Nicolas Sarkozy – the view from Britain

Nicolas Sarkozy – the view from Britain

Nicolas Sarkozy – the view from Britain

By Charles Grant, 25 January 2012
From The Guardian

Link to press quote:
http://www.guardian.co.uk/world/2012/jan/25/nicolas-sarkozy-view-britain-profile

Breakfast on 'Europe's future, and Italy's role in it'

Breakfast with Giuliano Amato on 'Europe's future, and Italy's role in it'

Breakfast on 'Europe's future, and Italy's role in it'

24 January 2012

With Giuliano Amato

Location info

London

Event Gallery

Nicolas Sarkozy, au-delà du bling-bling, vu par "The Guardian"

Nicolas Sarkozy, au-delà du bling-bling, vu par "The Guardian"

Nicolas Sarkozy, au-delà du bling-bling, vu par "The Guardian"

By Charles Grant, 25 January 2012
From Le Monde

Link to press quote:
http://www.lemonde.fr/europe/article/2012/01/25/nicolas-sarkozy-au-dela-du-bling-bling_1634163_3214.html

EU faces struggle to bridge divide with Britain

EU faces struggle to bridge divide with Britain

EU faces struggle to bridge divide with Britain

By Charles Grant, 20 January 2012
From Reuters

Link to press quote:
http://uk.reuters.com/article/2012/01/20/uk-eu-barnier-idUKTRE80J0CN20120120

Is Austria the new Finland?

Is Austria the new Finland?

Is Austria the new Finland?

Written by Katinka Barysch, 13 January 2012

In August 2010, a newly elected Slovak government refused to contribute to the first Greek bail-out. A year later, the rising popularity of the anti-euro True Finns pushed the Finnish government to demand that Greece should put up collateral in return for new loans. Which eurozone country will be next in line to hold up a bail-out package or veto new rules? Austria could be a good candidate.

Each time a smallish EU country balks at euro rescue efforts, analysts and policy-makers scramble to figure out its political dynamics and wonder why they had missed the brewing storm. With populism on the rise in much of Europe, and big countries dominating eurozone decision-making, it is only a matter of time before the next member-state throws a spanner in the works.

The EU’s traditional mode of decision-making is too cumbersome to fight the euro crisis. Instead, Chancellor Angela Merkel and President Nicolas Sarkozy have regularly pre-cooked plans before euro summits. Small and discreet bodies such as the Frankfurt Group (Germany, France, the European Central Bank, two other EU representatives and the IMF) have taken centre stage. The EU’s Brussels-based institutions have often been sidelined. So have smaller EU countries. Resentment about not having a voice has helped to lift nationalist and anti-euro forces in such countries. Their interventions are making EU policy-making a lot less predictable.

Austria could be the next place where the rise of anti-euro populists turns into a problem for the EU as a whole. The anti-immigrant and anti-euro Freedom Party (FPÖ) is polling neck and neck with the established parties, the conservative People’s Party (ÖVP) and the Social Democrats (SPÖ), which currently govern the country in a grand coalition.

A national election is not due until 2013. But in Austria’s scandal-ridden politics, an early election cannot be ruled out altogether. Some say that the current impasse over a planned national debt brake and austerity measures could spell the end of the ÖVP-SPÖ coalition.

During the days of the late party leader Jörg Haider, the FPÖ joined a coalition government with the ÖVP, prompting the other EU countries to boycott the Austrian government. Wolfgang Schüssel, Austria’s wily chancellor (prime minister) at the time, managed to neutralise the FPÖ in government. The party duly split in 2005 and for a while fell back to single digit support levels. Now it could be heading back towards 30 per cent. It is too early to predict the next election outcome. But tired of their deadlocked, squabbling grand coalition, Austrians seem to dread the spectre of an even bigger coalition of ÖVP, SPÖ and Greens (to keep the FPÖ out of power) just as much as a renewed ÖVP-FPÖ tie-up.

Few Austrians think that the current ÖVP leader (and foreign minister), Michael Spindelegger, could control the FPÖ’s firebrand leader, Heinz-Christian Strache. Strache already boasts that he will be the next chancellor. Strache’s personal approval ratings are awful, he lacks a comprehensive programme, and his party is as prone to scandals as its peers. But Strache’s promises to stop sending Austrian money to Brussels, hold referendums on existing euro rescue packages and start a debate about Austria leaving the euro resonates with the many EU-sceptic Austrians.

