A new hope?

Many thanks to David for offering me a chance to raise my profile just before the second edition of the Satin Pajama Awards with a two-weeks guest-blogging stint here at AFOE.

For the 99% of you who don’t already know me, I usually display my limited knowledge of economics and politics at my own blog Ceteris Paribus and also, though not that often since a certain fateful 29th of May, at the group blog Publius. Oh, and I’m also French, which explains my awful English style and may or may not be a good reason to disregard my analysis about European matters.

Anyway, enough about me, since the quite unexpected European budget deal of last night offers plenty of things to write about.

First of all, I think the deal itself offers a weak refutation of the “curse of the big countries” argument made by Doug. Sure, the mere existence of a deal doesn’t provide conclusive proof of success. The Nice treaty wasn’t the kind of monstrous absurdity that most people now think it is, but it was a pretty bad deal nonetheless and certainly bad enough to deem the French presidency of 2000 a failure.

The budget for 2007-2013 agreed today is also flawed, as all grand European compromises are, almost by definition. But it is a real and significant achievement in what was otherwise an annus horribilis for the EU. The soft bigotry of low expectations is playing its part here, to be sure. But, assuming a positive vote from the grudging Parliament, the famed European bicycle is at least finally moving forward again.

A good case can be made that the fact that Blair was in the driver’s seat was the major reason for the agreement. Remember that only Britain really blocked the Juncker budget proposal last June. It was now and never for Blair and the other countries knew it, as BBC Europe editor Mark Mardell recounts in his excellent Summit diary:

For a couple of weeks now, the Foreign Office and Downing Street have been arguing that it isn’t going to get any better than this: if a deal isn’t reached by this weekend it can’t be under the Austrian presidency which starts in January or the Finns who hold the reins after that.

They haven’t quite said that Britain would veto any deal on offer next year but logic is on their side. If the devilishly clever but dastardly underhand British (that’s how the Foreign Office flatter themselves we’re seen by the rest of Europe) can’t design a deal to their own liking during their own presidency then how can anyone else come up with anything more acceptable?

Well, many leaders have bought this argument – or at least pretend to have done so.

They emerged suggesting that a deal simply MUST be done by this weekend or it is inevitable that the European Parliament will be left in 2007 to set the deal year by year, and their proposals would be, in the words of the Swedish prime minister, “frightening”.

Whether Blair was serious or not about blocking any budget deal next year, his strong-arm tactics were pretty darn effective to snatch a few more concessions from the other member states. Not enough to please the British press, to be sure, but enough to get a not insubstantial financial and political improvement for Britain compared to the June baseline. And all that with Blair reclaiming his place in history as the most pro-European British Prime minister since Edward Heath.

The other big winner of the summit is of course Angela Merkel. The Süddeutsche Zeitung may be overdoing it with a “the Angela-summit” title, but Merkel has emerged, somewhat unexpectedly considering her lack of experience at the European level, as an effective power-broker between Britain and France. I remember that, back when the EU Constitution debate was tearing France apart last spring, the “oui” coalition made great hay of the fact that Germany was bound to turn right in the near-feature. Consequently, any suggestion that a “renegotiation” of the EU Constitution would be more favourable, as seen from a French point of view, was just flat-out absurd: better to vote “yes” now to a text that was devised when a majority of EU member states were on our side than to try to ram a “more social” treaty down the throat of a majority of right-leaning governments. I still believe that particular argument, of course.

But, in light of the Brussels summit and of the damage done to Europe by the Chirac-Schröder alliance, I now tend to think that the arrival of Angela Merkel could be very good news indeed for those of us who want a less dysfunctional and more forward-looking European Union.

Or, Le Monde says in its last editorial titled “European recovery“, “beyond an always disappointing fight over percentages, the Brussels summit has given a few signs of hope”. Not that bad, considering where we were only a few days ago.

9 thoughts on “A new hope?

  1. the arrival of Angela Merkel could be very good news indeed for those of us who want a less dysfunctional and more forward-looking European Union

    Still better news: the departure of J Chirac.
    I hope you’re right, and that Merkel might play a valuable part in keeping his eventual successor honest. Schroder’s complicity in the 2002 deal was shameful.

  2. An excellent post Emmanuel …

    _”First of all, I think the deal itself offers a weak refutation of the “curse of the big countries” argument made by Doug. Sure, the mere existence of a deal doesn’t provide conclusive proof of success”_

    A good point. Perhaps big countries can have good presidencies but the fact remains that Blair’s vigorous attempt to shield the rebate is not the best outset to lead these kinds of budgetary negotiations.

  3. Bert : Still better news: the departure of J Chirac.

    Assuming his replacement is better. Never underestimate the capacity of French politics to disappoint.

    At any rate, I think the big clincher here is the end of the Chirac-Schröder axis : maybe the “anti-France” axis is better off with a rigid but politically more or less dead French president than with a more reformist but more powerful one. Also important is the fact that Chirac knows now that his dream of a third mandate in 2007 is just that, a dream. Which could have led him to adopt a devil may care attitude when it comes to the budget battles of 2008 or after.

