As Tony Blair’s chances of becoming the European Union’s first full-time president fade, so the chances go up that David Miliband will be the EU’s next foreign policy supremo.  This is the picture emerging on the second day of the EU summit in Brussels.

The killer blow to Blair’s prospects was delivered by Angela Merkel, Germany’s chancellor, who let it be known that she would prefer the EU’s first permanent president to come from one of the EU’s smaller states.  By definition, this rules out Blair.

German officials say she has nothing against Blair personally.  But in this matter Merkel’s voice is perhaps the most important among all the 27 leaders present.  Germany is not putting forward a candidate either for the presidency or for the foreign policy post.  It is, however, the EU’s biggest country and its paymaster.  Merkel is therefore the honest broker, the swing vote, the kingmaker - however you want to put it.

Meanwhile, Blair has lost the support of José Sócrates, Portugal’s prime minister, and of José Luis Rodríguez Zapatero, Spain’s prime minister.  Both are socialists and both think Europe’s centre-left should focus not on getting the presidency but the foreign policy job.

That is why the summit chatter about Miliband is getting ever more excited.  Looking around Europe, one does not see too many foreign policy stars on the centre-left side of the political firmament.  And check out this editorial in Thursday’s Le Monde on Miliband.  It describes him as “the young and brilliant foreign secretary” and praises his commitment to the EU, contrasting it with the views of William Hague, the Tory shadow foreign secretary, whom it accuses of “an almost pathological europhobia”.

With Le Monde on your side, how can you lose?

As European Union leaders gather for their two-day summit in Brussels, the word is that the British government’s effort to have Tony Blair selected as the EU’s first full-time president is running into trouble.

Prime Minister Gordon Brown has just finished a round of afternoon discussions with other European socialist leaders, trying to persuade them that Blair deserves the job.  The talks did not go well.

Martin Schulz, chairman of the European Parliament’s socialist group, made it plain that he and many other Continental socialists didn’t want the EU presidency to go to a Briton.  The reason?  The UK is semi-detached from Europe, not in the euro area, not in the Schengen zone permitting border-free travel around the EU, etc, etc.

Moreover, the socialists think they have a better chance of getting in one of their own people as the EU’s next foreign policy high representative than as the first full-time president.  With 20 or so of the EU’s 27 governments controlled by the centre-right, they reason, national leaders are bound to pick someone from their own political family for the EU presidency.

Of course, you could argue that some centre-right leaders - Italy’s Silvio Berlusconi comes to mind - are perfectly happy to see Blair in the job.

But maybe not in France and Germany.  French President Nicolas Sarkozy and German Chancellor Angel Merkel met for dinner in Paris on Wednesday night, and word is reaching reporters in Brussels that the two leaders were lukewarm about Blair’s candidacy.  If true, that would come close to polishing him off - or, rather, it would enable him to say he had never been a candidate in the first place.

The fuss over who will be the European Union’s first full-time president is obscuring the less sexy but potentially more important question of who will get the two or three most powerful jobs in the next European Commission.  A good many governments would prefer to see one of their nationals in a truly influential economic policymaking role in the Commission than occupying the EU presidency, which may turn out to be a more hollow job than once foreseen.

Commission president José Manuel Barroso says he will not nominate his new team until EU leaders have chosen their new head of foreign policy, a post that entitles its holder to a Commission seat.  Any country wanting a big economic portfolio at the Commission will therefore steer clear of putting forward a candidacy for the foreign policy job, because there is only one Commission seat for each nation.

Does this explain why the German government has proposed Günther Oettinger, prime minister of the state of Baden-Württemberg, as its next commissioner?  He doesn’t have obvious foreign policy credentials, so  the German idea is almost certainly to slot him into a top economic job.

Three portfolios in the outgoing Commission - competition commissioner, internal market commissioner and trade commissioner - stand out from the rest, because they bestow real power on their occupants.  They are the policy areas where Europe is most effective at speaking with one voice and exerting worldwide influence.  It would make sense for Germany, which was disappointed by the performance of its outgoing representative, Günter Verheugen, as industry commissioner, to want one of these jobs.

If the internal market portfolio is rejigged, perhaps in order to put a stronger focus on Europe’s response to the financial crisis, it is easy to imagine a scramble among the bigger EU countries to be put in charge of financial regulation.  France is said to be keen on getting something meaty like this (Michel Barnier, or perhaps Christine Lagarde?).  Of course, this would rule out the foreign policy position for a Frenchman - but Paris, better than most national capitals, knows which jobs in Brussels contain the beef and which the onions.

What about the UK?  The intriguing point here is that it would be extremely simple for Prime Minister Gordon Brown to quash the rumours that David Miliband, his foreign secretary, is manoeuvring to be the EU’s next foreign policy supremo.  All Brown would need to do is to announce that Catherine Ashton, the British EU trade commissioner, was being renominated to Barroso’s team.  Or Brown could name someone else.  Either way, it would instantly rule out Miliband as the head of EU foreign policy.