The Austrians’ ambivalence towards the EU has long been a puzzle. As a small, open and centrally located country that lives on exports and tourism, Austria has benefited a lot from the EU single market and the euro. Yet Austria has punched below its weight in Europe, its EU policies have been rather parochial (with few initiatives beyond the Balkans) and it has not produced as many great European figures as, for example, Sweden or Finland.

In surveys the Austrians have consistently been among the most sceptical about the EU. In the latest Eurobarometer poll, published in December 2011, 42 per cent of Austrians said they had a bad image of the EU. In neighbouring Germany, France and Italy, those shares are much lower, at 20-25 per cent.

However, Austria’s euroscepticism looks shallow. When asked more specifically whether they trust EU institutions, and want the EU to get more involved in, say, protecting the environment or fighting terrorism, the Austrians show themselves as solid (though not enthusiastic) pro-Europeans. While the Austrians are much less keen on more EU co-operation to save the euro than the Dutch or Finns, over half of Austrians say they would welcome eurobonds.

If the public mood on Europe appears confused, the government’s EU policies are even more so. In a baffling U-turn on the big parties' traditional pro-EU stance, Faymann in 2008 promised to hold referendums on future EU treaty changes. But after agreeing to the new eurozone-plus treaty (‘fiscal pact’) in December, Faymann wiggled out of his referendum promise, causing glee in an FPÖ that has long demanded more direct democracy.

Having been as implacably opposed to eurobonds as Germany, the government changed its mind once Austria's own bond spreads started rising last autumn. Shortly afterwards, Faymann departed from Austria’s monetary orthodoxy when he suddenly called for the ECB to play the “leading role” in saving the euro by financing the EFSF and the ESM. Meanwhile, Spindelegger came out in support of a smaller European Commission – although Austria has always been a staunch defender of the principle that each country must have its ‘own’ commissioner in Brussels.

Asked to evaluate Austria’s EU policies in a recent interview, the Czech foreign minister, Karel Schwarzenberg, quipped that “I cannot comment on something that does not exist”. That verdict may be unkind. But the impression persists that the current muddle results from the coalition’s desperate attempt to catch the eurosceptic mood and thus stop the FPÖ’s rise.

In her euro policies, Merkel is trying to keep the ‘smalls’ on board. She makes a point of phoning leaders from smaller eurozone countries to discuss (some say inform them about) plans for the next summit. She met Faymann ahead of the December euro summit. She, and Sarkozy, need to do more to quell the impression that today’s EU is run by a directorate of big countries, or worse, by a Berlin dictate. But the smaller countries also need to take advantage of such opportunities by presenting constructive proposals. For some, it appears easier to moan about being steamrolled by the Franco-German juggernaut than to stand up for their own ideas and interests.

Austria – with its enviable growth and unemployment rates (roughly 3 per cent and 4 per cent, respectively, in 2011, on EU data) – would be well suited to act as a spokesman for eurozone’s smaller creditor countries. It could be pro-active in safeguarding the authority of the EU Commission, without which the EU cannot function well. It could use its close ties to neighbouring Germany to remind Berlin that growth-promoting strategies are needed to deal with the debt crisis.

Instead, the coalition government’s lack of an EU strategy is playing into the hands of the Freedom Party: at least Strache’s anti-euro message is loud and clear. Unless the two main parties come up with an attractive alternative, Austria could become the next euro country that feels compelled to veto a euro rescue plan to placate domestic voters.

Katinka Barysch is deputy director of the Centre for European Reform.

Comments

Added on 18 Jan 2012 at 09:56 by Brian Crowe

As a former British Ambassador to Austria, 20 years ago, I read with interest you admirable new note on it. Austrian EU policy is indeed baffling, though the obvious explantion is that it is hand-to-mouth, guided by the moment and without principle (which would not have happened under Wolfgang Schüssel).

The EU did not impose sanctions when Schüssel formed a coalition with the FPÖ. Even if the EU had had theoretical power to do so (which is doubtful), it would have had to be by consensus and Austria would of course have vetoed. I doubt whether there would have been a consensus even without Austria. Nobody much liked the Austrians, if the truth be told, but feelings were stronger in some member states than others. What happened was that individual member states took measures and made noises, but there was not and could not have been any collective EU action, let alone sanctions.

Incidentally, in my view, subsequent events showed Schüssel to have been right, in that (as he calculated, as told me at the time) the FPÖ was tamed, if only temporarily but to an extent that it caused it to split.
A grand coaltion proved unviable, with the alternative an election in which the FPÖ would probably have been strengthened. Of course Schüssel was self-interested in that he didn't want to lose the chancelloorship.

