Monthly Archives: October 2010

Peter Spiegel

Day one of the EU heads of government summit may have broken up after 1 a.m., but European officials were already up early Friday to conduct their regular post-mortem of the drawn out fight from the night before.

At a breakfast with reporters, Jose Manuel Barroso, president of the European Commission, the EU’s executive branch, said that too much attention had been paid to the dust-up over the demand by German chancellor Angela Merkel to reopen the EU’s treaties in order to insert new language aimed at preventing another Greek-style crisis.

Mr Barroso noted that the EU leaders unanimously endorsed a set of new budget rules – the product of months of sometimes contentious negotiations – that would enable the EU to fine member states who regularly violate eurozone debt norms. Read more

Twenty-six European leaders turned up for a dinner in Brussels this evening with one burning question to discuss: Whether or not to change the European Union treaties to accommodate Germany’s demands for a new permanent bailout fund?

But one European leader burst in and insisted on talking about something else. That would be David Cameron, the UK prime minister, and his obsession was the European budget. Read more

Peter Spiegel

Multiple leaders at Thursday’s summit expressed their deep misgivings about engaging in another round of treaty changes, with several insisting that the German goal of setting up a new, permanent bail-out system could be achieved within the existing treaties.

If the idea gets any traction within the closed-door meetings, it could be due to an unexpected proposal from an unexpected place: Finland.

According to a so-called “non-paper” – diplo-speak for an unofficial proposal – that has been circulated by the Finnish finance ministry and obtained by the Financial Times, much of what German chancellor Angela Merkel wants through treaty change could be achieved by simply attaching new rules to national bond issuances. Read more

It is still two hours before the summit, but it seems that one of Germany’s principal initiatives is already sinking badly: a drive to suspend EU voting rights from countries that violate budget rules.

Jose Manuel Barroso, the European commission president, broke his relative silence of recent days to condemn an idea championed by Angela Merkel, the German chancellor.

“If treaty change is to reduce the rights of member states on voting, I find it unacceptable and frankly speaking it is not realistic,” said Mr Barroso, who has thus far remained quiet on the key questions that will dominate this summit. “It is incompatible with the idea of limited treaty change and it will never be accepted by the unanimity of member states.” Read more

There was a distinctively northern European feel to the Liberal pre-summit gathering in downtown Brussels, with the leaders of Finland, Denmark, Estonia and Ireland welcoming new Dutch premier Mark Rutte to the fold.

Despite the intimate atmosphere – this is by far the smallest of the three leadership pow-wows – there was no sense that the Liberal Five will toe a common line going come dinner time. Read more

Peter Spiegel

The opening feature of any EU summit is the gathering of heads of government at their partisan caucuses. These days none is more important than the European People’s Party, the right-wing EU coalition that includes Angela Merkel, Nicolas Sarkozy and Silvio Berlusconi. Read more

Peter Spiegel

The call by Angela Merkel to reopen the European Union’s treaties in a major address to the Bundestag is already generating reaction from heads of government in other member states as they begin descending on Brussels for a two-day summit.

Ms Merkel worked the phones the day before the summit, calling several of her counterparts in an attempt to shore up support – a sign of just how precarious her position is and her need to come out of the summit with a victory following intense criticism at home for her political deal-making to win over reluctant allies. Read more

Viviane Reding seems to revel in picking a fight with France ahead of summit meetings in Brussels.

In comments to several European newspapers in the run-up to Thursday’s heads-of-government meeting, the EU’s justice commissioner went after French President Nicolas Sarkozy and his German counterpart, Chancellor Angela Merkel, for a deal they struck last week on proposed eurozone budget regulations in characteristically unvarnished language.

“The decisions of the European Union are not made in Deauville,” she said, referring to the swanky French seaside resort where Merkel and Sarkozy made their deal, according to an account in Belgian daily Le Soir. The pact, she said, was nothing less than “a Franco-German diktat”. Read more

Peter Spiegel

George Soros thinks that all of Europe is becoming fiscally Germanic, and he’s not happy about it.

The famed financier and philanthropist was in Brussels Tuesday to discuss the plight of Europe’s Roma population, which made headlines last month when France began deporting large groups of Roma back to Eastern Europe.

But he took some time during a lunch with a small group of journalists to criticise Germany’s insistence on fiscal austerity, which he believes is being imposed continent-wide through Berlin’s influence over the EU’s economic institutions.

“They have emerged as the hegemon of euro-land, who set the policy for euro-land; they write the operating instructions for the new common fiscal policy,” Mr Soros said. “Europe, because of the fiscal rectitude imposed by Germany, faces I think a prolonged period of economic stagnation, conceivably decline.” Read more

Peter Spiegel

After a day’s worth of summiting in Luxembourg, we seem no closer to learning just how serious a dust-up might occur at this week’s European summit over the issue of reopening the EU’s treaties as part of an effort to prevent another Greek-style crisis.

