Spain

Tony Barber

You know that the European Union is in trouble when Russia offers more intelligent advice on the eurozone’s debt crisis than Spain, the country that holds the EU’s rotating presidency.  Dmitry Medvedev, Russia’s president, disclosed the other day that he had recommended to George Papandreou, Greece’s prime minister, that the Greek government should request assistance from the International Monetary Fund to sort out its problems.

This is exactly the course of action advocated by several non-eurozone EU countries as well as a host of distinguished economists and, dare I say it, the editorial writers of the Financial Times.  As it happens, I don’t agree – if by IMF assistance we mean financial help.  The IMF will be involved, along with the European Central Bank, the European Commission and eurozone finance ministers, in monitoring Greece’s public finances and providing technical aid as required. Read more

Tony Barber

Europe’s leaders are getting radical.  On Thursday the presidents, prime ministers and chancellors of the European Union will meet for a day of economic policy discussions in Brussels – but not in their normal location, the marble-and-glass Council of Ministers building, famous for its charmless, disinfected atmosphere and its 24km of headache-inducing corridors.  No, this time they will get together in a nearby building called the Bibliothèque Solvay, which is a pleasant old library rented out for dinners and receptions.

The switch of location was the brainwave of Herman Van Rompuy, the EU’s first full-time president, who thought it would encourage a more creative, informal exchange of views.  He has introduced another innovation: each leader is to be restricted to just one adviser at the talks.  This isn’t a problem for countries with leaders who are masters of economic policy detail.  But others are less happy about the arrangement.  It is whispered that the Italians are swallowing especially hard, wondering what on earth Prime Minister Silvio Berlusconi will say once he’s on his own. Read more

Tony Barber

Whether it’s climate change, foreign policy or the increasingly alarming fiscal crisis, the European Union’s difficulties can be summed up in one word: disunity.  After December 1, when the EU’s Lisbon treaty came into force, disunity was supposed to be a thing of the past.  Instead, disunity has proved to be very much a thing of the present.  What’s more, the Lisbon treaty may – at least in the short term – be making matters worse.

Take the world conference on climate change at Copenhagen in December.  According to Connie Hedegaard, the EU’s incoming climate change commissioner, disunity – in the sense of a cacophony of European voices – was an important factor behind the ability of other powers to brush aside the EU’s views.  “Those last hours in Copenhagen, China, India, Japan, Russia and the US each spoke with one voice, while Europe spoke with many different voices.  Sometimes we spend so much time agreeing with one another that when finally the EU comes to the international negotiations, we are almost unable to negotiate,” she told her confirmation hearing at the European Parliament last month. Read more

Tony Barber

President Barack Obama’s decision not to travel to Spain in May for a US-European Union summit does not come as a great surprise to EU policymakers.  They knew weeks ago that he had gone cool on the idea.  Nonetheless, it will hurt.  It will be read as a signal from the White House that the president doesn’t think the meeting would be especially productive.  And that speaks volumes about how other powers, even allied countries such as the US, view the EU as a force on the global stage.

“An unsentimental President Obama has already lost patience with a Europe lacking coherence and purpose,” wrote Nick Witney and Jeremy Shapiro in a report last November for the European Council on Foreign Relations think-tank.  “In a post-American world, the United States knows it needs effective partners.  If Europe cannot step up, the US will look for other privileged partners to do business with.” Read more

Tony Barber

Greece’s fiscal emergency is a most mystifying crisis.  At one level, it is the most serious test of the eurozone’s unity since the launch of the euro in 1999.  Unless correctly handled, the problem with Greece’s public finances could shake the foundations of Europe’s monetary union.

At another level, however, Greece itself seems to be getting off remarkably lightly.  Germany suffered a 5 per cent slump in gross domestic product last year; Greece is expected to have suffered a fall of about 1.1 per cent.  Spain has a 19 per cent unemployment rate; Greece’s rate is only 9 per cent.  The Irish government is imposing extreme austerity measures on its citizens to protect Ireland’s eurozone membership; Greece’s government is, so far, doing nothing of the sort.  No wonder Greece’s 15 eurozone partners, the European Commission and the European Central Bank are furious with the political classes in Athens. Read more

Tony Barber

How many days can a Spanish kite stay in the air?  About four, to judge from the speed with which Germany and the UK have shot down a proposal from José Luis Rodríguez Zapatero, Spain’s prime minister, to introduce binding mechanisms to enforce economic reform in the European Union.

The short lifespan of Zapatero’s brainwave, which he unveiled last Thursday in Madrid, is hardly surprising.  Not that it’s an especially bad idea – in principle.  Deep in their hearts, most European policymakers know the EU would benefit from closer fiscal and economic policy co-ordination, particularly in the eurozone.  They also know that the lesson from the EU’s ill-starred Lisbon agenda, which notoriously set out – and failed - to turn the bloc into the world’s most competitive economy by 2010, is that it was all too easy for governments to pay lip service to reform without doing much about it in practice (except for the virtuous Nordic countries). Read more

Tony Barber

Herman Van Rompuy, the European Union’s first full-time president, is getting down to business.  Hitting the ground running?  Not exactly.  But in various subtle ways the mild-mannered, philosophically inclined former Belgian premier is already making an impact on the way the EU goes about its work.

On Monday, his first official working day, he announced that he was summoning all 27 EU heads of government to Brussels on February 11 for an unscheduled summit on economic policy.  This statement didn’t attract much attention, because plans for such a summit were being laid even before Christmas.  But the announcement was significant nonetheless.  Chairing summits is one of the few duties that the EU’s Lisbon treaty specifically reserves to the full-time president.  By calling an unscheduled summit, Van Rompuy was signalling to the world that he intends to use his presidential authority to the full. Read more

Tony Barber

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. Read more