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
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
Well, did he say it or didn’t he? I am referring to President Nicolas Sarkozy of France. According to El País, Spain’s most reputable newspaper, Sarkozy told his fellow eurozone leaders at a May 7 summit that France would “reconsider its situation in the euro” unless they took emergency collective measures to overcome Europe’s sovereign debt crisis. The source? Officials in Spain’s ruling socialist party, quoting remarks purportedly made after the summit by José Luis Rodríguez Zapatero, prime minister.
It would be extraordinary, if true – for two reasons. First, if France were to leave the euro area, European monetary union would have no reason to continue. It would collapse. And that would be like dropping a financial nuclear bomb on Europe. Secondly, it is inconceivable that France would consider it to be in its national interests to take such a drastic step. We are left to conclude that if Sarkozy really did utter these words, it was just a bluff to get Chancellor Angela Merkel of Germany to sign up to the eurozone rescue plan that was ultimately agreed in the early hours of May 10. Read more
With all eyes on Europe’s last-ditch efforts to save the eurozone from collapse, it is hardly surprising that a thoughtful, 46-page report on the European Union’s long-term future has gone almost completely unnoticed. But the study, commissioned by EU heads of state and government in 2007 and published last weekend, is worth taking a look at.
It was written by a group of 12 experts led by Felipe González, the former Spanish premier, and including Mario Monti, the distinguished former EU commissioner, Jorma Ollila, chairman of Finland’s Nokia mobile phone company, and Lech Walesa, the ex-Polish president and hero of the opposition Solidarity movement in communist times. There was a good mix of northern, southern, western and eastern Europe on the panel.
They begin with a disturbing observation: “Our findings are neither reassuring to the Union nor to our citizens: a global economic crisis; states coming to the rescue of banks; ageing populations threatening the competitiveness of our economies and the sustainability of our social models; downward pressure on costs and wages; the challenges of climate change and increasing energy dependence; and the eastward shift in the global distribution of production and savings. And on top of this, the threats of terrorism, organised crime and the proliferation of weapons of mass destruction hang over us.” Read more
At last week’s European Union summit in Brussels, most people were so focused on the Greek debt crisis that they missed an interesting development on the sidelines. This was an informal proposal from Herman Van Rompuy, the EU’s full-time president, to convene summits of EU heads of state and government once a month.
It would be a significant departure from the way the EU conducts its affairs. At present the EU holds four scheduled summits a year, usually in March, June, October and December. Since the financial crisis erupted in 2007-08, there have been various emergency summits as well. President Nicolas Sarkozy of France, who ran the EU’s rotating presidency in the second half of 2008, holds the record for calling unscheduled summits. Apart from those dealing with the financial crisis, he also convened one in response to Russia’s war with Georgia. 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
The inimitable Nicolas Sarkozy couldn’t resist the temptation to term last week’s allocation of jobs in the new European Commission as a victory for France and a defeat for Britain. In particular, the French president crowed, he had outmanoeuvred the Brits by securing the internal market portfolio, which is responsible for financial regulation, for Michel Barnier, the new French commissioner.
It was certainly a little undiplomatic for Sarkozy to uncork the metaphorical Champagne bottles so soon after the announcement of the new jobs. There are many raw nerves in the British government and in the City of London about how various EU measures in the pipeline may damage the UK’s financial sector. Sarkozy touched every one of those nerves with a rod of fire. Read more
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. Read more
Say what you like about Nicolas Sarkozy, he certainly knows how to capture your attention. At a meeting in the Elysée Palace last week with Israeli Prime Minister Benjamin Netanyahu, it appears that the French president recommended in no uncertain terms that Avigdor Lieberman, the hardline foreign minister, should be dropped from the Israeli cabinet and replaced with Tzipi Livni, the less abrasive opposition leader.
“Grave and unacceptable!” fumed Lieberman’s spokesman – how dare the leader of one democracy interfere in the internal affairs of another? Read more