O que fará Merkel com a sua vitória?

O que fará Merkel com a sua vitória?

O que fará Merkel com a sua vitória?

By Charles Grant, 22 September 2013
From Publico

Link to press quote(s):

http://www.publico.pt/mundo/noticia/sem-ilusoes-1606720

Who do you think you’re kidding, Mr Schäuble?

Who do you think you’re kidding, Mr Schäuble? spotlight image

Who do you think you’re kidding, Mr Schäuble?

19 September 2013
From The Telegraph

Link to press quote(s):

http://www.telegraph.co.uk/news/worldnews/europe/eu/10320516/Who-do-you-think-youre-kidding-Mr-Schauble.html

Ragadós lesz-e a brit minta nálunk?

Ragadós lesz-e a brit minta nálunk?

Ragadós lesz-e a brit minta nálunk?

Written by Charles Grant, 10 September 2013
From Alapblog [Hungary]

Continuidad o cambio en Alemania?

Continuidad o cambio en Alemania?

Continuidad o cambio en Alemania?

Written by Charles Grant, 12 September 2013
From ESglobal

Royal Mail sell-off leaves Postman Pat confused

Royal Mail sell-off leaves Postman Pat confused

Royal Mail sell-off leaves Postman Pat confused

By Simon Tilford, 12 September 2013
From Financial Times

German elections 2013: 'Do as we do' will remain the message to Europe

German elections 2013: 'Do as we do' will remain the message to Europe spotlight image

German elections 2013: 'Do as we do' will remain the message to Europe

By Charles Grant, 10 September 2013
From The Guardian

Link to press quote(s):

http://www.theguardian.com/world/2013/sep/10/german-elections-2013-europe-angela-merkel

Continuity and change in Germany's EU policy

Continuity and change Germany's EU policy

Continuity and change in Germany's EU policy

Written by Charles Grant, 06 September 2013

However the Germans vote on September 22nd, Berlin’s attitude to the EU is not going to change much. The opposition Social Democrats call for a bit less austerity in Southern Europe but otherwise support most of Chancellor Angela Merkel’s policies. Nonetheless German policy on Europe is evolving – independently of the elections – in some important respects.

Germany is making a new effort to revive its damaged relationship with France. It is moving towards accepting a full banking union, including a resolution regime, though not, for now, on terms acceptable to most of its partners. It is recognising – with some regret – that there will not be a significant revision of the EU treaties in the coming years. And it is increasingly critical of the European Commission and the European Parliament.

The big strategic decisions on Germany and the EU are taken by politicians like Guido Westerwelle, the foreign minister, and Wolfgang Schäuble, the finance minister, and, above all, Merkel. But the key officials in the Chancellor’s office, the foreign ministry and the finance ministry are hugely influential on EU policy. That is not surprising, given that they – unlike most politicians – understand the technicalities of the EU’s inner workings.

These officials are more relaxed about the euro than they were six months ago. They think that modest progress in Ireland, Portugal and Spain is vindicating their insistence on austerity in these countries. They regard Greece as a hopeless case, but too small to threaten the euro’s survival. Italy is a much bigger worry, because its political system seems to make structural economic reform impossible.

As for the Official Monetary Transactions (OMT) – the bond-buying scheme unveiled by the European Central Bank a year ago, which reduced the cost of borrowing for the Southern Europeans – it should be “a bazooka that is left in the cupboard”, according to one official. If ever used, the ECB’s independence could be compromised: politicians would put pressure on the bank to deploy the OMT to achieve a particular spread for a country’s bonds, he says. And what would the ECB do if, once an OMT programme had started, its beneficiary stopped reforming? This official thinks that if a country applies the right policies, as Spain has done recently, it does not need OMT. And if a country chooses the wrong policies, OMT cannot save it.

Germany’s constitutional court in Karlsruhe is due to rule on the legality of the OMT this autumn. The view in Berlin is that court is unlikely to ban the OMT outright, though it may set conditions for its use.

German officials think that France, unlike Italy, is capable of reform. But in his first year as president, President François Hollande infuriated German officials: he tried teaming up with Spain’s and Italy’s leaders to oppose Merkel at summits, and did very little to revitalise France’s economy. The Germans talked of moving ahead without France. The French found the Germans’ tone patronising.

