Angela Merkel

Peter Spiegel

Gerhard Schröder’s unexpected re-emergence as a voice for European fiscal integration may or may not change minds in increasingly eurosceptic Germany. But in our half-hour interview, the former chancellor made a pretty heart-felt case that the country’s leadership should be pressing ahead with pro-EU economic policies, even if they are unpopular.

Given the limited space we have in the daily newspaper, we thought Brussels Blog readers might be interested in a fuller account of his views on the issue. As we noted, Schröder was careful not to directly attack his successor, Angela Merkel, for her recent handling of the crisis – something done last month by Helmut Kohl, who unlike Schröder is a member of Merkel’s own political party.

But he did take a more subtle dig. He made the case that politicians need to push through unpopular policies if they believe in them – and then noted he paid the price for reforms in German labour and social benefit policies, collectively known as Agenda 2010, which are now credited with leading to an economic turnaround. Read more

Peter Spiegel

Merkel and Sarkozy at their post-summit news conference Tuesday evening in Paris

The letter Nicolas Sarkozy and Angela Merkel sent yesterday to the president of the European Council, Herman Van Rompuy, contains a lot of ideas that have been discussed previously in Brussels and not gone very far, raising questions as to how much of the new Franco-German agenda can actually be implemented.

But reading between the lines of the letter, one theme that has gone almost unnoticed is the seeming sidelining of the institution that is supposed to be at the centre of European integration: the European Commission, the EU’s executive branch headed by José Manuel Barroso.

Suggesting that Van Rompuy head regular summits of eurozone heads of state as “the cornerstone of the enhanced economic governance of the euro area” is only part of the seemingly anti-Commission tenor of the plan. Read more

Peter Spiegel

In today’s paper, my Berlin-based colleagues Quentin Peel and Gerrit Wiesman note that it’s been a bad week for the eurozone’s most high-profile centre-right leaders: Germany’s Angela Merkel and France’s Nicolas Sarkozy both saw their parties trounced in regional elections, and Italy’s Silvio Berlusconi was back in court.

But what remains unclear is whether the traditional centre-left can capitalise on the faltering conservatives. If recent evidence is any indication, it’s not a clear-cut trade-off at all. Indeed, in eurozone countries where governments have either recently fallen or are likely to do so soon – Ireland, Portugal and Finland – centre-right parties are ascendant. Read more

Beleaguered Japanese officials are already grappling with a humanitarian crisis wrought by a biblical earthquake and tsunami, and the prospect of apocalyptic meltdowns at a pair of stricken nuclear reactors. Add to their list of woes one European commissioner.

That would be Gunther Oettinger, the energy commissioner, whose ill-judged remarks about the crisis on Wednesday have helped to make a bad situation worse. Read more

Peter Spiegel

In this morning’s paper, we have a scoop on the contents of the draft conclusions for today’s European summit, which were circulated to heads of government by Herman Van Rompuy, the European Council president, ahead of the meeting.

As is our practice here at the Brussels Blog, we thought we’d give our readers a deeper dive into the document itself by posting its contents, with some explanatory annotations. We’re just posting the segments on the eurozone economy; there are several pages on energy and innovation, which is the nominal main subject of the summit.

The section on the debt crisis is included as an addendum at the end of the conclusions and entitled “Statement by the Heads of State or Government of the Euro Area and the EU Institutions”. Be forewarned that this could change over lunch, when leaders debate its contents: Read more

Peter Spiegel

Here at the Brussels blog, we’re keeping a close eye on the run-up to next Friday’s rare one-day summit of European Union heads of government. And nothing is occupying more of our attention than whether leaders will actually tackle the ongoing eurozone crisis at the conclave.

One of the events that had been closely monitored by the tea-leaf readers was Tuesday night’s private dinner outside Berlin between the two main antagonists in the debate, José Manuel Barroso, president of the European Commission, and Angela Merkel, the German chancellor.

According to people we have talked to, however, there was little meeting of the minds. Even though the dinner lasted for well over three hours – and almost all of it was occupied by discussions of economic policy – there is still no agreement on whether to put reforms touted by Barroso, including a revamp of the EU’s €440bn bail-out fund, on next week’s agenda. 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

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

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

Greece has got a pat on the back in its first post-bailout report from the European Commission, the ECB and the IMF. “The programme is off to a very strong start,” they said in Athens. So that should be a green light for the next €9bn tranche of the total €110bn rescue package to be paid out next month.

But there is a fly in the ointment. Plucky little Slovakia, a eurozone member state that knows all about tough austerity measures, is refusing to sign up for its contribution to the rescue plan.