But Brown hasn’t done that.   It is anyone’s guess why.  But one explanation is that, with Tony Blair’s undeclared EU presidential bid far from certain of success, Brown needs other cards to play.  If Blair is the British government’s queen of hearts, Miliband is, you might say, the knave of spades.

There can be few presidential campaigns that have kicked off with the declaration “I am not a dwarf”.  But this is what Le Monde quotes Jean-Claude Juncker today as saying in the interview in which Luxembourg’s prime minister reveals he would consider being a candidate for the European Union’s presidency “if the call came”.

I have interviewed Juncker and seen him in action more than a few times over the years, and I can confirm that he is not a dwarf - though I have heard other disparaging terms applied to him that need not concern us here.  What most interests me is the enormous gulf in perceptions of Juncker’s potential candidacy between the UK and certain mainland European countries.

In UK government circles, Juncker is seen as a non-starter for two reasons.  First, the president’s job will be to represent the EU on the world stage, especially - according to one view - when sudden crises flare up, such as the August 2008 war between Russia and Georgia.  During that conflict, President Nicolas Sarkozy of France represented the EU as the holder of the bloc’s rotating presidency, and even he - one of the EU’s true big hitters - found his negotiations with the Russians extremely tough going.  Juncker, as the leader of the EU’s 26th biggest country (population 500,000 out of a EU total of 500m), would in the British view just not be taken seriously enough as the EU’s voice in such a crisis.

Secondly, Luxembourg represents a country with a profound commitment to deep European integration, something that is anathema to the British.  It is the same objection that caused the UK to reject the candidacy of Guy Verhoftstadt, the former Belgian premier, for the European Commission presidency in 2004.

On the Continent, especially in some of the EU’s western European member-states and in certain smaller countries, Juncker is seen as an entirely credible candidate.  Members of the German Bundestag and foreign policy establishment admire him, though it is open to question whether that view is shared by Chancellor Angela Merkel.  In the end, she is the only person in Berlin whose opinion matters, since she will make Germany’s choice.

As was pointed out by Le Monde’s interviewer, Juncker appears to have fallen in Sarkozy’s estimation over the past year because of the Luxembourger’s alleged inability to rise to the occasion when the global financial crisis struck Europe.  Accurate or not, this observation prompted a smooth reply from Juncker on Sarkozy’s brilliance as the EU’s president from July to December 2008: ”Europe has never been led with such perspicacity as under the French presidency.”

I feel pretty sure that such compliments won’t ever make Sarkozy support Juncker as the EU’s first full-time president, since the French head of state’s own six months in charge of the EU gave a good idea of the kind of dynamic leadership that he thinks Europe needs.

But that probably won’t upset Juncker, since he is a canny politician whose instincts surely told him long ago that he would never get the job and that the most he could hope for would be to sabotage Tony Blair’s candidacy.

Ask a minister in a European Union government what post their country hopes to get in the next European Commission, and the response is the same every time - something important to do with the economy.  Well, you can’t blame people for not hurrying to step into the shoes of Leonard Orban, the Romanian commissioner for multilingualism.

On the other hand, there aren’t enough top economic jobs for Commission president José Manuel Barroso to satisfy everyone.  Truth to tell, the Commission looks too big with 27 members.  But that’s the way it is, and that’s the way it will stay under the EU’s Lisbon treaty.  A guaranteed seat on the Commission seems a simple, visible way of making a country’s citizens feel connected to the EU.

The main four economic portfolios in Barroso’s outgoing Commission have been - in no particular order - competition, the internal market, trade, and economic and monetary affairs.  These have been occupied by the Netherlands, Ireland, Britain and Spain respectively.  By contrast, France has held two lesser posts (first transport, then justice, freedom and security), and Germany has dropped almost completely out of sight in the post of enterprise and industry.

As Barroso puts together his new team, France and Germany are in the hunt for really big jobs and feel no doubt that they deserve them because of their relatively diminished status in the outgoing Commission.  The French and Germans want to play a much more direct role in shaping the EU’s economic and financial policies as the EU struggles to emerge from recession, rewrites its rules on financial regulation and defends its industries in world markets.  France is said to desire the internal market job on the Commission, and Germany would like something equally prominent.

All this is causing some nervousness in Britain and a few like-minded countries that the next Commission will be less free market-oriented than its predecessor.  In response I would make two points.  First, this is the spirit of the age - you can expect nothing less after the recent near-meltdown of the western world’s financial system and the associated regulatory failures.

But secondly, it just does not follow that to give a top economic dossier to France or Germany means that the Commission will be wrenched in the direction of some manically illiberal étatisme and fiendishly pro-Volkswagen industrial policy.  To take one excellent example, Pascal Lamy, the Frenchman who served as trade commissioner from 1999 to 2004, was a robust defender of free trade and now is head of the World Trade Organisation.  The same would be true if the next French commissioner were someone like Christine Lagarde, who at present is President Nicolas Sarkozy’s finance minister (she is still a possible choice, some think, even though it looks as if Sarkozy is going for Michel Barnier).

