Monthly Archives: December 2010

Peter Spiegel

The Brussels Blog is shutting down for the holidays. Thanks to all our readers who have helped make the blog one of the best-read sources for EU and European news on the Internet. We’ve got a lot more planned for the new year, so please check back in January, when we’ll continue to try to bring you a taste of what’s being talked about around town – and throughout the continent.

Peter Spiegel

In today’s paper, fellow Brussels Blogger Stanley Pignal has a nice scoop about a letter France and Germany sent to European Union officials announcing their formal objections to including Bulgaria and Romania in the Schengen area, the visa-free travel zone that most EU members are part of.

Traian Basescu, the Romanian president, has already responded this morning by calling the letter a “discriminatory act against Romania,” and vowing to fight the move.

Because the issue could get even hotter, especially since the incoming Hungarian presidency had made Bulgarian and Romanian Schengen membership such a priority, we thought we should post the letter here, with some annotations of our own. Read more

Peter Spiegel

Monday’s meeting of EU energy ministers marked the last such ministerial conclave of the six-month Belgian presidency, a period that diplomats seem to agree will be remembered as extremely effective – even without a Belgian government in place for the entire span.

As we reported in today’s paper, there is a good amount of trepidation heading into the Hungarian presidency, particularly amid moves by Viktor Orban, the populist prime minister, to consolidate power in the hands of his government, most recently through a much-criticized media law.

Mr Orban himself has been a bit unpredictable. When I spoke with him during the October summit of EU heads of government here, he was his usual colourful self, saying his fellow European leaders were frequently too focused on EU institution-building in response to the economic crisis: Read more

Peter Spiegel

On the second and final day of the EU summit, attention turned briefly away from the ongoing eurozone crisis and onto a letter the British government was circulating to get other member states to agree to freezes in the EU’s budget.

During their post-summit press conference, both Nicolas Sarkozy, the French president, and Angela Merkel, the German chancellor, said they would sign onto the effort, giving David Cameron, the UK prime minister, significant backing.

After breaking the story Thursday night, we have obtained a copy of the letter being circulated and thought we’d post it here. The so-called “financial framework” and “financial perspectives” mentioned is the seven-year budget cycle that begins in 2014. Negotiations over the new multi-year budget are due to begin in mid-2011.

The next multiannual financial framework will come as Member States make extraordinary efforts to clean up public finances. These efforts are intended to bring down public deficits and public debt to a sustainable level in keeping with an enhanced fiscal and macroeconomic monitoring framework.

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One of the more mysterious elements of the summit, which is now wrapping up, is the chatter about some of the EU’s big countries looking to cap community spending for up to a decade, as we reported in today’s paper.

The plan is to keep net EU contributions at the same levels, adjusted for inflation. If you assume the European economy grows by a couple of percentage points a year in real terms, that would mean EU spending falling as a percentage of GDP from roughly 1 per cent today to 0.8 per cent by 2020.

That would amount to stopping the European project dead in its tracks, critics of the letter say. Those critics broadly fall in two categories: Euroenthusiasts and net recipient countries. Read more

Peter Spiegel

During his normal mid-summit breakfast with reporters, José Manuel Barroso, the president of the European Commission, the EU’s executive branch, was in a feisty mood, despite the late session Thursday night.

Barroso gave an overview of the debate over treaty changes and a summary of what he hopes will be a strong statement in support of the euro today.

But his most pointed comments were aimed at reports of a letter being circulated by Britain and other member states attempting to set limits to the seven-year budget framework, which starts in 2014. Read more

Peter Spiegel

We now have a full copy of the conclusions reached by the European heads of government. Not many surprises in there, but I thought I’d post an annotated version below for those interested in EU arcana.

1. The European Council welcomed the report presented by its President following up on its conclusions of 28 and 29 October 2010. It agreed that the Treaty should be amended in order for a permanent mechanism to be established by the Member States of the euro are to safeguard the financial stability of the euro area as a whole (European Stability Mechanism). This mechanism will replace the European Financial Stability Facility (EFSF) and the European Financial Stabilisaton Mechanism (EFSM), which will remain in force until June 2013. As this mechanism is designed to safeguard the financial stability of the euro area as a whole, the European Council agrees that article 122(2) will not be used for such purposes.

The interesting thing here is the last sentence. This is the language David Cameron, the UK prime minister, was seeking to ensure non-euro countries do not get sucked into another bail-out when the new rescue system goes into effect in 2013. Read more

Peter Spiegel

We have just gotten our hands on the new treaty change language agreed to by the EU’s heads of government, and the change from the original language is very minor – meaning that efforts by Germany and the UK to get additional provisions included was successfully fended off. Read more

Peter Spiegel

We have an agreement.

According to a senior European minister, the heads of government have broken for dinner after reaching an agreement on the language for changes to the EU treaty to create a new bail-out system for the eurozone.

We haven’t seen the language yet, but the minister said that it remains just two sentences. Clauses were inserted into both sentences, however, that toughened up the amendment a bit. But the changes fall short of the initial demands made by Germany to make explicit that the new rescue fund could only be used as a last resort. Read more

Peter Spiegel

Leaders have finally arrived at the Justus Lipsius building, headquarters of the European Council, and have begun their deliberations over changes in the EU treaties and next steps in the eurozone crisis.

As we expected this morning, the main point of nervousness is still over how hard Angela Merkel will insist that changes in the treaty include tough language ensuring a the newly-created bail-out system only be used as a last resort.

