The perfidious Albion
Following the French and Dutch referenda, the opinion in Denmark towards the proposed constitution moved with more than 10 percentage points in the negative direction, practically from one day to the other. Similarly, the general opinion towards EU in Norway turned around in the same drastic way. The Swiss barely voted for joining the Schengen agreement last Sunday although with a margin that was drastically reduced compared to earlier forecasts, based on opinion polls.
Why this? Can you imagine Mogens and Synnöve exclaim in excitement: ”My God, how could I ever think that the proposed constitution was any good! I am really grateful to Jean-Pierre and Marijke for opening my eyes to the evils of QMV, a catalogue of rights, prolonged presidency periods, the possibility for citizens initiatives and more power to the elected parliament. My gosh, this was a close shave: I almost made the wrong decision.” And Urs and Heidi feel a bit unhappy: “we should perhaps have listened to the French.”
No, that is not the way it is. Both the reasons for the no-votes and the opinion swings in other countries clearly demonstrate that the popular Referendum is entirely unsuitable for decision-making in the present context – a viewpoint we have long propagated in our various web chronicles. The results: the le Pens, Haiders, Bossis, Fortuyns (from an elevated position, hopefully), Lundgrens and Wollins, and of course all the British Europhobes, can rub their hands and breath morning air. This at the expense of millions of disenchanted no-voters.
The European project and the integration process –and this surely includes the monetary union- are, obviously, much too strong to be fundamentally damaged by temporary calamities. But it is also clear that the present political leadership does not have the moral and intellectual capacity to advance the process. Blair, Chirac, Schröder and Berlusconi will soon disappear from the scene – maybe a new generation will be more successful. But that would require that the concerns of the disillusioned population are taken seriously and that the policy is adjusted accordingly.
What are the real reasons behind the popular disenchantment that is spreading over Europe? The dissatisfaction is projected on the EU and its institutions but it has to do with EU only indirectly. The reasons can be encapsulated in the old adage: “It’s the economy stupid!” The economic policy of Europe must be overhauled and redirected towards employment creation and a fair distribution of the production gains. This will require an active financial policy and a reconquista of the abdicated political responsibility by reducing the influence of the monetarists and despite the protests of the market fundamentalists, the only winners from present conditions. If monetary policy really has anything like the importance that is pretended, the directives of the ECB should be thoroughly revised.
What will happen now? The task of the European Council in the middle of June has been further complicated by the recent English Alleingang on the Constitution issue with customary absence of any concern for supposed “partners” . It would have been easy to wait until the forthcoming summit meeting of the European Council and at least try to arrive at some common position before national measures were announced.
Nevertheless, Heads of States and Governments will need to show some kind of unity and ability to act when they meet on June 16. This may result in an unexpected agreement on the Financial Perspective for 2007 – 2013 although conventional wisdom so far has been that the various positions are too far away from each other and also too rigid. But even if there is an agreement, it will unfortunately not result in a good system: it will be another patch on the quilt called “The Own Resources System” which is bound to break up sooner or later. Nevertheless, an agreement is better than no agreement. The bone of contention, as always, will be the UK rebate on its contribution to the common budget. The proposal by the Luxembourg Presidency still contains the idea to freeze the rebate and introduce a successive scaling down. No English Prime Minister would accept this. All other member countries can be given more or less suitable concessions: Germany, Austria, the Netherlands and Sweden will just receive some money in order to keep quiet. France is panicking and prepared to accept almost anything as long as the agricultural policy is not touched. It would in principle be possible to agree on a Financial Framework at a level of 1.05 – 1.07 % of GNI. This could be considered as a 'victory' for the budget refuseniks which originally insisted on 1 % as against the 1.24 % of the Commission. The new member states would be losers but would at least avoid a difficult liquidity trap during the next few years. Practically everyone else would be reasonably satisfied. There would be little or no money for furthering the ill-conceived Lisbon objectives.
