European Foundation Intelligence Digest, 18th

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, 16^th 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, 17^th 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, 15^th 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 16^th 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, 17^th 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, 17^th 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, 16^th 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, 16^th 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, 12^th September 2003]

Commission demands majority voting for budget

In a document published on 17^th 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, 15^th September 2003]

German president attacks Allies

The president of the Federal Republic of Germany, Johannes Rau, has attacked Great Britain and France for committing “terrible injustice” against Germans in the Second World War. The attacks concern the Potsdam agreement, which provided for the mass “transfer” (now known as “ethnic cleansing”) of Germans from territories which were awarded to Poland after World War II, and from the territory of Czechoslovakia. Rau’s statement comes within the context of a long-running argument over the post-war expulsion of Germans from Poland and Czechoslovakia, on which the Digest has frequently reported. Rau also said that the United States and the Soviet Union bore heavy responsibility for what had happened. He said, “As participants in the conferences of Tehran, Yalta and Potsdam, they cannot dissociate themselves from the consequences of their decisions which violated the rights of Germans.” Rau, who attacked France and Britain for giving in to Hitler at Munich, said, “Hitler’s criminal policy cannot excuse anyone who responded to terrible injustice with terrible injustice.” [www.german-foreign-policy.org, 15^th September 2003]

The seemingly endless argument over the post-war expulsions erupted again when the leader of the German expellees association, Erika Steinbach, took part in a discussion in Warsaw with Polish politicians on 16^th September. The subject was the proposed creation of a “Centre Against Expulsions” in Berlin. Steinbach said she was “shocked” by the Polish reaction against the planned centre. She offered to mollify Polish concerns that the centre would not distinguish between perpetrator and victim by saying that a Polish exhibit would be placed at the centre of it. But her Polish debating partner, the deputy speaker of the Polish parliament, Donald Tusk, said that no one in Poland would ever accept the project. Tusk added that he considered Steinbach to blame for the fact that many people who had worked for Polish-German reconciliation were now losing faith in the process. [Radio Free Europe Newsline, 16^th September 2003]

Polish anti-euros try to oust minister

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, 15^th September 2003]

`Fischer builds bridges in Rome`

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, 17^th September 2003]

Dutch government announces belt-tightening

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, 17^th September 2003]

Europeans and Americans differ on Iran

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, 15^th 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, 15^th September 2003]

Prodi loses his rag

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, 8^th 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, 12^th September 2003]

Belgium lets tax-dodgers off the hook

The Belgian government decided on 12^th 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 billion euros into the Belgian treasury, although a recent poll showed that only 11% of Belgians would accept these terms. [Jean-Pierre Stroobants, Le Monde, 16^th September 2003]