, knowingly covered for two officials in the government who were involved in a money-laundering operation worth some $1.6 million. The two officials in turn accused Mr. Dinkić and Miroslav Labus, his party boss, of using government funds for party political purposes and other forms of corruption. One of them also accused Mr. Dinkić of having business dealings with a known criminal. [Vesti, Radio Free Europe Newsline, 22^nd July 2003]