Twenty-six European leaders turned up for a dinner in Brussels this evening with one burning question to discuss: Whether or not to change the European Union treaties to accommodate Germany’s demands for a new permanent bailout fund?
But one European leader burst in and insisted on talking about something else. That would be David Cameron, the UK prime minister, and his obsession was the European budget. Read more
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
Viviane Reding was the star of the European Commission’s surprisingly blunt condemnation of France for its treatment of the Roma. And rightfully so. The prepared statement read by the famously helmet-haired commissioner on Wednesday forcefully punctuated weeks of caution and dissembling by the commission. More than one Brussels correspondent expressed shock at the outbreak of bonafide news at the typically somnolent midday briefing. Read more
Christian Wulff, Germany’s new federal president, has not been idle. He had barely wiped his feet on the doormat in Schloss Bellevue, his splendid new Berlin residence, before setting off on a foreign trip.
While his job is without power, it carries lots of prestige. Indeed, the role is more about symbolism than substance. But the symbolism matters.
His first stop on Wednesday was in Strasbourg to meet Jerzy Buzek, European Parliament president. Second stop was Paris, for a chat with Nicolas Sarkozy at the Elysée palace. And third stop, on Thursday, was Brussels, where he had lined up Herman Van Rompuy, president of the European Council, José Manuel Barroso, president of the European Commission, and Anders Fogh Rasmussen, Nato secretary-general.
It was all about pouring oil on troubled waters, to be sure. Germany’s relationship to the European Union has seldom caused so much anxiety amongst its neighbours, since Berlin started to bang the drum with a vengeance about the need for fiscal discipline – first in Greece, and now in the rest of the eurozone. Read more
There is a gulf separating Germany from France on how to cure the eurozone’s ills, and it does not bode well.
Germany identifies the eurozone’s chief problems as excessive budget deficits, weak fiscal rules and a general culture of over-spending in the region’s weaker countries. The remedy, say the Germans, lies in austerity measures, tougher punishments for rule-breakers and better housekeeping. Germany is so sure that it has got the answer right that it is introducing a €80bn programme of tax increases and spending cuts – not because the German economy desperately needs such measures, but because the government in Berlin wants to set an example to other eurozone states.
France knows the eurozone has a fiscal problem, but it disagrees with the German view that immediate and drastic austerity measures are essential. The French contend that, if budget hawks win the day, Europe’s fragile economic recovery will fade away and there may even be another recession (as Paul Krugman notes, an example often cited in support of this argument is the “Roosevelt recession” of 1937, when President Franklin D. Roosevelt, having just about dragged the US economy out of the Great Depression, inadvertently caused another economic downturn with a premature attempt to balance the budget). 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.
Two weeks ago European leaders decided to postpone an upcoming summit of something called the Union for the Mediterranean. It is safe to say that very few people in the Mediterranean noticed or cared.
The story of the UfM is a classic tale of what passes for foreign policy in today’s European Union. The organisation was the brainchild of President Nicolas Sarkozy of France, who wanted to strengthen relations between the EU’s southern member-states – such as France, Italy and Spain – and their North African and Arab neighbours across the sea. It was not a bad idea in principle. But it aroused the suspicions of Germany and other northern EU countries, which insisted in the name of European unity that all EU member-states should belong to the UfM. Read more
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
Nothing illustrates the sensitivity of the European Union’s relationship with Israel better than the statement which EU foreign ministers issued on Monday complaining about the use of forged European passports in last month’s killing of Mahmoud al-Mabhouh, the Hamas commander, in Dubai. The statement contained several sentences that were masterpieces of waffle, such as the following: “The EU … believes that its passports remain among the most secure in the world, fully meeting all international standards.”
The statement was, however, remarkable chiefly for its reluctance to spell out that the EU holds Israel responsible for the flagrant misuse of identity documents belonging to European citizens. It could hardly be otherwise, of course. There is insufficient evidence at this stage to state with certainty that Israel’s agents used the false passports and killed Mabhouh. Instead, it was left to a couple of EU foreign ministers to conduct some finger-wagging in one-on-one meetings with Avigdor Lieberman, their combative Israeli counterpart, who just happened to be in Brussels on Monday. Read more
Since the Fifth Republic’s birth in 1958, France has had six presidents – and only one, François Mitterrand (1981-1995), was a man of the left. Now certain elements of the French left see a great opportunity to capture the presidency again by selecting Dominique Strauss-Kahn, the International Monetary Fund’s director-general, as their candidate to run against Nicolas Sarkozy in the 2012 election.
I saw Strauss-Kahn, or “DSK”, in action in October 1998 when, as France’s finance minister, he travelled to Saarbrücken, capital of the tiny German state of Saarland, for a meeting with Oskar Lafontaine, his left-wing German opposite number. Back then, the big economic story in Europe was what many people saw as an effort by Lafontaine and Strauss-Kahn to push for politically managed exchange rates and thus, supposedly, to curb the European Central Bank’s independence on the eve of the euro’s introduction. The fuss over this was quite out of proportion to what the two ministers had in mind, let alone what they were capable of delivering. Lafontaine didn’t last even one year as German finance minister. Read more