But this summer the atmosphere between Paris and Berlin has improved a little.  The Germans understand that they cannot lead Europe on their own. They say they have learned that lecturing France will not persuade it to reform. Only if France believes that it is an equal partner of Germany’s, they think, is there a chance if it reforming. Meanwhile Hollande has not tried to manoeuvre against Merkel in the European Council since February (when he was in a minority of one over the EU budget). At the end of May, a joint Hollande-Merkel letter floated ideas such as a eurozone budget, a bank resolution regime, contracts for economic reform and a permanent president for the Eurogroup (which brings together the countries in the euro).

German officials hope that after the general election they can restart the Franco-German motor with a grand bargain. France would accept Merkel’s idea of contracts – it would have to negotiate structural reforms with the Commission – and Germany would agree to a modest eurozone budget, to reward countries that undertake painful reforms. Some Germans believe that these contracts would be the most effective means of getting France to reform. The bargain would also cover a bank resolution regime, which France is keen to see implemented. None of these steps would require treaty change.

Despite their new, softer line on France, some Germans still worry that the French will exploit Germany’s willingness – in the event of a serious crisis – to do whatever is necessary to keep it in the euro, and that they will therefore shy away from difficult reforms. France would then slowly drift into Southern Europe and Germany would find it hard to lead the EU on its own.

Banking union is currently a major bone of contention between Berlin and Paris. Schäuble wants a resolution regime with a first phase “based on effective co-ordination between national authorities; and effective fiscal backstops, also including the European Stability Mechanism (ESM) as last resort.” (see FT article by Schäuble). The Commission, however – backed by most member-states, including France – wants to run a centralised system that draws on a new resolution fund. The Germans think the Commission would not be capable of acting quickly to resolve a bank, and that, given the fund’s initial small size, they might end up having to pay to clean up others’ banks. They also argue that the Commission is abusing the treaties by using a single market article as the legal base for its proposal.

At the moment, the two camps are far apart. But German officials are convinced that the EU needs a viable resolution regime. A possible compromise, one suggests, could involve Germany accepting the Commission as the resolution authority, provided the ESM is the backstop. Germany likes the ESM because it is run by a German and it has an effective veto over its money being spent.

Many German politicians, being committed to a federal Europe, retain some affection for the Commission and the European Parliament. But the key officials have become very critical of both bodies. They say that the Parliament has too much power and is out of touch. So when it comes to the proposed ‘new’ method of choosing the Commission president – the idea is that after the 2014 European elections, the party with the most MEPs would appoint its designated candidate – German officials are wary. They fear that this method could lead to a powerful Commission-Parliament alliance against the Council of Ministers (in which Germany is a dominant force). This wariness extends to senior German politicians. Without the co-operation of Angela Merkel and her European People’s Party, MEPs may struggle to impose the president of their dreams on the European Council.

Officials complain that the Commission lacks economic expertise, that it produces too many meddlesome rules, and that it spends too much time worrying about its own power. It annoyed them recently by pushing ahead with a directive banning certain greenhouse-gas coolants that are used in Mercedes air conditioners. And they are frustrated that the Commission gave France extra time to meet the 3 per cent budget rule, without first extracting commitments on structural reform.

Some German officials are keen to build up the ESM as an alternative to the Commission for eurozone governance. They admit that the ESM currently lacks economic expertise but think that in the long run it could evolve into a European Monetary Fund. They believe that in contrast to the Commission it is not subject to political pressure. However, some foreign ministry officials understand that Germany is rather isolated in its desire to bash the Commission. For example, Poland – an important German ally – is usually supportive of the Commission. These officials therefore believe that any German attempt to promote the ESM as an alternative will not get very far.

Another source of tension between Berlin and Warsaw is the Eurogroup. The Poles – like the British – want the key body for taking decisions in the EU to remain the 28-member Council of Ministers. They worry that building up the Eurogroup could hurt countries outside the euro, as well as the single market. Some German officials are ready to go along with France’s wish to develop eurozone-specific institutions. Merkel, however, is keen to maintain the importance of the 28, partly because of her warm relations with the Polish and British prime ministers.

Twelve months ago, German officials were all for treaty change; six months ago, they really hoped it would be possible, but recognised that it might not be. Now they think that in an ideal world, treaty change would be desirable, but they are mostly reconciled to its postponement for a long time. The reason is simple: the only other member-state that wants treaty change is the UK, which means that the chances of the whole EU adopting a new treaty are zero.

