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"

Since February 1999, when the Organisation for Economic Co-operation and Development’s anti-bribery convention came into force - with the aim of reducing bribery of foreign officials in international business deals - the US has brought 103 cases, Germany more than 40, France 19 and the UK just one.  So says “Global Corruption Report 2009: Corruption and the Private Sector”, a study published on Wednesday by Transparency International, the anti-corruption watchdog.

From a British point of view, the report makes uncomfortable reading.  “UK companies still have a long way to go to increase their awareness and adopt robust anti-bribery compliance programmes,” it says.

It adds that, in the light of the 2006 al-Yamamah affair,  when the authorities cited national security reasons to shut down a corruption investigation into a multibillion-pound British arms deal with Saudi Arabia, ”it is essential for the government to improve its enforcement of the [OECD] convention and bring more cases to court.  The government and companies need to raise their game.  Otherwise the United Kingdom will be perceived as a country that is not serious about fighting international corruption.”

Of course, other nations come in for a hammering in the report, too.  Take the so-called BRIC countries, supposedly jumping from strength to strength as the western world drowns in recession and debt.  Everyone from President Dmitry Medvedev to the man in the Moscow metro knows about Russia’s corruption disease, but it is particularly interesting to read what Transparency International says about the club’s other three members: “Firms from India, China and Brazil are regarded by their peers as among the most corrupt when doing business abroad.”

Has international business corruption increased since the global financial crisis exploded?  The report doesn’t really answer this important question.  But it does point to “the hazardous implications of corporate strategies that seek to exploit weak regulation, taxation and disclosure standards in some pockets of the global banking system”.  It also highlights “financial offshore structures whose lack of transparency, regulatory oversight and co-operation facilitate capital flight and tax evasion, while hindering the recovery of public assets stolen by corrupt rulers”.

Better regulation and more effective enforcement of existing rules are obviously the answer.  But let’s not forget what Tacitus, the great Roman senator and historian, said: “It’s the most corrupt state that has the most laws.”

When does No mean Yes - or maybe?  I’m not venturing here into the treacherous territory of date rape law, but rather thinking of what politicians say when they’re asked if they want to be the European Union’s first permanent president.

Take Felipe González, Spain’s socialist prime minister from 1982 to 1996.  Rumours have swirled around Brussels for months that González is interested in the job and that President Nicolas Sarkozy of France would be pleased to see him get it.  González’s fellow Spaniard, Javier Solana, who is the EU’s foreign policy high representative, is on record as saying last June that he believes the ex-premier “has the energy and the capacity for the job”.

So I feel it’s my duty to report that John Thornhill, a Financial Times colleague, took González to one side at a conference in Italy last weekend and put the $64,000 question to him.  Here is what the great man replied: “Some people are talking about myself, and I have said that I will not be a candidate.  This means that I have to be extremely careful about talking about other candidates, whether it is to support them or not.  Some people could criticise me for making my views public when I’m not going to be a candidate.”

González’s reply looks superficially like a No.  In fact, to say that you’re not a candidate isn’t the same thing at all as saying that you will never accept the job under any circumstances.

As it happens, I think there is one very good reason why González would be right to think twice before taking on this particular job.  The permanent EU presidency is set to come into operation in January, if Irish voters approve the EU’s Lisbon reform treaty in a referendum next month and if Václav Klaus and Lech Kaczynski, the recalcitrant Czech and Polish presidents, can be persuaded to sign the document.

But the establishment of the permanent presidency will not mean the abolition of the existing EU system, under which every country holds the union’s rotating presidency for six months at a time.  All EU member-states love their six months in the spotlight, and many have no intention of stepping to one side in order to let the EU’s first permanent president grab all the attention.

And guess what?  The country that will hold the rotating presidency from January 1 to June 30, 2010 - just when the permanent presidency is to be launched - is none other than Spain.  The Spanish government has absolutely no intention of meekly vanishing into the shadows to let the EU’s first permanent president steal the show.

Perhaps national pride would induce a more accommodating attitude from Spain, if González were picked for the job.  But I wouldn’t bet on it - and from the sound of things, nor would Felipe.

What’s the connection between martial arts and European financial market regulation?  Answers in Bulgarian, please.  Because the most colourful member of the newly elected European Parliament’s powerful economic and monetary affairs committee is surely Slavi Binev, a Bulgarian MEP. 

Binev is a Taekwondo champion whose parliamentary website describes him, with little exaggeration, as “the most recognisable figure in the history of martial arts in Bulgaria”.  Perhaps I should add that he is also a wealthy man who belongs to Bulgaria’s ultra-nationalist Ataka party and who runs a company specialising in nightclubs, construction and finance.  He knows, shall we say, how to look after himself.

The committee on which Binev sits is extremely important.  Along with national governments and the European Commission, it will shape all the financial services legislation that the European Union intends to adopt in the wake of the global financial crisis.  People in the City of London are nervous that the EU will damage their business by clumsy or aggressive over-regulation.  But the truth is that, if they want to stop that happening, they must roll up their sleeves and get to work with Binev and his fellow committee members (who include Rachida Dati, France’s former justice minister, and Eva Joly, the Norwegian-born French anti-corruption magistrate).

