Monthly Archives: January 2010

A potentially decisive moment is approaching in the Cyprus settlement talks that started in September 2008.  Ban Ki-moon, the United Nations secretary-general, is to visit the divided island on Sunday and stay there until Tuesday.  He does not, of course, have the authority to impose a settlement or even seriously to bang heads together.  But what he can do is impress on the Greek Cypriot and Turkish Cypriot leaders that the world is watching them and that a great deal hangs on the outcome of their negotiations.

A sense of urgency hangs over the talks because presidential elections will be held in Turkish Cypriot-controlled northern Cyprus on April 18.  Mehmet Ali Talat, the leftist president who helped revive the effort at reaching a comprehensive settlement more than 16 months ago, looks vulnerable to the challenge of Dervis Eroglu, the nationalist prime minister. Read more

How can Greece dig itself out of crisis?  From the sunny shores of south-eastern Europe, it could do worse than take a look at the windswept, north-western corner of the continent and study what the Irish government is doing.

As I noted last week, Greece, in spite of the disastrous condition of its public finances, has hardly suffered at all so far in terms of the living standards of ordinary citizens.  Gross domestic product is thought to have slipped by a mere 1.1 per cent last year.  By contrast, Ireland has experienced a vicious recession: between the fourth quarter of 2007 and the second quarter of 2009, Irish GDP slumped by more than 10 per cent. Read more

Athens invites Beijing to buy bonds (Kerin Hope & Jamil Anderlini, FT)

Lisbon moves to cut rising deficit (Peter Wise, FT) Read more

The memories came flooding back when I heard last weekend that Oskar Lafontaine, the leftwing German political leader, was withdrawing from national politics.  Lafontaine is the sort of public figure that lazy journalists often call “firebrand” (Ukraine’s Yulia Tymoshenko, though from the opposite end of the political spectrum, is another).

I first came across Lafontaine in November 1990, just after capitalist West Germany had taken over communist East Germany – a more accurate way of putting it, in Lafontaine’s opinion, than the weaselly term “reunification”.  He was the Social Democratic party’s candidate for chancellor in the first parliamentary elections in the newly united Germany, and he was holding a campaign rally in a sports hall in east Berlin. Read more

There is a need to clear up some misconceptions about how Greece, or some other fiscal miscreant in the 16-nation eurozone, would be rescued by its partners in the event that it was unable to refinance its debts.

Quite a few commentators seem to think eurozone governments would find it hard to sidestep the ban on bail-outs specified in European Union treaty law.  The European Central Bank, the European Commission and certain EU governments, not least that of Greece itself, have contributed to the confusion by insisting in public that a rescue is undesirable and unnecessary (while quietly planning for precisely this contingency). Read more

Re-emerging Europe (Lex, FT)

Manufacturing interventions seen futile (Chris Bryant, FT) Read more

Are they just teething problems?  Or is something more serious at stake?  One way or another, the first signs are emerging that the European Union’s new foreign policy structures, established under the Lisbon treaty that came into force last month, are capable of producing just as much discord and disharmony as the old arrangements.

Let’s take the EU’s response to the Haiti earthquake.  Baroness Catherine Ashton, the EU’s foreign affairs supremo, convened an emergency meeting on January 18 at which the 27-nation bloc quickly and efficiently agreed a generous aid package for Haiti worth over 400 million euros.  At a news conference after the meeting, she was asked if she would be visiting Haiti and, if not, why not.  She replied that she wouldn’t be going, because the United Nations had requested her and other foreign dignitaries to stay away in order not to disrupt the emergency aid effort.  However, Karel De Gucht, the EU’s outgoing humanitarian aid commissioner, would travel to Haiti.  A perfectly sensible response. Read more

Blow to eurozone recovery hopes (Ralph Atkins, FT)

Europe and an inscrutable China (Charlemagne, The Economist) Read more

Bulgaria’s embattled nominee bows out (Tony Barber and Joshua Chaffin, FT)

FT rating of EU commissioners-designate (FT bureau, FT) Read more

There are some who say the forced withdrawal of Rumiana Jeleva as Bulgaria’s candidate for the European Commission on Tuesday was a blow to Commission president José Manuel Barroso.  After all, didn’t Barroso make public a letter in support of Jeleva as late as last Friday, only two working days before she crashed in flames?

I disagree.  The truth is, Barroso found himself in a very delicate situation and needed to extract himself from it without humiliating Jeleva, annoying the Bulgarian government and giving more excuses for the European Parliament to delay confirming his new Commission in office.  By and large, Barroso has achieved these three objectives.  He has handled the whole thing rather well. Read more

The European Union should be pleased with the outcome of the first round of Ukraine’s presidential election.  Not because the politician who received the most votes was former premier Viktor Yanukovich, the most pro-Russian of the main candidates.  Rather, because the election for the most part met the very high standards of democracy, legality and fairness that the EU had demanded of Ukraine to sustain the process of bringing the country closer to the 27-nation bloc.