Merkel seemed to hint that she wouldn’t push too hard – saying at a pre-summit gathering that she wanted only “very limited treaty change” - but officials at the sidelines of the summit said there was still much hand-wringing going into the main event.  Read more

Over at the Liberal Democrats’ huddle, everyone did their best to say as little as possible about the particulars of the EU’s new bailout fund. Read more

Peter Spiegel

Angela Merkel, the German chancellor, was one of the last to arrive at the pre-summit gathering of centre-right leaders outside Brussels, but on the way in, she had some calming words to offer.

Some diplomats had feared Merkel would insist on new language to be included in the otherwise benign treaty amendment scheduled to be debated tonight, making the approval process more complicated.

But she told reporters she is backing “very limited treaty change”, a signal there will likely be little opposition from Berlin. Read more

Peter Spiegel

Out at Belgium’s bucolic National Botanic Gardens, where centre-right leaders are having their pre-summit gathering, a hard, cold rain is keeping most heads of government away from the press. Read more

It is a pre-summit tradition in Brussels for the heads of state to divide up and huddle with their fellow partisan big-wigs for a few hours before the main event. The idea is that they are “coordinating their positions” – although one suspects they are probably trading gossip. 

The big excitement this afternoon will be at the gathering of the centre-right European People’s Party in a suburb outside Brussels. The expected attendees include the European Union’s heaviest heavyweights – German Chancellor Angela Merkel, French President Nicolas Sarkozy, Italian prime minister Silvio Berlusconi and Jose Manuel Barroso, the European commission president, to name a few.

Back in town – and just down the road from the Council building – a handful of Liberal Democrat leaders will congregate, including Ireland’s Brian Cowen, the Netherlands’ Mark Rutte and Finland’s Mari Kiviniemi. 

But one group has called off its pre-summit powwow this time around. That would be the Socialists. A party spokesman said the group had taken the decision because its leaders met just last week at their party conference in Warsaw. Instead, they will make do with a simple pre-summit conference call. Read more

Peter Spiegel

The EU’s final two-day heads of government summit of 2010 starts Thursday and early betting is that it will be much quieter than the last time the 27 leaders assembled in Brussels, a gathering that set off a bond market panic which the continent is still recovering from.

The main event will be Thursday night, when the leaders are expected to sign off on a brief change in the EU’s treaty to allow for the creation of a new financial rescue system to replace the current, temporary €750bn bail-out fund.

There is still some nervousness that Angela Merkel, the German chancellor, may push for additional language in the text to make explicit that the new bail-out system can only be accessed as a “last resort,” or ultima ratio in Latin, the phrase being used by the cognoscenti.

But Merkel did not mention the ultima ratio demand in her list of principles before the Bundestag Wednesday, and there seems to be little appetite among other members to let her bulldoze the new language in – particularly since it could cause more confusion among bond traders, who might wonder what all the other resorts are before the last one. Read more

Monday saw the launch of Brussels Leaks, which pretty much does exactly what you would expect a website with the “-leaks” suffix to do.

Like its illustrious forebear, WikiLeaks, Brussels Leaks wants to bring extreme transparency to the decision-making process, with a focus on the European Union.

It’s a fairly rudimentary set-up by a group of moonlighting Brussels professionals working anonymously and with clearly limited resources. Read more

Peter Spiegel

Among the more revealing EU-related disclosures in the WikiLeaks trove are not about Washington’s view of the European Union, but rather about how members of the EU view each other.

One of the more colourful dispatches that have come out thus far is an April 2004 account of an otherwise dull Brussels evening event in which a US official was seated at a table with the featured speaker: Chris Patten, the high-profile British diplomat who at the time was the EU’s foreign affairs commissioner.

Labeled “Dining with Chris: Random Thoughts from Relex” – relex is Euro-speak for the foreign policy, or “external relations,” portfolio – the cable offers Patten’s vivid views on everything from Romania (a “feral nation”) to then-Russian President Vladimir Putin (when discussing Chechnya, “Putin’s eyes turn to those of a killer”). Read more

Peter Spiegel

One of the most high-profile dust-ups between the US and the European Union since President Barack Obama took office was a White House decision to skip out on a May summit with the EU that was to be held in Madrid during Spain’s turn at the bloc’s rotating presidency.

The decision was seen by many Europeans as a snub, and hurt feelings have persisted for months. The issue was raised anew just last month when Obama finally agreed to an EU summit, this time tacked onto a Nato gathering in Lisbon, with the US continuing to insist that the only reason the Spanish summit was scrapped was because of Obama’s already heavy European travel schedule.

But two cables made public as part of the WikiLeaks dump this week present a more complicated picture of the White House decision-making. They make clear that senior US officials believed that there simply was not enough substance to the agenda to make the meeting worthwhile.

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Peter Spiegel

Among the hundreds of confidential US diplomatic cables disclosed by WikiLeaks thus far, very few have dealt with Washington’s relations with the EU. But occasionally, EU leaders have popped up in summaries of other international events in which they have only tangentially been involved.

The most pointed EU-related revelation to be released thus far comes in a 2008 cable from the American embassy in Moscow following French President Nicolas Sarkozy’s heated September 8 confrontation with Russian Foreign Minister Sergei Lavrov over the Kremlin’s invasion of Georgia.

The US account of the “at times…openly hostile” meeting, where Sarkozy “at one point grabbed FM Lavrov by the lapels and called him a liar in very strong terms,” has been reported widely. Less noticed, however, was Moscow’s reception of José Manuel Barroso, the European Commission president.

In a section labeled secret and “noforn,” meaning it was not to be shown to non-American officials, an unnamed French source retells how “the Russians treated Barroso harshly and condescendingly, and tried to exclude him from many of the sessions.” Read more

We have a live Twitter #hashtag chat with Cynthia O’Murchu, FT reporter, on our EU structural funds special investigation. Read more