The top officials say that if there is to be a new EU treaty, it would have to be negotiated in 2016, as the various election and referendum calendars allow no other possibility. Any new treaty would be a small, “surgical” change that would not require a convention (a suitable model may be the fiscal compact, last year’s non-EU treaty that did not require ratification by all signatories before entering into force). But these officials acknowledge that there may well be no new treaty of any sort, and they say that the EU can cope perfectly well with the existing ones. (The finance ministry would still like a treaty amendment to strengthen the independence of the EU’s new banking supervisory mechanism, but that is a long-term objective. Its own plans for a resolution regime would not require an amendment in their first phase.)

Germany’s recoiling from treaty change will be unwelcome news to some British Conservatives. They have been counting on the EU needing a new treaty, and thus a British signature, in order to extract concessions – such as the repatriation of powers – from Britain’s partners. It seems unlikely that the British government will enjoy that kind of leverage before the referendum that David Cameron has promised in 2017.


Charles Grant is director of the Centre for European Reform

How France went from loner to leader on European defence policy

How France went from loner to leader on European defence policy spotlight image

How France went from loner to leader on European defence policy

By Rem Korteweg, 04 September 2013
From The Globe and Mail

Link to press quote(s):

http://www.theglobeandmail.com/news/politics/how-france-became-obamas-best-friend-in-europe-on-defence-issues/article14117079/

The Commons vote on Syria: The world turned upside down

The Commons vote on Syria: The world turned upside down

The Commons vote on Syria: The world turned upside down

Written by Ian Bond, 04 September 2013

Prime Minister David Cameron made a strong case for taking military action to punish the Syrian regime for using chemical weapons. Labour leader Ed Miliband said that he was willing to consider it. It took a combination of party political manoeuvring and a rebellion by Conservative isolationists to defeat the government on August 29th, ensuring that Britain would not join in any operation. The vote is already affecting the UK’s relationship with the US. It may also reduce still further Europe’s willingness to equip and train for conflicts outside its borders. It does not (yet) mean that Britain has pulled up the drawbridge, but it will make it harder for future governments to get involved in wars, even for noble causes.

The vote in the Commons did not necessarily reflect a majority against the principle of military action. Four hundred and ninety MPs voted to start a process that could lead to military action. But they were split: the government, with no support from Labour MPs, put forward one set of conditions that would have to be met; the Labour Party, with no support from the coalition’s MPs, proposed a slightly different set. Only 52 MPs voted against the use of force in any circumstances by opposing both the government and opposition proposals.

The main reason that the government lost was that 30 Conservative and 9 Liberal Democrat MPs voted against the government motion (with many others absent or not voting). There was a sense among the Conservative rebels that this was not Britain’s fight: comments included "Our job in this parliament is to look after our own people" and "The world needs to act. The world, however, does not equal the UK". There was a striking amount of criticism of the US, occasionally bordering on hostility, from some Conservatives.

A closer look at the 30 Conservative rebels is revealing: 26 of them also rebelled against the government and voted in favour of a referendum on the UK's EU membership in October 2011. In the past, many Conservative eurosceptics have favoured an Atlantic alternative of closer partnership with the US rather than the EU. There is now a significant group, however, for whom the choice is not between Europe and the open sea, but between (as they see it) the illusion of "punching above our weight" and the reality of being a medium-sized power with domestic problems to fix. Their position resembles that of the populist UK Independence Party, which – to quote their website – opposes "needless foreign adventures that don't directly affect us as a nation".

To judge from opinion polls, this scepticism about UK involvement in distant conflicts reflects the popular mood; but in the past national politicians have been more willing to ignore such sentiments in favour of maintaining Britain's status as a leading world power and defender of international norms. If the Prime Minister and Ed Miliband had been more confident that taking action was the right thing to do, they might have found it easier to agree on a motion that government and opposition could both back. As it was, the Prime Minister had no hesitation in confirming on the night of the vote that the government would abide by what he considered to be the will of Parliament: Britain would not take part in any military action against Syria. Ministers have been surprisingly ready to say that there will not be another vote unless circumstances change very significantly – almost as though defeat had come as something of a relief to them. It is not clear how bad things would have to get in Syria before they would revisit the issue.

While publicly the US administration has expressed understanding for the situation, in his speech on August 30th Secretary of State John Kerry pointedly left the UK out of a list of US allies in dealing with Syria. British military staff attached to US Central Command headquarters (from which any Syria operation will be run) are reportedly being excluded from discussions. It is certainly an exaggeration to speak of the demise of the special relationship – not least because the unique intelligence relationship between the UK and US will certainly continue. But at least since the invasion of Iraq in 2003, Britain's willingness to turn up has been more important to the US than any practical military contribution it could make. If the UK loses the political will even to play a symbolic role in operations, that will certainly erode the basis of the relationship.