Mr. Blair, however, appearing arm in arm with Mr. Bush, has already declared that he is not prepared to compromise on the rebate. So for the second time within a couple of days the perfidious Albion has lived up to its name and reputation. It is strange that the UK does not take its policy to its logical consequence and leaves the Union. It would be a gain for everyone, particularly for the British. The UK would benefit from all economic and market advantages of the European integration, there would be no need for introducing the Euro or joining Schengen. Presumably the UK, like Norway and Switzerland, would have to pay something but certainly less than today. They could develop the transatlantic relations, so dear to their hearts. For the European countries the issue of the rebate would be resolved and the major brake on cooperation would be eliminated. The language could be kept (but the silly extra letters in words like 'labour' or 'programme' could be abolished...)
And above all, we wouldn't have to read the boring comments on Margot Wallströms blog.
Note: The "UK rebate" was introduced in 1984 when England was one of the poorest countries in the Common Market. Roughly speaking, the UK gets 2/3 of its negative net balance refunded through payments from the other member states which nowadays include such wealthy economies as Latvia, Lithuania, Slovakia and the like. Soon also Bulgaria and Romania will help to relieve the British financial plight. A freeze on the rebate would mean that Britain at least would have to pay their share for the enlargement of the EU to the latter countries. Mssrs Blair and Straw have openly declared, however, that they don't see that anything has changed since 1984.
The countries that 'suffer' most in absolute terms from the UK rebate are Germany, the Netherlands, Austria and Sweden. They also complain the loudest and were for that reason given compensatory cash payments as of 2002. This constitutes an additional burden on the remaining 20 member states, also the poorest ones.
See no evil, hear no evil but speak a lot
"Britain has opted out of a new pan European information network, the only EU country to turn down the Brussels funded contact centres.
Despite ranking near the top of recent eurobaramoter polls of citizens who know little or nothing about the EU, Britain will be unable to benefit from new information centres following a London request to postpone membership.....
....Britain is keen to keep the new initiative at arms length, highlighting the sensitivity of Europe ahead of any referendum on the EU constitution."
( From EUPolitix, 2005 05 04)
Learning from history?
Those who don't learn from history are doomed to repeat it as the man said. In the Swedish Euro Referendum last year, both parties evoked historical personalities to strengthen their respective causes: Adolf Hitler appeared for the no-side and the yes-side, not to be outdone, enlisted Joseph Stalin. French no-sayers now accuse the yes campaign for having borrowed its tactics from Fidel Castro which, of course, English boulevard rag Telegraph immediately is happy to report.
Nobody goes so far, however, as a Swedish professor of history who in a highly praised biography, claimed that King Gustavus Vasa (1496 - 1560), founder of the Swedish national state, would have been decidedly against introducing the euro, had he been alive today. Or at least last year.
My review of the Vasa biography, unfortunately only in Swedish.
Note in all fairness: The spokeswoman for the Swedish no-campaign clarified that when she likened her opponents to Hitler, she did not refer to "his fascist ideology." Maybe de Villiers and the Telegraph only mean that the yes-campaigners tend to speak for at least three hours at a time? Or that they smoke cigars?
First .eu domain online
Netzeitung.de reports that the first top level domain with the .eu extension has gone on line. It is of course eurid.eu which is the organization that manages the registration procedures through accredited registrars. It will take several months, however, before private persons can register a domain: organizations and trademark holders (!) have priority. If you are not an enterprise or an organization you have to be a natural person in order to register. This should disqualify the majority of the English commenters on Margot Wallström's blog.
More information on the site of eurid.
In another development, opinion polls on the French referendum now give a smaller lead for the no-side. Two polls even show them lagging the "yes". The race is not yet run. It may be a case where
Your lips tell me no no, but there is yes yes in your eyes.
More monetary cooperation
Cyprus, Latvia and Malta joined the ERM cooperation last Friday, thereby setting the stage for introducing the euro around 2007 - 2008 together with Estonia, Lithuania and Slovenia. The remaining new member states - Poland, the Czech Republic, Hungary and Slovakia, have greater budgetary problems and are unlikely to join until later in the decade. Nevertheless, economic and financial policy in those countries are aimed at meeting the conditions for joining the monetary cooperation. In a few years 18 out of the 25 member states will have introduced the euro with 4 others working on it. Positive signs amidst all the present constitutional europessimism.
