Monthly Archives: October 2008

As the clock ticks towards the Czech Republic’s takeover of the European Union’s six-month rotating presidency on January 1, there are signs of distinct nervousness in Brussels and some EU capitals over how Prague will cope with the challenge.

For most EU governments, the global financial crisis, economic recession, the fate of the Lisbon institutional reform treaty and relations with Russia will be the top priorities for the first half of next year. And they are not sure the Czechs see things quite the same way or, if they do, will be able to provide effective leadership at a time when the government of Prime Minister Mirek Topolanek has scarcely looked weaker.

The Czechs will be the second former communist country to assume the EU presidency. Slovenia’s spell in the hot seat in the first half of this year was generally considered successful. But some EU diplomats make the point that the Slovenes did not have to confront the full-scale emergency that erupted in the world financial system or handle the Russian invasion of Georgia in August. What a relief that France, an experienced and powerful member-state, was at the controls during these crises – so the argument runs. Read more

To get an idea of how the global financial crisis is testing the stability of the eurozone, look at the ever-widening spread between the yields on German and Italian 10-year government bonds: 25.8 basis points one year ago, 69.6 one month ago, 72.3 one week ago and 95.6 today.

With Greece the situation is even more acute: the spread between German and Greek bonds shot above 100 basis points last week for the first time since Greece adopted the euro in 2001. It is now close to 120 basis points. Portuguese, Spanish, Belgian and even Austrian and Dutch yield spreads are also wider than at any time since Europe’s monetary union started in 1999. Read more

By common consent, Nicolas Sarkozy has had, for the most part, a good financial crisis. But he slipped up this week when he suggested European Union member-states should create their own sovereign wealth funds to invest in European companies and stop foreigners from buying up “strategic assets” on the cheap.

This proposal was flawed on so many counts that it is hard to know where to begin. But here we go. First, there is no evidence that non-European sovereign wealth funds are trying to seize control of strategic or even non-strategic European assets, least of all by means of hostile takeovers. Dark hints to the contrary do nothing but harm the EU’s relations with the countries where the funds are based. In fact, they risk deterring the funds from making benign investments in Europe. Read more

What do Albania, the Marshall Islands, the Federated States of Micronesia, Nauru and Palau have in common with the United States? They were the only countries that supported the US when the United Nations General Assembly voted this month on a Serbian-drafted resolution to seek an opinion from the International Court of Justice on the legality of Kosovo’s declaration of independence in February.

Even though the court’s ruling will have no legal force, Serbia interpreted the UN vote as a diplomatic triumph. Seventy-seven countries, including Serbia itself, backed the resolution. Not one of Washington’s Nato allies supported the US. Seventy-four countries abstained. Read more

It was quite a turn-out at Jörg Haider’s memorial service in Klagenfurt on Saturday. About 25,000 people were there. Among them was Muammer Gaddafi’s son, an old friend of the late Austrian politician. So, too, was Alfred Gusenbauer, Austria’s Social Democratic chancellor, whose presence reminded us all – if we needed reminding – that Haider, to Austrians, was never the polecat that he was to the rest of the world.

Much ink has been spilt on explanations of Haider’s popularity among Austrians. Perhaps it was because his mother and father, like many Austrians before 1945, were devoted Nazis. Perhaps it was because Haider likened the expulsion of the Sudeten Germans from Czechoslovakia after the Second World War to the Nazi extermination of Europe’s Jews. Read more

It was one of the worst kept secrets in Brussels, and now it’s out in the open. On the sidelines of the European Union’s summit in Brussels, centre-right EU political leaders have informally nominated José Manuel Barroso of Portugal to stay in office as European Commission president for a second five-year term.

With the support of President Nicolas Sarkozy of France and German chancellor Angela Merkel, as well as that of Europe’s consummate political fixer, Prime Minister Jean-Claude Juncker of Luxembourg, it was never likely that Barroso would face much opposition on the centre-right. Read more

Surprises galore at the European Union summit that opened in Brussels on Wednesday. The heroes of the hour are turning out to be Gordon Brown and Nicolas Sarkozy. Angela Merkel and Silvio Berlusconi are still recovering from poor performances in the run-up to the summit. And as for the leaders of Poland … the least said, the better.

First, Brown. Eyes popped out when Brown showed up in Brussels, hours before the summit started, for a conversation with European Commission president José Manuel Barroso and an appearance before the media. Could this really be the same UK prime minister who, less than a year ago, deliberately arrived late for an EU summit so that he wouldn’t be seen signing the bloc’s Lisbon treaty at the same time as the other leaders? Read more

As the Asian financial crisis deepened in 1997, the then Japanese prime minister Ryutaro Hashimoto made the memorable remark: “Japan cannot save Asia, it can only save itself.”

Until Sunday, it looked as if most of the European Union’s national leaders were falling over themselves to take a leaf out of Hashimoto’s book. Read more

It was seven months ago that Javier Solana, the European Union’s foreign policy chief, warned about the risks to international stability from the intensifying competition among countries in the Arctic region. Today the European Parliament drew attention to the issue again by passing a resolution that called on EU policymakers to push for an international treaty for the protection of the Arctic.

Legislators adopted the resolution by 597 votes to 23 with 41 abstentions, demonstrating that it had overwhelming cross-party support. Soon the European Commission will publish a long-awaited report that for the first time will put flesh on the bones of the EU’s Arctic policy. Read more

Russia’s invasion and de facto partition of Georgia in August sparked uproar across Europe, or so it is said. In reality, many European Union countries were soon itching to restore relations with the Kremlin to normal as soon as was decently possible. And on a second issue critical to Europe’s security – the future of Bosnia-Herzegovina – many EU capitals have more in common with Moscow than is comfortable for them to admit.

Thirteen years after the US-brokered Dayton agreement ended the 1992-95 civil war, Bosnia is at peace but barely qualifies as a functioning state. Its two halves, the Muslim-Croat federation and the Serb Republic, co-operate as little as possible. Its two main nationalities, the Bosnian Muslims and Bosnian Serbs, are as alienated from each other as ever, a point illustrated by last weekend’s local elections across the country. Read more

It is only human to search for a ray of light in the European Union’s ever-darkening financial landscape. Could it take the form of an unexpected boost to the cause of EU political and economic integration?

One such optimist, a genial and perceptive diplomat who has immersed himself in EU affairs for the past 30 years, suggested to me the other day that it often takes a crisis to inject real momentum into what he and others in Brussels like to call “the European project”.  For example, the 1992 crisis in the European exchange mechanism appeared to deal a serious blow to the goal of creating a single European currency. But the reaction was spirited. Only seven years later, the euro was up and running. Read more

For the politicians, diplomats, European Union officials, lawyers, lobbyists, journalists and other folk who have to fly in and out of Brussels a lot in their course of their duties, Brussels Airlines is a fairly popular choice.

Created in 2006 from the merger of Virgin Express and Sabena, the ill-fated Belgian national carrier, Brussels Airlines is a busy, friendly, no-frills company that in my experience does a good job getting you from A to B in Europe without a great deal of fuss. Read more

The times are so alarming that sometimes all you can do is laugh. Consider Fortis, the large Belgian-Dutch bank and insurance company, which this week became Europe’s biggest casualty so far of the world financial turmoil.

Only a few months ago it launched a new advertising campaign.  It was a nice catchy slogan, too. ”Here today. Where tomorrow?” Read more