A close look at the committee’s make-up reveals some interesting details.  It has 48 full members and 46 substitute members.  Among the full members, a key role will be played by MEPs from Germany, the UK, France and Spain, who account for exactly half their number (eight Germans, six Brits, six French and four Spaniards).  Sixteen other countries are represented on the committee.

But these days MEPs tend to vote more along party lines than nationality, so it is also useful to note that this committee contains 17 moderate centre-right members, 13 socialists, five centrist liberals and a sprinkling of Greens, far leftists, Eurosceptics and other oddballs - including Binev.  As in previous legislatures, the three mainstream political groups will dominate proceedings.

Crucially, the committee chairmanship will be held by Sharon Bowles, a British liberal.  It is possibly the most important committee post in the entire European Parliament.  With the right input from governments, the Commission and the financial services industry itself, her influence may go a long way to ensuring that the EU does nothing foolish, or too foolish, in the field of financial market regulation.

The great thing about blogging is that you learn something new almost every day.  This morning, while preparing a blog on the European Union’s foreign policy, I have learnt the French expression avaler des couleuvres, which translates literally as “to swallow grass snakes” and means “to believe anything you’re told”.

What a magnificent idiom!  I came across it in the widely followed Coulisses de Bruxelles blog of Jean Quatremer, the Brussels correspondent of the French daily Libération.  Quatremer was writing about Javier Solana’s decision to give up his job as the EU’s foreign policy high representative, a post he has held since 1999.

The sentence which contains the metaphorical grass snakes is particularly scathing about the Spanish-born Solana:  ”His ability to believe anything he’s told, and his mumbo-jumbo muttered and whispered in a mixture of Spanish, English and French, contribute to his capacity to give the impression to all his interlocutors that he agrees wholeheartedly with them…”

In defence of Solana, you could say that swallowing grass snakes and muttering mumbo-jumbo will be two of the most essential qualifications for anyone applying to replace him.  The post of EU foreign policy chief will acquire a bit more importance if the Lisbon treaty comes into force.  But it will never be powerful enough to remove European foreign policy from the control of the largest member-states - France, Germany and the UK.  Quatremer acknowledges this:  “[Solana's] genius has been never to displease member-states anxious to preserve their sovereignty…”

Lacking real power, Solana has been forced all too frequently to swallow snakes and mutter mumbo-jumbo.  But if he had attempted to spit out the snakes and talk in plain, robust language, the Chinese, Iranians and Russians, among others, would have soon found him out.

That said, Solana gives the impression of being an intelligent politician who has thought deeply about the changing nature of power in the modern world.  In a speech in London last Friday, he put it very well:  “The core dilemma of globalisation is that problems are global, but resources and legitimacy remain at the national level…  In this new world, a large part of politics can only be conducted at a continental scale.  For us in Europe, that means through the European Union…  It really is that simple: either Europe works together or we become strategically irrelevant.”

Strategically irrelevant.  That is a phrase all Europeans should reflect on.  Solana’s successor may have to put up with a mouth full of snakes, but if he can cut out the mumbo-jumbo and express himself as strikingly as that, he will be doing us all a favour.

The last time that a dispute between Madrid and Brussels seized the international spotlight was in 1568 - and boy, was it big.  That was when the Spanish rulers of the Low Countries sparked the 80-year-long Dutch Revolt by executing Counts Egmont and Horne on the Grand’ Place of what is today the Belgian capital.

This month, another quarrel between Spain and Belgium broke out.  Admittedly, it’s less serious, and for the moment it’s stayed behind closed doors.  But in the interests of transparency, and because the squabble tells you rather a lot about the way the European Union operates, I shall share the details with you.

Karel De Gucht, Belgium’s foreign minister, has written an indignant letter to Miguel Angel Moratinos, his Spanish counterpart, complaining about a stitch-up at an EU operation known as the Union for the Mediterranean.  The UfM is a pet project of French President Nicolas Sarkozy, aimed at reinvigorating relations between the 27-nation EU and its North African and Middle Eastern neighbours.

When they launched the UfM last year, the EU and its neighbours agreed that it should have a co-presidency, with one EU country and one non-EU country sharing the post.  First up were France and Egypt.  No problem there.  But it was never officially spelled out who should represent the EU after France.  Belgium, which will hold the EU’s six-month rotating presidency in the second half of 2010, thought that under EU rules it would be a logical choice.

So, not surprisingly, De Gucht was most unhappy to discover, from a letter that Moratinos had written to his French and Egyptian colleagues, that Spain and France appeared to have reached a private deal without telling anyone else in the EU (or, at least, without telling Belgium).  Under this arrangement, France was to hold the job for two years and then hand over the reins to Spain, which would hold it for the following two years.