The German government has pushed it to the top of the agenda, but officials from countries large and small – as well as, privately, José Manuel Barroso, president of the European Commission – have voiced their distaste for another full-blown treaty overhaul, which has proven arduous and politically debilitating in the recent past.

“After 10 tortuous years we managed to chain the fierce beast and lock it in a chest for at least another decade,” said one European diplomat from a country opposed to the move. “Who guarantees us that the wretched animal will not leap out and devour us all?”

According to diplomats, the key issue appears to be how hard Germany will push their demands. Read more

Peter Spiegel

When the E.U.’s heads of government meet later this week at one of their regular summits, it will mark the first time since narrowly saving Greece that they will take up a controversial set of rules aimed at preventing a future Greece-style implosion.

But nearly lost in the debate over the new rules - which has focused on how and when to fine countries who fail to get their debt levels down – are provisions in the proposed eurozone regulations that could have a much more politically explosive impact on national governments.

For the first time, the EU is proposing it should have a say on how to make individual economies more competitive. And if Brussels isn’t listened to? Fines could be imposed. Read more

The European parliament and its acolytes – assistants, journalists, and so on – are back in Strasbourg this week for the much-derided monthly plenary session. A couple of interesting votes, including one on the very subject of Strasbourg, are worth keeping an eye on.

One interesting feature of the European Parliament that my colleague Joshua Chaffin covered last year is that its members are now far more likely to vote along party lines than along national ones.

This is perhaps a bit surprising when you consider that a British MEP representing the centre-left Labour party is likely to be far closer on the political spectrum to a British centre-right Conservative than to a Socialist from almost any continental country. In many policy areas, the gaps in political thought between countries is often wider than between parties within each country.

But, to the delight of Europhiles, a study by VoteWatch, an independent group, showed that MEPs now vote with their parties in nine out of ten votes – compared to five or six in past decades.

It’s a useful way for Brussels to illustrate that the European Union is more than a series of clashes, rows and bust-ups between member states – that a true European polity is discussing European issues unaffected by narrow national interests. Read more

The FT’s “Saving the Euro” investigation will culminate in a live “hashtag” chat on Twitter between 1pm and 2pm (GMT) this afternoon with the author, Tony Barber, former Brussels bureau chief. Read more

“Europe will be forged in crises, and will be the sum of the solutions adopted for those crises.”

Penned more than three decades ago, Jean Monnet’s insight on the European Union, which the French statesman was so instrumental in founding, has certainly stood the test of time. Read more

In Europe’s capitals they still talk of the evening when George Papandreou, Greek prime minister, confessed to his fellow leaders that his nation was corrupt. “He was very impressive and very honest. He basically said: ‘My country is a corrupt country from A to Z,’” recalls one European Union policymaker present at the dinner in Brussels on December 10 2009 where Mr Papandreou bared Athens’ economic soul.

On a spring evening, a group of the world’s most powerful policymakers sat down to dinner at 501 Pennsylvania Avenue. The building, in the heart of the US government district, is a blend of modernist and neo-classical styles termed playful by some architecture critics. But the subject under discussion was deadly earnest: how to save Europe’s monetary union.

Peter Spiegel

Timothy Geithner, the US treasury secretary, made headlines Wednesday after he warned of the potential for a currency war – or, to be more precise, a “competitive non-appreciation” – if China did not allow the renminbi to appreciate more freely.

What was less noticed in his address was some equally tough talk for Europe, where he seems to see a danger of continent-wide austerity measures stifling the nascent global economic rebound. Read more

There was a common reaction that Chinese premiere Wen Jiabao and his entourage inspired as they swept through Brussels this week: Impressive. That word was uttered repeatedly by European business leaders, policymakers and diplomats on the sidelines of an EU-China Summit. At times, it seemed the Chinese were in motion while the natives stood still, watching with awe and envy as someone else’s national ascent played out.

Things were very different a decade ago, when an Asian banking crisis was raging. Now, in the midst of its own crisis, Europe is the one short of cash, humbly thanking Mr Wen for his promise to buy government bonds issued by Greece and other debt-plagued governments. That gesture has made it particularly awkward for European leaders to press demands that Beijing revalue its currency. Read more

Peter Spiegel

Three days of summitry between EU and Asian leaders wraps up Wednesday in Brussels with the only “deliverable” – diplo-speak for a concrete achievement – of the entire event: the signing of a free trade agreement between the EU and South Korea.

But frequently, these international talkfests are more interesting for the atmospherics than any deals that are struck, and this week the mood has been more telling than most. Read more

Peter Spiegel

One of the unwritten rules of a financial panic seems to be that the more severe a crisis is, the more scripted and repetitive public officials become.  Read more