Yours
Brian Crowe

Is a breakaway Scotland brave or foolhardy?

Is a breakaway Scotland brave or foolhardy?

Is a breakaway Scotland brave or foolhardy?

By Hugo Brady, 12 January 2012
From Reuters

Link to press quote:
http://uk.reuters.com/article/2012/01/12/uk-britain-scotland-future-idUKTRE80B13V20120112

Is Britain on the way out?

Is Britain on the way out?

Is Britain on the way out? video icon

The German Marshall Fund of the US
By Charles Grant, 01 January 2012
From The German Marshall Fund of the US

Link to video:
http://www.gmfus.org/archives/in-8-minutes-or-less-is-britain-on-the-way-out

EU legal expert casts doubt on new fiscal treaty

EU legal expert casts doubt on new fiscal treaty

EU legal expert casts doubt on new fiscal treatyvideo icon

EU Observer
By Charles Grant, 11 January 2012
From EU Observer

Link to video:
http://euobserver.com/9/114835

What Europe's new diplomatic service can do for Britain

Britain should stop underming EU foreign policy

What Europe's new diplomatic service can do for Britain

Written by Edward Burke, 10 January 2012

As the influence of individual European countries vis-à-vis rising giants such as China declines, many look to the EU’s new diplomatic corps – the European External Action Service (EEAS) –– to augment their strength. But in 2011 Britain blocked the EEAS from articulating common EU positions at the UN, the Organisation for Security and Co-operation in Europe (OSCE), and in some foreign capitals, angering other member-states. However, a recent agreement among EU countries over representation at international organisations should allow Britain to adopt a constructive approach towards the EEAS. It may also help to add European weight to British foreign policy objectives.

Even prior to the 2009 adoption of the Lisbon Treaty, which created the EEAS, the EU had routinely spoken with one voice in multilateral forums. Therefore it came as a surprise to other EU member-states when Britain decided to renege upon established procedures. In May of last year, Foreign Secretary William Hague sent an urgent diplomatic cable to all British overseas missions, warning diplomats to look out for EEAS ‘competence creep’. Hague believed that the EEAS – without the consent of the member-states – was increasingly speaking for Europe on foreign policy issues, even where competence rested with national governments rather than the EU institutions. Shortly afterwards, British diplomats began to block EEAS officials from speaking at international organisations, saying that new arrangements were needed to clarify when the EEAS was speaking for the EU institutions, the member-states or both.

Germany, the Netherlands and other countries took a dim view of Britain’s concerns, seeing a eurosceptic, ‘spoiling’ agenda behind Britain’s actions. In particular, they resented William Hague’s opposition to a more forceful EU representation at the UN. Meanwhile, the European Commission threatened to take Britain to the European Court of Justice if the UK persisted in blocking the EU from speaking at multilateral organisations where it had at least partial competence.

On October 22nd 2011 EU foreign ministers agreed to new rules on diplomatic representation. In future, the EEAS and other EU representatives will have to identify when they are speaking on ‘behalf of the EU’ (implying that common institutions enjoy full competence over the matter), ‘on behalf of the EU and its member-states’ (in cases when common institutions share competence with national governments) or ‘on behalf of the member-states of the EU’ (when EU institutions have no competence and only act upon request of the member-states). Britain believes that these arrangements will prevent EEAS officials from making commitments without first consulting the member-states.

While the UK government feels vindicated by the October 22nd agreement, other capitals are grumbling about it. They argue that precedents have long existed for the EU to represent the member-states on issues of shared competence (as they have done for the past 20 years at the UN Food and Agriculture Organisation, for example). They are concerned that the UK will use the new rules to block a more proactive role for the EEAS in international organisations. Some also worry that the squabble over representation signals a deeper UK dislike for a collective EU foreign policy, and fear that the EU’s ability to reach out to the emerging powers, in particular, will suffer.