In spite of fierce pressure from Brussels, the new government in Bratislava is adamant that it would be wrong to pay its hard-earned taxpayers’ money to another eurozone member that has “consistently carried out irresponsible fiscal policy.” It is prepared to back the European Financial Stability Facility – the €750bn standby rescue package set up to stop contagion from the Greek crisis – but not the original Greek bailout. Read more

Tony Barber

Reforming the management of economic policy, primarily in the eurozone but also in the European Union as a whole, is without question one of Europe’s highest priorities.  Few steps would do more to raise the EU’s credibility with the US, China and the rest of the world than concerted action to improve European economic performance and make the euro area function more efficiently as a unit.  Much of this comes under the heading of “economic governance”. But the difficulty is that it is not always easy to figure out which Europeans are in charge of the process.

On Monday Herman Van Rompuy, the EU’s full-time president, chaired the latest meeting of a task force on economic governance that he was chosen last March to lead.  The task force, consisting largely of EU finance ministers, came up with various sensible ideas on tightening sanctions (financial and non-financial) on countries that break European fiscal rules.  Task force members also want to strengthen the monitoring of macroeconomic imbalances, such as the gap between large current account surpluses in Germany and deficits in southern Europe. Read more

As the EU prepares for its summit at the end of the week, the FT’s senior foreign affairs columnist Gideon Rachman chairs a debate with Mats Persson of Open Europe and Charles Grant of the Centre for European Economic Reform. They discuss the tensions between France and Germany over the southern European members’ debt crisis, and the call for greater budget scrutiny, which the UK is questioning.

Tony Barber

The European Union is often derided for policy confusion and speaking with a multitude of voices – but sometimes it’s not the EU’s fault, it’s the fault of one of the member-states.  Take the idea of setting up a European Monetary Fund.  This emerged as a serious possibility for the first time when Wolfgang Schäuble, Germany’s finance minister, offered support for it in an interview last weekend with Welt am Sonntag.

Within a couple of days, however, Germany’s two most important central bankers – Axel Weber, the Bundesbank president, and Jürgen Stark, an executive board member of the European Central Bank – had distanced themselves from the idea.  Even more confusingly, Chancellor Angela Merkel chipped in with the remark that it wouldn’t be possible to set up a European Monetary Fund without changes to the EU’s governing treaty.  As she well knows, after the agonising experiences first with the EU’s failed constitutional treaty and then with the Lisbon treaty (which finally came into force in December), there is next to no appetite for such changes among the EU’s 27 governments. Read more

Tony Barber

The memories came flooding back when I heard last weekend that Oskar Lafontaine, the leftwing German political leader, was withdrawing from national politics.  Lafontaine is the sort of public figure that lazy journalists often call “firebrand” (Ukraine’s Yulia Tymoshenko, though from the opposite end of the political spectrum, is another).

I first came across Lafontaine in November 1990, just after capitalist West Germany had taken over communist East Germany – a more accurate way of putting it, in Lafontaine’s opinion, than the weaselly term “reunification”.  He was the Social Democratic party’s candidate for chancellor in the first parliamentary elections in the newly united Germany, and he was holding a campaign rally in a sports hall in east Berlin. Read more

Tony Barber

The sun is shining in Brussels and the sky has an unseasonably blue, cloudless, late-November-in-Rome quality as European Union leaders make their way here for the summit of summits - the event where they will choose the EU’s first full-time president and new foreign policy chief.  I wonder if the weather will be so fine when the leaders finally drag themselves away from the negotiating table after what is shaping up to be a night of relentless hard bargaining.

By general consent, the frontrunner is Herman Van Rompuy, the amiable, haiku-writing Belgian prime minister.  Even a speech he gave in 2004 that reveals him to be an implacable opponent of Turkey’s entry into the EU (Turkey has been an official candidate for the past four years) doesn’t seem to be doing Van Rompuy any harm.  Well, why should it?  It fits in perfectly with the views of French President Nicolas Sarkozy and German Chancellor Angela Merkel. Read more

Tony Barber

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. Read more

Tony Barber

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. Read more

Tony Barber

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. Read more

Tony Barber

Even before he was elected as president of France in 2007, Nicolas Sarkozy made it crystal-clear that he didn’t want Turkey to join the European Union - ever.  Now concerns are growing in Brussels that Sarkozy is contemplating a formal Franco-German initiative next year to offer Turkey a “privileged partnership” instead of, as now, the long-term prospect of full EU membership.

The idea of a “privileged partnership” has been around for a good few years.  Sarkozy likes it, and so does Germany’s ruling Christian Democratic party.  It also appeals to Angela Merkel, the CDU chancellor.  However, Merkel has up to now taken a nuanced approach, recognising that Germany, along with other EU countries, recognised Turkey as an official candidate for membership in 1999.  A responsible country cannot just wriggle out of agreements made in good faith, Merkel believes. Read more