Issue No. 176
18th September 2003
I. General European News
European Foundation
Intelligence Digest
Issue No. 176
18th September 2003
I. General European News
Europeans blame Americans for WTO
collapse
Following the breakdown of the international trade negotiations at
Cancún, people are wondering whether the World Trade Organisation has any
future. The collapse of the talks,
which is being seen as a severe defeat for the European Union, was described by Pascal Lamy, the European
commissar for trade, as proof that the WTO was “a medieval organisation which
needs intensive care.” This was
apparently a widely shared view. People
are still trying to save faced by pretending that the timetable set for the
Doha round of negotiations (the end of next year) can still be respected, but
this seems unlikely, since at the end of 2004, there is not only the
presidential election in America but also the appointment of a new European
Commission. Moreover, the head of the
WTO, Supachai Panitchpadki, will retire in 2005. Although the president of the European Commission, Romano Prodi,
said that there was no point apportioning blame for the collapse, others were
not so discreet. “Who profits from the
crime?” asked one of the negotiators,
pointing the finger at the United States.
“Poor countries will certainly not benefit, nor will the European Union,
which had already made concessions over the Common Agricultural Policy while
the American Farm Bill remains intact.”
The negotiating strategy of Pascal Lamy, which consisted in trying to
divide Southern countries, was widely seen to be a failure: he had hoped to obtain concessions from them
on matters like investment and competition policy in return for changes to
agricultural policy. But the Group of
21 Southern countries retained a united front, in spite of the apparent
disparities between such huge southern countries as Brazil and India and the
smaller states. The defeat for the
European Union also consists in the fact that the World Trade Organisation
itself comes out of this very badly:
Brussels had always supported the Geneva-based organisation, which is
now politically weakened. One of the
reasons why the Southern countries remained in solidarity with one another is
that they perceive the WTO are being excessively dominated by big countries,
and even more so by their big corporations.
The arguments are likely now to be strengthened of those who say that
zones of free trade are preferable to a worldwide multilateral organisation
like the WTO. [Laurent Zecchini and Babette Stern, Le Monde, 16th
September 2003]
Euros try to save face over Sweden
It is the third vote the pro-European cause has lost in as many
years. Following the Danish rejection
of the euro in September 2001 and the Irish rejection of Nice in June 2001, now
the Swedes have rejected the euro.
There seems little chance now that either Britain or Denmark will ever
join, and that the opt-out obtained by the British Maastricht rebels in the
early 1990s will continue to define the political reality of the United Kingdom
for the next decade. The vote in Sweden
was decisive: 56% No, under 42% Yes. This was in spite of the so-called
“sympathy” vote caused by the assassination of the front woman for the Yes
campaign, the foreign minister Anna Lindh.
The German Chancellor tried to save face by saying that “the door is
still open” for Sweden to adopt the euro, while Romano Prodi was less diplomatic,
giving a psychoanalytical explanation for the vote. It was, he said, the result of “a fear of novelty, in particular
among simple people”. Unlike the Danish
No to Maastricht in 1992, however, or the Irish No to Nice, the effects of the
Swedish No to the euro are effectively nil on the European Union. It does not change anything, and it does not
prevent the ratification of any treaty.
Pro-Europeans like the French politician, Alain Lamassoure, tried sour
grapes when he said that the only effect would be on the Swedes
themselves. “They have made themselves
dependant on the euro zone, and they have simply excluded themselves from
participating in the elaboration of our policies.” What few people seem to care about is that the Swedish No drives
yet another coach and horses through the juridical structure of the EU, because
the Swedes, unlike the Danes and the British, have not negotiated any opt-out
from the single currency. For this
reason, Sweden is legally obliged to join the euro. But this European law, like so many others, will simply be
ignored. [Libération, 17th September 2003]
Eurosceptics confounded in Estonia
Many British Eurosceptics long dreamed that Estonia was an island of
Euroscepticism in a sea of Europhilia (although this was never the view of the Digest). Eurosceptic hopes that the plucky little
Baltic state would reject EU membership were resoundingly dashed when the
micro-state (about 1 million inhabitants) voted to join the EU by 67% to
33%. Anyone who had actually met the
Estonian Eurosceptic leaders could not have been in any doubt about the outcome
– they were the proverbial two men and a dog sitting in a bar. But for some reason, in this country, whose
economy has been ravaged by the pincer effect of EU dumping and irresponsible
“privatisation” policies, and whose per capita GDP is no more than a few
thousand dollars a year, has shone in the eyes of fantasists as a free-market
paradise. (Recent figures suggest that
the per capita GDP is $6,000, which would put Estonia behind Belarus, the
richest of the former Soviet republics, and only just on a par with its poor
fellow Baltic states, Latvia and Lithuania.)
