Monthly Archives: March 2009

Resourceful Brown makes history with IMF euro/dollar ploy

March 31, 2009 2:51 pm by Tony Barber

They say newspapers are the first draft of history. Here I’m on a mission to prove that blogs are the second draft.

The piece of history I have in mind is the European Union summit of March 19-20, when the bloc’s 27 leaders issued a statement pledging €75bn in new EU contributions to the International Monetary Fund to help fight the global economic crisis. This commitment was duly reported in the Financial Times and other newspapers and was the “first version of history”.

Some of us were struck at the time by the fact that the EU’s financial pledge was denominated in euros, not in US dollars. It looked a little odd because, in the discussions preceding the EU summit, all the talk had been about promising an amount between $75bn and $100bn. No one had suggested calculating the figure in euros rather than dollars.

No one, that is, until the morning of Friday March 20 – and now I can reveal the “second version of history”. For it turns out that it was Gordon Brown, the British prime minister, who proposed announcing fresh EU contributions of €75bn rather than $75bn-$100bn. He did so knowing full well that the euro was strong enough against the dollar for the amount, when converted into dollars, to end up being slightly more than $100bn – which was precisely his intention.

According to one non-British summit participant, Brown’s gambit succeeded brilliantly “because across the whole table there were only three or four other leaders who understood what he was up to”, and they raised no objections.

Ah, well, I haven’t got the bit about the more or less general ignorance of exchange rates among EU leaders verified from other sources. So, for the moment, we’ll have to agree that it sounds good – but doesn’t count as the “third version of history”.

Tags: Britain, Gordon Brown
Posted in EU | Permalink

Swedish EU presidency gears up for the unexpected

March 30, 2009 11:00 am by Tony Barber

When she talks about her government’s forthcoming European Union presidency, Cecilia Malmström, Sweden’s European affairs minister, likes to quote the late John Lennon: “Life is what happens to you while you’re busy making other plans.”

Given the EU’s troubles with its frozen Lisbon reform treaty, it might have been equally apt to cite the lyrics in Lennon’s 1968 song, ‘Revolution’: “You say you’ll change the constitution/ Well, you know/ We all want to change your head.”

As Malmström sees it, political events have a tendency to unfold in ways rather different from your original hopes and plans. And it is how you prepare for the unexpected, says Malmström, that is one of the keys to running a successful EU presidency.

When she was in Brussels the other day sketching a picture of how Sweden would run its six-month presidency, which starts on July 1, she said her government was analysing the lessons from various unexpected incidents involving Europe over recent years. One was how the Czech Republic, the current EU president, had handled January’s Russian-Ukrainian gas dispute, which shut down Europe’s gas imports from Russia, and the simultaneous Israeli assault on Gaza. These crises erupted before the Czechs had time to draw breath in assuming their presidential duties and presented them with a truly severe challenge.

The second incident was the Israeli war against Hezbollah in Lebanon in July and August 2006. Finland held the EU presidency at that time, and Malmström said Swedish experts had consulted their Finnish colleagues to learn from their experiences.

Intriguingly, the third episode she mentioned was Sweden’s handling of the tsunami that struck south-east Asia in December 2004. Thousands of Swedish tourists were in the region on holiday, and more than 500 were killed. The response of the authorities in Stockholm to what was one of the greatest calamities in modern Swedish history was, at first, too slow. “Our system failed the citizens,” Malmström says.

Self-criticism doesn’t, of course, guarantee that a government or its administrators will get it completely right next time. But it is a good quality to have, and one that should stand Sweden in good stead in the second half of this year.

Tags: Sweden
Posted in EU | Permalink

European Parliament: Highlight of the Week (8)

March 27, 2009 10:11 am by Tony Barber

The European Parliament, looking to strengthen institutional ties between the US and the European Union, called this week for the creation of a transatlantic political council to co-ordinate foreign and security policy. The council would be chaired jointly by the US secretary of state and the EU’s high representative for foreign policy and would meet at least every three months.

The parliament also called for the establishment of a transatlantic assembly, linking the EU legislature with the US Congress, which would meet twice a year. It said the EU and US should aim for a unified transatlantic market by 2015.

The report containing these proposals was passed by 503 votes to 51 with 10 abstentions.

Posted in EU Parliament, Foreign policy | Permalink

The galactic wit of space cadet Mirek Topolanek

March 26, 2009 2:27 pm by Tony Barber

When he’s not busy lashing out at American economic policies, the free-falling Czech Prime Minister Mirek Topolanek can always give free rein to the other side of his personality – mordant central European humour. Here’s an example from a press conference last week at a European Union summit in Brussels.