EU commissioners, at their best, are like US Supreme Court justices.  When a president picks a judge to sit on America’s highest court, everyone’s first thought is, “Here we go, a blatant political appointment designed to push the Court in a certain ideological direction”.  Then, more often than not, the nominee causes a surprise by putting the court’s interests first and acting independently.  So it can be at the Commission, where the institutional culture of independence from political pressure is stronger than many on the outside assume.

Every now and then, I’m asked in Brussels whether the opposition British Conservative party’s hostility to the European Union is related to the fact that so many of its top people - including David Cameron, likely to be the UK’s next prime minister - went to Eton.  The theory is that they’re so snooty and cut off from the lives of ordinary Britons that they’ve lost all sense of what’s in the national interest.

Well, it’s always tempting to have a rant about privilege.  But in this case, the verdict on Eton is “not proven”.

Eton is perhaps the world’s most famous elite private school, founded in 1440 under King Henry VI.  Located near the town of Slough, it is sometimes mocked as ”Slough Comp” (in other words, Slough Comprehensive, like your average school in Britain’s struggling state-run education system).

Eton is notorious for a variety of savage and peculiar customs, such as the brutal bullying of children (now stopped) and something called the Wall Game, in which a goal has not been scored since 1909 (still going strong).

Eton has produced 18 British prime ministers, some brilliant (Sir Robert Walpole, William Gladstone, Lord Salisbury), some average (George Canning, the Duke of Wellington) and some mediocre (Sir Anthony Eden, Sir Alec Douglas-Home).  Abhisit Vejjajiva, Thailand’s prime minister, was educated at Eton.

So why do I consider the case against Eton “not proven”?  In the first place, history shows that not every British statesman who went to Eton was anti-European - or even liked the school.  Take Lord Salisbury, who was prime minister for 13 years between 1885 and 1902.  Born Robert Cecil, Salisbury was an astute manager of Britain’s relationship with the European powers.  And he absolutely loathed Eton, especially, as his biographer Andrew Roberts writes, “after Troughton major with ten pints of beer inside him had burnt Cecil’s mouth with a candle so badly that he could not speak for the rest of the evening”.

In the second place, hostility to the EU is, quite simply, found at all levels of the British social ladder.  I once lived in Kent on a street where most people had never been to a university, let alone a school like Eton.  They were as rabid a bunch of anti-Europeans as any British people I’ve ever known.  What’s more, they all voted Tory - and I am quite sure they will all vote Tory in next year’s UK election.

Victories in referendums rarely come as big as this.  With full results in from more than half Ireland’s constituencies, the pro-Lisbon treaty camp is ahead by 66.8 to 33.2 per cent.  What’s more, the turnout is high - almost 59 per cent, compared with 53 per cent when Irish voters rejected the European Union’s Lisbon treaty in June 2008.

No wonder Irish premier Brian Cowen looks like the cat that’s been served the cream (when he and his party are annihilated in the next Irish parliamentary election, he can always say he did the noble thing on Lisbon before perishing).  And no wonder Irish big business is pleased, too.  They were very visible on the Yes side during this campaign and they needed a convincing result to justify the money and effort.

But I wonder what David Cameron, the UK Conservative party leader who is expected to win office as prime minister in about nine months’ time, makes of the result?  Officially, the Tories loathe Lisbon and are committed to destroying it if all 27 EU countries have not ratified it by the time Cameron comes to power.  Unofficially, the Conservatives - or, at least, the more level-headed among them - may be rather relieved by the Irish result.

Because when they take office, they will inherit the after-effects of a harsh recession and one of the worst disasters ever to strike the British public finances.  They will face numerous other difficulties as well - not least, a war in Afghanistan that isn’t going well.

Surely the last thing the Conservatives want is a big row with their European allies over a treaty on EU institutional reform that, at heart, the British people do not give a fig about?  Better to accept the Lisbon treaty, put in behind them and get on with the things that will really matter once Cameron is in Downing Street.

According to Brian Cowen, Ireland’s premier, a No result in Friday’s referendum on the European Union’s Lisbon treaty would raise the prospect of a “two-speed Europe”, with some countries forging ahead with closer political and economic integration and others staying outside.  But isn’t a two-speed Europe the dog that is hauled out of its kennel every time there’s a EU institutional crisis but which, in the end, never barks?

After Irish voters rejected the Lisbon treaty in June 2008, a number of politicians were quick to assert that a two-speed Europe was the only way to keep the European “project” on the road.  Jean-Claude Juncker, Luxembourg’s prime minister, who has lived through more EU crises than most of us have had quetsch plum tarts, mused in public that perhaps it was time for a “Club of the Few” to go ahead on their own. Continue reading "Two-speed Europe is the dog that doesn’t bark"