[Libération, 15th
September 2003]
Much of the pro-euro
propaganda in Estonia was connected with putting the Soviet experience firmly
in the past. Various pro-EU figures
said that Estonia was now turned firmly towards the West. It was noteworthy, therefore, that the Yes
vote in Estonia was warmly welcomed by the Interior Minister of Russia, Boris
Gryzlov, who was speaking at a press conference with his Estonian opposite
number, Margus Leivo, in Tallinn on 16th September. He referred during his talk to the various
agreements on fighting crime, and cross-border travel, which Russia and Estonia
have recently signed. [Radio Free Europe Newsline,
17th September 2003]
The Estonian government lost no time in encouraging
its neighbour, Latvia – the last of the accession countries to vote on EU
membership – to vote Yes. The Estonian
prime minister joined his Latvian counterpart in the town of Cesis, where a
battle for Baltic independence was fought in 1919, to say that a Latvian Yes
would mean that country’s “return to Europe”.
It would, he said, “correct one of the largest mistakes of
history.” [RFE, 17th September 2003]
Commission accepts European
president
In a significant development, the European Commission has announced a
U-turn in its policy on the future European constitution. Previously opposed to the notion of electing
a “President of Europe”, for fear that such an office would compromise its own
pre-eminence over the European legislative process, Brussels has now said that
it will accept the “compromise” outlined in the draft EU constitution drawn up
by Valéry Giscard d’Estaing’s Convention.
This “compromise” involves the election of a president of Europe for a
term of at least 2 ½ years. The
president would be the president of the European Council, which currently
rotates between the member states every six months, but his high profile and
the fact that he would be in the job for so long means that it is inevitable
that the power of the European Council will be strengthened relative to that of
the Commission. [Corriere della sera, 16th
September 2003]
Italy will not attend Iraq summit
Italy will not attend a summit meeting being convened on Saturday in Berlin
to discuss European policy on Iraq. The
summit will be attended by the German Chancellor, the French president and the
Spanish prime minister – but not by Silvio Berlusconi who currently holds the
presidency of the European Union itself.
The Italian opposition has immediately pointed out this anomaly, trying
to claim that it shows how sidelined Italy is from decision-making in
Europe. But the Italian foreign
minister denied that Italy had been excluded from the meeting. La Repubblica, 16th September 2003]
Raffarin justifies ignoring
Stability Pact
The French prime minister, Jean-Pierre Raffarin, has been explaining why
France needs to run a budget deficit of 4% of GDP. Raffarin said that the purpose of the Stability Pact was to
reconcile “discipline and growth” – which is a bit like saying that the point
of rules is that they should be broken.
He claimed that “common thinking” was emerging on this matter in Europe,
which meant that France was not isolated.
In other words, if he is right, then the Stability Pact is a dead
letter. There is now no prospect that
France will respect the Pact before 2006, which means that it has never been
respected. Protestations by the
Brussels Commission and the European Central Bank in Frankfurt – who both say that
the Pact must be respected in full – are being simply ignored. [Le Monde, 12th September 2003]
Commission demands majority voting
for budget
In a document published on 17th September, the European
Commission has said that it is time to abandon the national veto on budgetary
matters and move instead to a system of majority voting. The next budget for 2007-2013 will have to
be decided shortly after the EU has been enlarged to include ten new members,
i.e. with 25 member states. Valéry
Giscard d’Estaing’s draft constitution did not propose abandoning the principle
of unanimity for the budget, but now this is exactly what the Commission has
done. (This shows how ephemeral the
so-called “constitution” is, because the pressure to change is building up even
before it has been signed.) The
Commission says that the preservation of the principle of unanimity will make
the next budget negotiations extremely difficult, whereas “a more equitable
result for all” could be achieved if the vote was taken by qualified
majority. This position, which was
announced simultaneously with the Commission’s decision to accept the principle
of a European president, means that the negotiations over the constitution in
the Inter-governmental conference, which starts in October, are bound to be
tough. The famous “draft” will
undoubtedly be re-opened, causing very important issues to be debated. Many fear that the whole draft will unravel
if significant parts of it are changed.
The Commission also thinks that unanimity should be abandoned for future
treaty amendments. “This state of
affairs could lead to the total paralysis of the Union,” says Brussels. In other words, the Commission wants the
institutions of the EU to escape totally from the control of each member state,
and instead to become free-floating arrangements with their own source of
legitimacy. The Commission also wants
there to be one commissar per state (see Digest No. 175) even though the
draft constitution says there should be only 15. [Arnaud Leparmentier,
Le Monde, 15th September 2003]
The anti-EU
League of Polish Families has put down a motion calling for he dismissal of the
Polish minister for Europe, Danuta Huebner.