A reporter asked Topolanek, whose government collapsed on Monday and whose country’s EU presidency is turning into a long bad dream, why the six summit participants represented at the press conference were all men, with not a woman in sight. ‘Why, were you expecting Martians?’ the prime minister replied.

This did not go down at all well with women politicians in the European Parliament.

As Zita Gurmai, a Hungarian socialist who sits on the legislature’s committee on women’s rights and gender equality, put it: ‘If Mr Topolanek thinks it is a joke to describe half of Europe’s citizens as Martians, he should give up trying to be funny. It is bad enough that Europe, under his presidency, is not taking any extra actions to help women and men threatened by the recession, but to insult women as well is too much. I hope Mr Topolanek is embarrassed.’

Not much chance of that, one suspects.

Posted in EU | Permalink

Knives are out for a tottering Czech EU presidency

March 25, 2009 11:14 am by Tony Barber

The knives were well and truly out for Czech Prime Minister Mirek Topolanek at the European Parliament this morning. Topolanek, blaming the fall of his government on Tuesday on his domestic Social Democrat opponents, blithely assured legislators in Strasbourg that there would be no impact on the Czech Republic’s presidency of the European Union.

Not surprisingly, this prompted a stern lecture from Martin Schulz, the German head of the parliament’s socialist group. “You are a fighter, but so far you haven’t understood what the task of the EU presidency is,” Schulz told the hapless Czech premier.

Obviously, the Czech government’s collapse won’t cause the EU machinery to grind to a halt, any more than the bureaucracy in an individual EU country stops working when a government loses office. But the Czech crisis will have consequences for the EU, nonetheless.

First, it will shred to pieces the Czech Republic’s ability to project a strong image when representing the EU in foreign policy. Fear not, this will soon become visible in the EU’s relations with Russia, which delights in exposing the EU’s internal contradictions. It will also affect EU policy in the Middle East, where France – the previous holder of the EU’s rotating presidency – made it clear as early as January that it had little regard for Czech diplomatic skills in the region.

Secondly, the Czech crisis will raise yet more questions about the fate of the EU’s Lisbon treaty. Because of domestic political differences, and also because the issue became tied up with the fundamentally separate matter of whether to deploy parts of a US anti-missile defence system, the Czech Republic has repeatedly delayed ratifying the Lisbon treaty. The question now is whether even Irish approval of the treaty in a referendum expected in October will help the prospects of ratification in the Czech Republic. Don’t forget, Czech President Vaclav Klaus, whose signature is needed to pass the treaty, is a vociferous opponent.

Thirdly, the crisis in Prague may disrupt the Czech handling of EU policy issues such as the drive for tighter financial market regulation. In the EU, progress on such matters depends on ministers from the country that holds the EU presidency. They need to be well-organised and capable of leadership. They also need a good instinct for when to strike a compromise among the 27 member-states. It really doesn’t help if they fall from office halfway through their country’s six-month presidency.

Possibly, the damage will be limited if Topolanek and key colleagues such as Finance Minister Miroslav Kalousek are able to continue in office, even on a temporary basis. And one should remember that not everything about the Czech EU presidency has been bad: they have done a good job in speaking out in defence of the single market and against economic nationalism à la française.

But memories of the weak and sometimes gaffe-prone Czech EU presidency (remember the art display put up at the EU’s headquarters, with Bulgaria portrayed as a toilet?) will last for a long time in Brussels and in Europe’s national capitals. These memories will surely reinforce pressure for a stronger, more stable, permanent EU presidency – as foreseen in the Lisbon treaty.

Posted in EU Parliament | Permalink

Brown set to remaster Blair’s 2005 speech to EU parliament

March 23, 2009 10:24 am by Tony Barber

It’s one of the most eagerly awaited events of the European Union’s 2009 political calendar. British Prime Minister Gordon Brown is giving a speech on Tuesday to the European Parliament in Strasbourg, and everyone who’s anyone in Europe wants to be there to hear it.

One reason is that people remember the last time a UK premier addressed the EU legislature. It was Tony Blair in June 2005, and those who were present recall it as one of the finest speeches of his entire political life. Looking at Blair’s speech almost four years later, how well does it hold up?

