Monthly Archives: November 2010

The clash over next year’s EU budget has widely been viewed as a contest between the austere and the profligate. The end result, after a final round of negotiations collapsed in the wee hours of the night, is that the forces of austerity, led by UK prime minister David Cameron and his Dutch and Danish allies, prevailed over a spendthrift European parliament.

But there is another – often overlooked – element to the debate that animated the member states’ unexpectedly stubborn stance: a desire to punish a Parliament that has grown increasingly assertive – some say grasping – since the Lisbon treaty came into force in December.

“There’s a feeling that they’re just going to keep pushing and pushing for more power. So it’s better to confront them now,” one diplomat explained. Read more

“Plus ça change, plus c’est la meme chose,” the French adage goes. It might as well have been coined for the arrival of the new government announced late on Sunday. The shake-up that Nicolas Sarkozy first mooted over the summer has turned into a far more limited reshuffling of the lower orders.

The most significant change for Brussels is the one that didn’t happen: finance minister Christine Lagarde will stay put. At one point expected to move to Foreign affairs, the well-regarded former lawyer now looks likely to remain in her role until the presidential elections in spring 2012.

Her departure during the latest eurozone wobble would undoubtedly have raised questions about a change of strategy in Paris. The effect would have been compounded by the fact her opposite number in Germany, Wolfgang Schäuble, only recently came back in action after suffering health problems. Read more

The collapse in Irish and Portuguese bond prices last week triggered another round of frantic weekend meetings and emergency phone calls among European policymakers and central bankers as they sought ways to restore market calm. Yet to some observers, those efforts were ironic since the turmoil was seemingly just what Germany, the EU’s biggest and most powerful member, had ordered up.

“Isn’t this exactly what they want?” one diplomat asked. Read more

When world leaders wrap up their G-20 talks in Seoul on Friday, the European and American contingent will have less than a week to sleep in their own beds before they head off again to another round of summitting, back-to-back NATO and EU-US gatherings in Lisbon next week.

Although there is lots of substance on the agenda – Afghanistan, missile defence, global economic stagnation – the atmospherics of the events will also be closely watched, particularly since President Barack Obama skipped out on May’s EU-US summit, causing much hand-wringing in Brussels and other European capitals.

U.S. officials are acutely aware of the narrative developing on this side of the ocean since the cancelled Madrid summit: that Mr Obama, despite coming into office amidst a surge of European popularity, is now seen as neglecting his transatlantic allies and showering attention instead on leaders elsewhere in the world. This week, those U.S. officials are fanning out to combat that narrative. Read more

The European Union’s 27 member states may have agreed to reopen the bloc’s governing treaties to set up a new bailout system for any future Greece-like debt implosions, but just what that system will look like is expected to be the next great debate of the ongoing euro crisis.

As our Fankfurt correspondent Ralph Atkins reported, Wolfgang Schauble, the German finance minister, has thrown out a general outline. But the first significant stab at getting to the nuts and bolts was unveiled Tuesday morning by a group of economists that includes a former general counsel and a former deputy director of the International Monetary Fund.

The proposal, published by the Brussels-based think tank Bruegel, is almost as interesting for its account of the history of trying to set up such permanent bailout systems in the past – almost all failures – than it is on the substance of its policy proscriptions for the future, however. Read more

It’s been a quiet week in Brussels, with much of the city away thanks to a two-day bank holiday and a fall break in the school year. Those who have remained in town continue to debate the fallout of last week’s European summit, where all 27 countries fell in line behind German chancellor Angela Merkel and decided to amend the EU’s treaties to create a new bailout system for potential future Greeces.

Much of the discussion over lunches and in opinion journals has focused on two related questions: Is the decision to follow Ms Merkel into the precarious process of treaty change yet another sign of Germany becoming something of a continental hegemon when it comes to driving Europe’s economic policies? And just how painful will the next round of treaty change be?

Charles Grant, director of the Centre for European Reform, has a nice summary of the debate up on his group’s website, with some telling insights about the mood in France over the recent bluster from Berlin: Read more