Zapatero

One of the most high-profile dust-ups between the US and the European Union since President Barack Obama took office was a White House decision to skip out on a May summit with the EU that was to be held in Madrid during Spain’s turn at the bloc’s rotating presidency.

The decision was seen by many Europeans as a snub, and hurt feelings have persisted for months. The issue was raised anew just last month when Obama finally agreed to an EU summit, this time tacked onto a Nato gathering in Lisbon, with the US continuing to insist that the only reason the Spanish summit was scrapped was because of Obama’s already heavy European travel schedule.

But two cables made public as part of the WikiLeaks dump this week present a more complicated picture of the White House decision-making. They make clear that senior US officials believed that there simply was not enough substance to the agenda to make the meeting worthwhile.

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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

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

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

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