The first thing worth noting is how different today’s political context is from that of June 2005. Blair delivered his speech against a backdrop of multiple ”crises” in the EU: the rejection by French and Dutch voters of the EU’s proposed constitutional treaty, a split between European supporters and opponents of the US-led war in Iraq, and a sense that Europe was too inward-looking and lacked the self-confidence to meet the challenges of globalisation and economic modernisation. These “crises” were real enough. But the first two, at least, have either faded away (Iraq) or seem niggly rather than momentous (EU treaty change).

On economic modernisation, though, Blair’s words look as relevant as when he spoke them. “Some have suggested I want to abandon Europe’s social model. But tell me: what type of social model is it that has 20m unemployed in Europe, productivity rates falling behind those of the USA; that is allowing more science graduates to be produced by India than by Europe; and that, on any relative index of a modern economy – skills, R&D, patents, IT – is going down, not up?”

Blair was speaking at a time when Britain’s economy and financial markets were going great guns. This permitted him to strike a slightly preachy note. He derided “the idea that Britain is in the grip of some extreme Anglo-Saxon market philosophy”, and boasted that Britain had virtually abolished long-term youth unemployment, regenerated its cities and lifted several million children and pensioners out of poverty and hardship.

If Brown gets preachy on Tuesday, his speech won’t go down well. For Britain today is about to tip into its worst recession since 1945. Its budget deficit is forecast to hit 10 per cent of economic output. Its banking system has just been semi-nationalised. Continental Europe will want to hear Brown’s thoughts on whether the UK’s economic model – held up since the 1980s as a shining example to the rest of Europe - bears any responsibility for these outcomes.

Brown is more than capable of striking the right note in a grand set-piece speech. He did so when addressing a joint session of Congress in Washington on March 4. But if there is one reason why he can count on a good reception in Strasbourg on Tuesday, it’s because his audience knows only too well what may lie round the political corner in Britain – a Conservative party election victory next year, and the emergence of an abrasively anti-EU Tory government.

Tags: Britain, Brown, Tony Blair
Posted in EU Parliament | Permalink

European Parliament: Highlight of the Week (7)

March 20, 2009 11:19 am by Tony Barber

The European Parliament this week launched its promotion campaign for next June’s elections to the legislature. Among the publicity material are postcards asking questions such as “How should we help balance family and career?”, “How much labelling do we need?” and “What should cars run on?”

Tags: Elections 2009
Posted in EU Parliament | Permalink

Floodwaters rise up around the Europeans on Noah’s Ark

March 19, 2009 3:07 pm by Tony Barber

Like the animals that boarded Noah’s Ark, Europe’s leaders are entering their summit conference centre in Brussels today with the world’s economic floodwaters rising around them. According to the Book of Genesis, Noah was almost 600 years old when the rains started. That surely makes him the Old Testament forerunner of Jean-Claude Juncker, Europe’s longest-serving leader. The gaunt-looking Juncker has been prime minister of the Grand Duchy of Luxembourg since 1995 and its finance minister since 1989.

As the leaders climb on board for their two-day European Union summit, it is eerie to hear them, one by one, saying exactly the same thing. “We don’t need to do a new fiscal stimulus… Any room near the lifeboats over there?” “We don’t need another fiscal stimulus… I’ll just squeeze in here by the bilge water.” “Another fiscal stimulus? We don’t need one… Pass me a life jacket, would you?”

The leaders are indignant at people in President Barack Obama’s administration – not the US president himself, it appears – who say Europe isn’t doing enough. Look here, goes the argument, we’ve passed a fiscal stimulus worth €200bn. When you add in the “automatic stabilisers” – unemployment benefits and other social security expenditure triggered by a recession – that takes the total boost to the EU economy to €400bn, or 3.3 per cent of gross domestic product, spread over 2009 and 2010.

Well, over on Mount Ararat stands a Nobel prize-winning economist called Paul Krugman, who totally disagrees. He estimates that the US and EU should each be running stimuluses that peak at 4 per cent of GDP annually – not spread over two years. In reality, he says, the US is “not doing enough to fight the crisis, and Europe is doing a bit less than half as much as the United States”.

I can’t say for sure if Krugman is right. But when I popped into Noah’s Ark just now, I bumped into Paul Taylor, the distinguished Reuters European affairs columnist. He was having a good chuckle about the European argument that the ”automatic stabilisers” provide a healthy boost to the economy. If it were really that simple, he pointed out, Europe might as well sack all its workers – now that would be some stimulus!