England of course has its own agenda but the anti-euro policies of Denmark and Sweden can only be seen as an expression of nationalistic and isolationistic hubris against the background of the present development. In particular, the Swedish referendum one year ago now appears like a bad joke. Very bad, because it may take a decade or more before politicians dare come to reason. European issues are completely absent from the internal political debate which concentrates instead on pseudoproblems like personal scandals and the formation of new single-issue parties. In Denmark the social-democratic opposition is making overtures towards the ultra-right, anti EU, Peoples Party. In Denmark the use of a national currency is particularly annoying for a visitor because once outside Copenhagen or other big cities credit cards are as a rule not accepted unless it is the special Danish "Dancard."
Strangely enough, public opinion in Denmark and Sweden is dead against the European Constitution which is silly because its adaptation would give them, for the first time, the possibility to withdraw from the Union in an orderly fashion.
Non non Nanette
According to opinion polls, which of course are notoriously unreliable, the No side is rapidly gaining ground in the French referendum on the proposed EU constitution. The latest figures seem to be about 55 % "non" against 45 % "oui". (There is no je ne sais pas or je m'en fous pas mal in France?) But pourquoi?
Of those who intend to vote no, 31 % would do so in opposition to Turkish membership, 29 % because they want a more social European policy, 22 % because they are generally upset and mainly because they do not like the government of Mssrs Raffarin and Chirac. Only 26 % of the potential no-voters indicate that they want a renegotiation of the constitution proposal as reason for their intended vote.1
These results show why it is such a profoundly bad idea to put this proposal to a referendum. A no vote in France would practically kill the proposal but would say nothing about what people really think about the proposed constitution. Referenda in the UK and Sweden (not yet decided) would give the electorates there an opportunity to pour out their contempt for all things foreign and to protest against various parts of the government policy but would have nothing, or very little, to do with the proposed constitution for the Union.
Even if it is much too late, we repeat our own proposal to have the Constitution ratified by the national parliaments but twice and the second time after a new parliamentary election. The democratic influence would be guaranteed but the actual decision taken on substantive grounds.
1 The figures from Libération and le Monde don't seem to quite tally but que voulez-vous?
Tunnel vision
Rumors have it that the article in die Welt that we referred to below and the non-denial from state secretary Gerd Ehlers caused quite a furor in the Bundeskanzleramt in Berlin. A press release was apparently issued claiming that the whole thing was a misinterpretation by the opposition and that Germany stands firmly behind the proposal to limit the future EU-budget to 1 % of GNI. (We have not been able to identify this press release). Maybe, but we stand by our general interpretation of the present status of the negotiations.
Yesterday, former Commissioner Franz Fischler said in a Seminar in Vienna that it was meaningless to discuss numbers until the guiding principles for the long-term EU budget had been agreed on. What should be the task of the Union and what of the national governments? What exactly do we mean by a fair sharing of the financial burden? Very wise words, no doubt, but unfortunately there are no signs of such a discussion going on. On the contrary, there is considerable political pressure to come to an agreement on the long-term financial framework during the Luxembourg Presidency which ends by June 30 this year.
As we explained below, this can only be achieved by horse-trading. An example of the attempts by the Commission to split up the front of budget refuseniks was recently demonstrated in Austria during the visit by Commissioner Hübner and President Barroso. Ms. Hübner drove home the point that the reduction of the budget to 1 % of the GNI would mean cuts in the funds for rural development, an area where Austria has been particularly successful in obtaining EU-funds. According to an article in der Standard, 10 % of those funds have so far gone to Austria although its rural population only amounts to around 2 % of Europe's. Furthermore: another area where budget cuts would have to be made is under the heading 1 a, objective 3 in the Commissions proposal: Promoting sustainable transport, energy and EU networks. An estimate, also presented by der Standard, shows that the Commission's budget proposal would allow for a 50 % EU financing of the new tunnel at the Brenner out of a total cost of 9 billion Euro. The reduction of the EU budget to 1 % of the GNI would not allow for this cofinancing and only lower Austria's payments to Brussels by 2 billions of Euro.
We do not know the details of these estimates so for the time being we have to classify them as what is known here as a Milchmädchenrechnung. But it illustrates well the tactics that are being used in the negotiations.
In a desperate attempt to bring in a Northern Perspective into this, we note that the heading 1 a is also the only area where Sweden gets more money from Brussels than it pays into the budget. This is due to successful competition for funds by Swedish companies, universities, research institutions and institutions. It may not be the best area to make cuts.