No doubt Moratinos thinks Spain is entitled to have the UfM’s co-presidency because it will hold the EU presidency in the first half of 2010.  But for two years?  The polite language of European diplomacy can scarcely hide De Gucht’s displeasure.  “I confess that I was really amazed,” he writes in his letter to Moratinos, arguing that the Franco-Spanish deal violates fundamental EU rules that set out how the bloc must be represented on the world stage.

This incident reveals many things about the EU.  It reveals how trivial squabbles constantly interfere with the efficient conduct of a common EU foreign policy.  It reveals how big EU countries (France and Spain) think they have the right to push around small ones (Belgium).  It reveals an EU obsession with process rather than substance.

And, lastly, it reveals how, all too often, EU governments look like mice fighting over a piece of cheese, while outside Europe the world is full of large, fierce cats.

José Manuel Barroso is all but certain to be reappointed as European Commission president.  But who will get the other plum European Union jobs that will soon be up for grabs?

The most startling suggestion I have heard in recent days - and it came from a high-ranking EU diplomat - is that the EU’s first ever full-time president could be none other than Prime Minister Gordon Brown of the UK.  The thinking here is that, because the job will require its holder to represent the EU on the world stage, it would suit Brown well.  He has oodles of experience and excellent connections at the highest level, starting with President Barack Obama.

Of course, Brown may have other career plans, such as winning the next British general election and stabilising the British economy.  But if for some unimaginable reason these plans didn’t work out, might there be life after political death for him in Brussels?

It has always been accepted that the EU’s first president - who will serve a two-and-a-half-year term, renewable once - must be a sitting or former prime minister.  But beyond that, the EU’s Lisbon treaty fails to say a great deal about what qualities he or she ought to have.  The president will prepare and chair the EU’s regular summits of national leaders, a role which indicates that he or she will have to be a conciliator and a honest broker, not a temperamental or divisive figure.

He or she will also need to have a good working relationship with Barroso.  But the president must not be an obscure, low-profile politico, because then leaders such as Prime Minister Vladimir Putin of Russia will make mincemeat of him or her.  And the Lisbon treaty says nothing about whether the president must come from a eurozone country, rather than a non-euro area state such as the UK.

Tony Blair’s name has been mentioned numerous times in connection with the EU presidency job.  But there has always been the nagging feeling in Brussels that his candidacy would be blocked by a country nursing a grudge against him (such as Belgium).  At the same time, quite a few policymakers recognise that the scale of the security and economic challenges facing the EU is such that the first president needs to be a person of true international stature.

Angela Merkel or Nicolas Sarkozy, the German chancellor and French president, would fit the bill, but neither is remotely interested.  It would be nice to think of an Italian in the job, but something tells me that the EU isn’t about to entrust its fate to Prime Minister Silvio Berlusconi.  That leaves the UK - and the clergyman’s son from Glasgow.

Who were the biggest winners and biggest losers of the European Parliament elections?

Top of the winners’ list are surely Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France.  Merkel’s Christian Democrats destroyed her Social Democrat coalition partners at the polls, and Sarkozy’s UMP party brushed aside the opposition French socialists.  Merkel and Sarkozy will feel vindicated in their approach to the global economic crisis, particularly as regards the need to introduce tougher financial regulation (and to lecture central banks from time to time).

Third place on the winners’ list goes to Prime Minister Donald Tusk of Poland, a moderate centre-right leader who cruised to an easy victory on the back of a resilient economy and practical pro-European policies.  Tusk’s common sense clearly appeals to the Polish electorate more than the cavalry-charging on the world stage of the previous conservative government.

Fourth place goes to Viktor Orban, leader of Hungary’s opposition centre-right Fidesz party, which annihilated the ruling socialists in an election dominated by the national economic debacle.

At the top of the losers’ list is Gordon Brown, the UK’s Labour premier, whose party finished third behind the Conservatives and the anti-EU UK Independence Party.  The disintegration of the Labour government and its seemingly inevitable replacement by a rampantly eurosceptic Tory government is now staring the rest of Europe full in the face.  It’s no exaggeration to say they are horrified.

Second place goes to Frank-Walter Steinmeier, Germany’s SPD foreign minister.  He led his party to a catastrophic defeat and must now be wondering why he agreed to stand for chancellor against the eternally popular Merkel.  Steinmeier looks more than ever like a man who was just not cut out for electoral politics in the first place.

In third place is Brian Cowen, Ireland’s prime minister, whose Fianna Fáil party has held power for 20 of the past 23 years but received an absolute drubbing at the polls because of the banking system disasters and economic collapse of the past 12 months.

The last big loser is the European Parliament itself.  In the 30 years since direct elections to the legislature were introduced, the assembly had never made a more vigorous effort to lift voter turnout.  It didn’t work.  Turnout touched a record low of 43.1 per cent.  And it wasn’t just because of “ungrateful” new member-states such as Slovakia, which has joined the eurozone but could only manage a turnout of 19.6 per cent.  There were record low turnouts everywhere from France, Greece and Italy to new member-states such as Cyprus and Lithuania.

As Martin Schulz, a prominent German socialist, pointed out, it just can’t carry on like this or the parliament’s legitimacy will one day be called into question.