It was a genuine contest among a variety of distinctive candidates, and the second, knock-out round on February 7 between Yanukovich and Yulia Tymoshenko, the incumbent prime minister, will be a genuine contest, too.  Compare this with the tainted presidential election of November 2004, which precipitated the Orange Revolution that propelled Viktor Yushchenko to power.  In terms of democracy and the political maturity of society, Ukraine has progressed a long way over the past five years. Read more

Greece’s fiscal emergency is a most mystifying crisis.  At one level, it is the most serious test of the eurozone’s unity since the launch of the euro in 1999.  Unless correctly handled, the problem with Greece’s public finances could shake the foundations of Europe’s monetary union.

At another level, however, Greece itself seems to be getting off remarkably lightly.  Germany suffered a 5 per cent slump in gross domestic product last year; Greece is expected to have suffered a fall of about 1.1 per cent.  Spain has a 19 per cent unemployment rate; Greece’s rate is only 9 per cent.  The Irish government is imposing extreme austerity measures on its citizens to protect Ireland’s eurozone membership; Greece’s government is, so far, doing nothing of the sort.  No wonder Greece’s 15 eurozone partners, the European Commission and the European Central Bank are furious with the political classes in Athens. Read more

Say what you will about Rumiana Jeleva, Bulgaria’s nominee for the new European Commission, but she is one hell of a dancer.  A Youtube clip shows her doing the rumba in what appears to be Bulgaria’s equivalent of Strictly Come Dancing – and there’s no question, it would be a severe injustice if she didn’t get 10 out of 10.

It would be less of an injustice, however, if the European Parliament refused to support her appointment as the EU commissioner for humanitarian aid and crisis response.  This is partly because, in her parliamentary hearing on Tuesday, she did not convincingly answer some of the many questions that MEPs asked her about her financial affairs.  She denied allegations of impropriety, but she seemed remarkably hazy about the details of her involvement with a consultancy that specialised in privatisation matters. Read more

Barnier faces grilling at European Parliament (Nikki Tait, FT)

Trade war fears raised on carbon border tax (Joshua Chaffin and Tony Barber, FT) Read more

As with many things involving the European Parliament, there is an air of unreality about this week’s confirmation hearings of the nominees to the next European Commission.  It would be entirely mistaken to think that the process bears much resemblance to the kind of rigorous hearings that presidential appointees are obliged to undergo in the US Senate.  To judge from the proceedings so far in Brussels, the questions asked in the European Parliament’s committees are far less probing, and the nominees are able to get away with answers that are at best platitudinous, at worst utterly incoherent.

There are some honourable exceptions.  The best performance has been that of Belgium’s Karel De Gucht, the EU trade commissioner-designate, who wasn’t afraid to speak frankly about his opposition to a carbon border tax, a policy favoured among others by French President Nicolas Sarkozy.  Equally authoritative were Spain’s Joaquín Almunia, who will run the important competition portfolio, and Finland’s Olli Rehn, responsible for economic and monetary affairs.  This trio looks set to be the powerhouse of the next Commission, along with France’s Michel Barnier, the internal market commissioner-designate. Read more

How many days can a Spanish kite stay in the air?  About four, to judge from the speed with which Germany and the UK have shot down a proposal from José Luis Rodríguez Zapatero, Spain’s prime minister, to introduce binding mechanisms to enforce economic reform in the European Union.

The short lifespan of Zapatero’s brainwave, which he unveiled last Thursday in Madrid, is hardly surprising.  Not that it’s an especially bad idea – in principle.  Deep in their hearts, most European policymakers know the EU would benefit from closer fiscal and economic policy co-ordination, particularly in the eurozone.  They also know that the lesson from the EU’s ill-starred Lisbon agenda, which notoriously set out – and failed - to turn the bloc into the world’s most competitive economy by 2010, is that it was all too easy for governments to pay lip service to reform without doing much about it in practice (except for the virtuous Nordic countries). Read more

European Commission nominees face grilling (Tony Barber, FT)

The Iceland debate: to pay or not to pay (FT special feature) Read more

Tuesday’s murder of Bobi Tsankov, a young Bulgarian journalist who wrote about his country’s over-mighty gangsters, took place in broad daylight in a crowded street in the centre of Sofia.  As a statement about the power of organised crime in Bulgaria, it could hardly have been more explicit.

Moreover, it could hardly have come at a worse time for Prime Minister Boyko Borissov’s government.  Borissov came to power in July facing the arduous task of regaining the trust of Bulgaria’s European Union partners.  Some of them bitterly regretted their decision to let Bulgaria join the EU in 2007 before it had properly confronted the scourge of organised crime.  A 2008 European Commission report on Bulgaria’s progress in tackling corruption and organised crime was, in my view, the most negative ever produced about a EU member-state. Read more

Here is the latest video from the FT’s View from Europe series:

Herman Van Rompuy, the European Union’s first full-time president, is getting down to business.  Hitting the ground running?  Not exactly.  But in various subtle ways the mild-mannered, philosophically inclined former Belgian premier is already making an impact on the way the EU goes about its work.

On Monday, his first official working day, he announced that he was summoning all 27 EU heads of government to Brussels on February 11 for an unscheduled summit on economic policy.  This statement didn’t attract much attention, because plans for such a summit were being laid even before Christmas.  But the announcement was significant nonetheless.  Chairing summits is one of the few duties that the EU’s Lisbon treaty specifically reserves to the full-time president.  By calling an unscheduled summit, Van Rompuy was signalling to the world that he intends to use his presidential authority to the full. Read more