Tags: Brussels
Posted in Uncategorized | Permalink

Fiendish Declan Ganley prepares to spoil another EU party

March 18, 2009 9:35 am by Tony Barber

Short of giving him a pair of horns and a forked tail, it’s hard to see how you could make the people who run institutional Europe dislike Declan Ganley more than they do now. Ganley is the British-born, multimillionaire Irish businessman who spoiled the European Union’s party last June by spearheading a successful campaign to persuade Irish voters to reject the EU’s Lisbon treaty. The Irish vote threw the EU into a state of organisational confusion from which it has not recovered to this day.

Now Libertas, Ganley’s political movement, is putting up local candidates across the EU for next June’s European Parliament elections. Ganley himself will stand for the constituency of Ireland North West. It is clear that Libertas will run a highly populist campaign – in one recent statement, it attacked a European Parliament decision to “go ahead with building a €9m gym and pool in Brussels which only MEPs and parliament staff can access… The move to go ahead with it while families across the EU are facing financial hardship shows a complete lack of respect for the people of Europe.”

It’s this sort of populism that makes Ganley’s opponents stick a great big ”anti-European” label on him. But is he really anti-European? I recommend readers of this blog to look at the transcript of a long interview that Ganley recently gave to the online edition of E!Sharp, a magazine that specialises in EU affairs. In this interview, he comes across as more sympathetic to the idea of European integration than his critics allow. This is no British-style Eurosceptic speaking. He pulls no punches, however, in attacking what he sees as the EU’s shortcomings in democracy and accountability.

So how successful will Libertas be in the European Parliament elections? For sure, there is a protest vote out there in some countries that is waiting to be tapped. But it could go to the far right or the far left rather than to Ganley.

In a recent conversation I had with Ganley, I got the sense that he risked putting too much emphasis in his campaign on his anti-Lisbon treaty views, and too little on the bread-and-butter issues of jobs, financial worries and economic recovery that are surely uppermost right now in voters’ minds.

And then, with turnout at European Parliament elections having fallen on every occasion between 1979 and 2004, there is the minor matter of how to get the voters to vote…

Tags: Lisbon Treaty
Posted in EU Parliament | Permalink

A sunny Greek island beckons for Europe’s security planners

March 17, 2009 10:58 am by Tony Barber

Greek Foreign Minister Dora Bakoyannis is a strong believer in the benign powers of European Union diplomacy – and in the seductive qualities of sunny Greek islands. This explains why, as the current chairperson of the Organisation for Security and Co-operation in Europe (OSCE), she is proposing that all 56 OSCE countries send their foreign ministers to a Greek island in July for some serious but informal talks on European security.

“We’d have more than 24 hours of really open talks, without any restrictions,” she told me enthusiastically this morning in Brussels.

It sounds like a winner. Who’d say no to a day or two on a Greek island just before the summer rush?

The OSCE’s origins lie in the detente era of the 1970s, when western countries were interested in securing commitments from the Soviet Union on good international behaviour and observance of human rights. In return, Moscow wanted recognition of Europe’s post-1945 borders and the legitimacy of the communist regimes of eastern Europe. At the time, it was a sensible, practical bargain – and in the longer run, the human rights provisions worked to the advantage of the western democracies.

These days the OSCE deals with an enormous range of issues, from crisis management to protection of minority rights, and it has been caught up in the thick of things in Georgia after the war with Russia in August. One has to wonder what will happen if Bakoyannis’s proposal goes ahead and the Russian and Georgian foreign ministers get separated from the pack and find themselves alone in a taverna on a remote Greek isle.

Bakoyannis got the idea for her proposal from the informal meetings that EU foreign ministers hold twice a year, usually in spring and late summer. At these events, deliberately staged in beautiful settings to create the right mood for a bit of relaxed brainstorming, ministers chew over topics that do not always get a great deal of attention at their regular monthly sessions.

Last September, in the medieval papal French city of Avignon, for example, they had a good think about long-term EU-US relations. In a couple of weeks they’re off to a castle at Hluboká nad Vltavou in the Czech Republic to talk about Afghanistan and the western Balkans.

The point of an informal OSCE meeting would be to try to build on the modest but measurable improvement in the international atmosphere since Barack Obama took over as US president. The OSCE operates by consensus, so it will never take decisions that clash with the interests of Russia or any other member-state. It would be futile to expect a summer gathering on a Greek island to solve Europe’s immediate security problems.

But as Bakoyannis says, “There’s another spirit in the air. The new American administration is reaching out. The Russian Federation is reacting positively to that. We have to build on this momentum.”

Posted in Foreign policy | Permalink