Mrs Huebner apparently said that Poland rules out vetoing the European
constitution even before the government’s stance on the matter had been
officially announced. Roman Giertych,
the deputy leader of the League’s parliamentary party, said that the draft
constitution contained numerous elements which were unfavourable to Poland. [Radio Free Europe Newsline, 15th September 2003]
The German
foreign minister, Joschka Fischer, has travelled to Rome for a demonstratively
friendly meeting with his Italian opposite number, Franco Frattini. This visit follows the chill in
German-Italian relations during the summer, where various rows led to the
German Chancellor cancelling his annual holiday on the Amalfi coast. No mention was made of the summertime
arguments; everything was done to let
bygones be bygones. Indeed, the two
countries said that nothing separated them on the big questions facing the
European Union, especially the final stages of negotiation over the European
constitution. The two ministers said
that there could be no more hesitation about the constitution, which would
“finally allow citizens to participate” in the EU process. Evidently the German sense of humour has
lost none of its irony. [Die Welt, 17th September
2003]
The government
of the Netherlands has said that it must introducing a drastic “savings
programme” (i.e. spend less and tax more) in order to clear up the state
finances. Queen Beatrix, in a speech
read out in the name of the government, announced that the Netherlands were
suffering from an economic and financial crisis as gross domestic product had
dropped by 0.5% in the second quarter of 2003.
She said, “We must strengthen economic structures and we must
fundamentally reform our social security system. Nearly all citizens will have less money to spend next
year.” A “change in the whole culture”
was necessary, she said, in order to make things better in the long term. Cuts will be made in the social security
system, in health, and higher contributions to both these will be demanded from
citizens in the form of taxes. Defence
spending is also to be cut. Early retirement
schemes are to go, and payments made to people who claim to be unable to work
(a very big scam in the Netherlands) are also to be cut back. Unemployment is expected to rise in the
Netherlands to 7% next year, putting that country back near the upper level of
EU jobless figures, whereas it had previously (in the 1990s) been one of
Europe’s showcase countries, with an official unemployment rate hovering around
5%. Die Welt, 17th September 2003]
A Brussels-based think-tank, the European
Policy Centre, led by the veteran pro-euro campaigner, John Palmer, has said
that Iran is an important economic and political partner for the European
Union. He was thus distancing himself
from the more aggressive tone adopted recently towards Iran by the United States,
which last Friday successfully pushed for a resolution by the International
Atomic Energy Agency instructing Iran to sign and ratify an additional protocol
to the Non-Proliferation Treaty by the end of October. Iran, Palmer said, “is a country of immense
culture, potentially a very important economic and political partner of the
EU.” He stressed the success of the
“reform” movement there, as well as Iran’s strategic importance and influence
in the Middle East. He added that
cooperation with Iran was essential for advancing the cause of peace in
Israel-Palestine, and said that the EU did not and should not agree with the
American branding of the Islamic Republic as part of the “axis of evil”. Palmer also said, “The Europeans have been
critical of the illegal occupation of Palestinian lands, they have criticised
the Israeli policy of political assassinations, they have criticised the
Israeli attempt to create an apartheid wall.”
[Tehran Times,
15th September 2003]
Slovene ambassador returns to Zagreb
Following an unexpected row between Slovenia
and Croatia over the former country’s right to enjoy access to the Adriatic
sea, the Slovene ambassador has returned to the Croatian capital following the
mutual withdrawal of the ambassadors of both countries “for consultations”. [Radio Free Europe Newsline, 15th September 2003]
Romano Prodi, the current president of the European Commission and former prime minister of Italy, has given an angry and detailed rebuttal of accusations that he was involved in bribe-taking when Telecom Italia bought the Serbian telecommunications company in 1997 while he was head of the government.
Prodi said that he had “never been informed in any way, neither directly nor indirectly” about the acquisition of a stake in Telekom Serbia by Telecom Italia. He reaffirmed his readiness to testify before any enquiry into the matter. Prodi said that he was the victim of “an extremely violent political campaign” and that he had been condemned by the mass-media in a totally unfair and unprecedented way. He alluded darkly to the fact that “the theme of liberty and pluralism in information, and of the relationship between the ownership of mass-media and politics” needed to be discussed – bureaucratic gobbledegook for saying that the campaign was being orchestrated by the Berlusconi-owned press and TV. Prodi is widely seen as a possible challenger to Berlusconi if he decides to return to Italian politics after leaving the European Commission next year. The Telekom Serbia scandal has hit the highest levels of the Italian state, because the president, Carlo Azeglio Ciampi, was head of the Central Bank at the time. The usual accusations of corruption are made all the more lurid by the allegation that the then president of Serbia, Slobodan Milosevic, used the money from Telecom Italia to finance his “ethnic cleansing” in Kosovo. [La Repubblica, 8th September 2003]
Romanian EU minister accused of hands
in till
The EU’s anti-fraud office, OLAF, has
decided to open an investigation into accusations that the Romanian minister
for European Integration, Hildegard Puwak, mishandled EU funds to favour
members of her family. It is alleged
that Mrs Puwak selected companies headed by her husband and son to be
recipients of EU money. [Evenimentul zilei, Bucharest, 12th September 2003]
Belgium lets
tax-dodgers off the hook
The Belgian government decided on 12th September to grant an amnesty to Belgian tax-payers if they bring back into Belgium funds they illegally placed in Luxembourg for tax-evasion purposes. The tax-dodgers will be taxed only at 9% or 6% if they reinvest the money in property or life assurance. It is hoped that this measure will bring between 500 million and 1 billio