    Claus : Perhaps big countries can have good presidencies but the fact remains that Blair’s vigorous attempt to shield the rebate is not the best outset to lead these kinds of budgetary negotiations.

    I agree. Whether this particular British presidency can be deemed a success is really a judgement call. It depends in some important way on what the budgetary review of 2008 will achieve : would it yield yet another report to be shelved in the Berlaymont library or some major rearrangement of the EU budget(i.e. less PAC)? Part of my (limited) optimism stems from the fact that I think that the second possibility is a lot more likely now than one week ago.

    But maybe I’m wrong (wouldn’t be the first time…), since the wording of the agreement is, as usual, very vague, notably as to the date when a new budget structure could come into force (could the financial perpectives be modified mid-exercice?). And it’s true, as The Economist points out, that the overall budget is very disappointing when it comes to aid to the new members states.

  4. Re Chirac –
    Good point about 2007, and a plausible theory about why he gave ground on 2008.

    Last week’s Journal du Dimanche poll finds only 1% of voters want him to stand again. Take into account the margin of error, and Chirac’s support could actually be less than zero.
    I had assumed that his long, long years defining himself as the staunchest defender of agricultural self-interest might count for something, and that he would have put up more of a struggle. His concession of a genuine review makes sense though if he has now concluded that he will be out of power when the real concessions are forced on France. We might even give him some credit (as a realistic politician if not a statesman) for recognising that a future leadership might make a better fist of fighting France’s corner than he is now capable of making.

  5. Claus, something else to put in the balance when judging the UK presidency: a membership process agreed for Turkey. Not universally popular, to say the least, but undeniably a Blair achievement.
    Need I point out that Merkel would have made this much harder had she been around at the time.

    She’s had an incredibly good press since the summit, not just in Germany but worldwide. The exasperation with Schroder’s spinelessness was part of it I’m sure, but she seems to have been effective in heading off the very real prospect of a wrecking alliance between France and Poland.

    That said, these high hopes are based on a small amount of evidence thus far. Let’s see …

  6. One might say that this fight has at least given the Commission a mandate to be a little more radical that they otherwise would have been in looking at what the Financial Perspective post 2014 will look like. That’s the good news.

    The bad news is that we have to wait till 2014 for any radical change (if then). The CAP soldiers on like a crotte de chien on your sole you can’t get rid of. Bussereau was reported today as saying, in Hong Kong, that the money agreed for the CAP in this deal was

    “le meilleur resultat obtenu parmi toutes les categories de dépenses”

    Barrosso was also reported today as saying that the deal has salvaged Europe’s credibility. Well… sorry…. but when everyone is talking about the need to modernise and dynamise Europe, and then the outcome is a financial framework that carrys on spending half the budget on the CAP up to 2014… need I say more?

  7. Very interesting post and discussion.

    “I now tend to think that the arrival of Angela Merkel could be very good news indeed for those of us who want a less dysfunctional and more forward-looking European Union.”

    I broadly agree, but I think perhaps we should wait awhile before we start uncorking the champagne bottles (or the Catalan Cava).

    Rupert has a very valid point. Both Doha and CAP now seem focused on 2014. Curiously the developing countries may be able to sit out this wait better than we can, since they have the future to dream of, whereas we need to reform to keep our systems in tact.

    “Never underestimate the capacity of French politics to disappoint.”

    Quite, and talking of which the rumour mill is working away. This weekend the name Ségolène Royal seems to have been going the rounds. Any thoughts?

    Sarkozy has apparently voiced an opinion: “I’ve always said Ségolène Royal is the most interesting figure in the Socialist party,”

    Does he mean, the most interesting, or the most interesting for him to beat? Are we really talking about the serious possibility of Sarko vs Sego in 2007?

  8. You think 2008 is meaningless? The case against the CAP strengthening, Germany no longer pliable, the principle now established of pacifying rural easterners with regional aid …?
    You may be 100% right, but I’m interested why you’re writing it off ahead of time.

    On Segolene Royal, isn’t this in part a symptom of the ghastly state of the PS? Given the viciousness with which the various factional chieftains have been hacking lumps off each other since the referendum campaign, a less polarising figure is inevitably attractive. Here’s an elegant, soignee, attractive woman, an enarque with an interesting Senegal back-story, who has risen to prominence on the arm of Francois Hollande. She commands no faction and thus does not irreversibly alienate others, keeps her mouth shut at party conferences, can draw on the resources of the leadership.
    Her weaknesses are the flipside of those strengths – no party base, no impressive entourage eager to do favours in exchange for future patronage, no developed programme, an excessive closeness to Hollande, a reliance on his entrenched political position and vulnerability to his varying political fortunes.
    I would have thought she’s still a long way from a credible challenge, but very conscious of her poll numbers, thinking about it and planning hard. On that score, her current website seems eloquent.
    I’ve always had a soft spot for Jack Lang myself.
    And realistically, barring a meltdown on the right, wouldn’t a PS success be making it into the second round this time?

    Apologies for the long comment.
    Like Guy, I’m interested to hear French voices on subjects like this.

Comments are closed.