There is also a question of why President Obama has now decided to consult Congress before taking military action – something which clearly was not envisaged before the British vote. Was the President's position weakened by David Cameron’s defeat, so that he felt he had to give in to pressure from Congressional Republicans to offer them the same chance that British MPs had had to debate military action? Comments by White House officials suggest a degree of irritation with the British for starting down this road. If (as is possible) Obama fails to get the support of at least the House of Representatives, the administration may well put part of the blame on the British. Another CER Insight in the coming days will deal with other international implications of a possible strike on Syria.

Within Europe, the Commons vote threatens to undermine improving Franco-British ties on defence and security. David Cameron and Francois Hollande are not natural soul-mates, and Hollande did not initially share Nicolas Sarkozy's enthusiasm for defence co-operation with the UK. But Britain's willingness to provide modest logistical help in the initial stages of France's Mali operation earlier this year, and subsequent shared views on Syria (including on the question of partially lifting the EU's arms embargo to allow weapons deliveries to the opposition) had started to turn things round. This renewed alignment between the UK and France, and the embarrassment of failing to back them in Libya in 2011, seemed to be nudging Germany in the direction of supporting action in Syria (Foreign Minister Guido Westerwelle said on August 26th that if the use of chemical weapons were confirmed by UN inspectors, then Germany would "be among those who think that some consequence will have to be drawn"). After the British vote, and probably not by coincidence, Chancellor Merkel's spokesman seemed to rule out any German involvement, leaving France isolated as the only European country likely to join the US in military operations.

The British vote comes at an inconvenient time in the preparations for the December European Council discussion on European security and defence policy. The UK has been a keen promoter of increased European defence capabilities, particularly those such as strategic airlift which would enable European countries to play a more active part in expeditionary operations. But if reluctant partners believe, rightly or not, that the UK itself is losing the political will to undertake such operations, they are unlikely to respond to British pressure to spend more on such capabilities (though they may be relieved that the UK will no longer try to push them into wars at the behest of the US).

In NATO the vote may have an impact on the unresolved division between allies who believe that the alliance's main focus should be on territorial defence, and those who see the main threats to transatlantic security as global, not European, and want NATO to be able to act beyond its borders. Again, the UK's credibility as a strong supporter of an expeditionary outlook for NATO is likely to be reduced, while the position of countries like Poland (which has ruled out taking part in action against Syria and is more focused on security issues in its immediate neighbourhood) may be strengthened.

The Commons vote may turn out to have little long-term impact on the UK’s world view. Any response to Assad’s use of chemical weapons is hedged with uncertainty. If a limited strike fails to prevent the future use of nerve gas, what would the Western reaction be? What impact would a strike have on regional security? Would it destroy any hope of improving the West’s relations with the new president of Iran, making conflict more likely? Perhaps in other circumstances, with more clarity about the ramifications of action, a parliamentary majority could be found. Perhaps next time the government would do a better job of rounding up its members to vote. Perhaps next time the Labour Party, having exorcised the demons of 2003 and the decision to invade Iraq, could vote on the merits of the case when an atrocity needs to be punished.

But equally, the vote could turn out to be the signal for a strategic shift in favour of insularity. By voting – almost by accident – against even a modest military gesture, British MPs risk sending the message that in future the UK will be content to stay on the side-lines, regardless of what is happening in distant lands. For all the expressions of dismay from veteran statesmen like Tony Blair, former Foreign Secretary Sir Malcolm Rifkind and former Liberal Democrat leader Lord Ashdown, public opinion seems happy with that; and current political leaders seem disinclined to court unpopularity by reiterating the case for interventionism. For a country with global economic and security interests, that is a risky position to take, and a bad example to set.

Ian Bond is director of foreign policy at the Centre for European Reform.

Comments

Added on 01 Oct 2013 at 16:25 by Anonymous

I agree with this analysis but would like to see an examination of the costs and benefits of our participation in expeditionary warfare. How does it help the UK to have a seat at the top table and to punch above our weight?

Added on 04 Sep 2013 at 14:47 by Anonymous

Brits should be very happy that The House Commons did not approve Cameron attack on Syria. I am not sure though if this means that the age old colonialist Britain is finally geting rid off this disease out of its system! Plese save your breath on arguing the detrimental consequences of this step on European (and American) "security" a baloney we have so often heard as pretext for oil robbery from Middle East and establishing "sheria" regimes in the Middle East so that the peoples of these countries keep their ignoramous state forever for the rich to exploit them till eternity.

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