The UK government agrees that the EEAS should co-ordinate member-states’ policies towards countries such as Brazil, China or India, and try to bring European views closer together. But London opposes any suggestion that EEAS officials should craft foreign policy. As part of its wider vision of a more inter-governmental EU – as opposed to one with strong, centralised institutions – the UK wishes the EEAS to play a limited and strictly subservient role to its own diplomacy. In a speech at the Foreign Office in September 2010, Hague rejected any reduction in Britain’s own diplomatic outreach in favour of a new, European form of diplomacy: “We cannot outsource parts of our foreign policy to the European External Action Service as some have suggested. There is not and will never be any substitute for a strong British diplomatic service that advances the interests of the United Kingdom. We can never rely on anyone else to do that for us.” This view runs directly contrary to a desire of smaller member-states for the EEAS to speak on their behalf to the rising powers of Asia, Africa and Latin America.

Britain is not alone in refusing to substitute its bilateral relations with other countries for an approach led by the EEAS. Although the UK government is influenced by a long-standing ‘euro-scepticism’ within its ranks, the concerns of Germany, France and Italy derive from a more practical standpoint. These larger member-states are simply not yet convinced that the EEAS, despite the influx of seconded diplomats from EU countries, can match their own standards for political reporting and negotiation. They think that a collective European approach in foreign capitals is desirable but impractical under the current circumstances. So the EEAS is caught between misgivings over its right to speak on behalf of member-states and a lack of faith in its ability to do so. Consequently, the hopes of smaller member-states for an integrated European diplomacy in Beijing, Brasilia or New Delhi are likely to be disappointed.

It will take time to build a capable diplomatic service. The smaller member-states should therefore scale back their ambitions for the EEAS, and the EU as a whole needs to give its diplomatic service a more focused mission. The EU’s nascent diplomacy should mirror that of an emerging power, initially focusing on trade and consolidating its influence in the European neighbourhood. The EEAS should play a complementary role to the Commission’s trade duties by providing the political information that can make or break negotiations. While the Commission’s officials are good at technical dossiers they often lack an understanding of the internal political situation in the countries with which they are negotiating. For example, at a Doha round of WTO talks in 2008, EU officials underestimated the resistance of Brazil, India and others to a deal on reducing agricultural subsidies, leaving commissioners to appear surprised and defensive.

Similarly, in September 2010, the EU delegation failed to foresee that the European Union’s bid to gain speaking rights at the UN General Assembly would run into opposition from even traditional allies such as Australia, Canada and New Zealand. Neither was the EU aware until the last moment that the Caribbean Community, an important EU development and trade partner, would lead opposition to its proposals. This defeat exposed the lack of diplomatic capability within the EU, where an overwhelming focus on internal dialogue and co-ordination prevailed over outreach to external partners and political analysis. EEAS diplomats are well positioned to address this deficit, and the UK should push the EEAS and the Commission to work jointly to help the EU craft a better diplomatic strategy for future negotiations relating to trade and other areas.

Britain also has a strong motive to encourage the EEAS to become more active in the European neighbourhood, in particular in the Middle East and North Africa. Here, Britain lacks a comparative advantage over other member-states: Paris, Madrid and Rome have more influence in parts of the Arab world than London, and they have also taken the lead in shaping the EU’s policies towards the southern neighbourhood. The UK has previously opted for a secondary role, missing a valuable opportunity for added influence in a strategically important part of the world.

Britain has a security and trade interest in fostering stability in countries such as Egypt and Libya. And while it lacks the political and economic tools to do so alone, the EU is North Africa’s biggest market and investor. The European Commission now plans to spend €18 billion in development assistance from 2014 to 2020 in the neighbourhood countries, an increase of seven billion euros from the previous funding period. The EU has adopted a ‘more for more’ principle in the wake of the ‘Arab spring’, offering to negotiate enhanced access to EU markets in return for a strengthening of democratic institutions in neighbourhood countries. The UK should now press the EEAS to come up with clear criteria to measure progress towards political reform to ensure that ‘more for more’ becomes a consistent reality rather than mere rhetoric.

The UK relationship with the EEAS has got off to a difficult start. David Cameron’s decision in December 2011 to opt out of an agreement to create a fiscal union between most EU member-states further complicated Britain's relations with the rest of the EU. But foreign policy remains a prerogative of the full EU of 27 members, and Britain will have a strong say in it, even if it is not in the fiscal union. It is in the UK’s interest to work with other member-states to set coherent and achievable objectives for the EEAS. The agreement of October 22nd provides an opportunity for Britain to turn from defensive laggard on the EEAS to constructive pragmatist. The alternative is a constant, mutually destructive clash between competing bureaucracies. Britain is entitled to resist ‘competence creep’. The best remedy is for the UK to tell the EEAS what to do and where.

Edward Burke is a research fellow at the Centre for European Reform.

Comments

Added on 24 Jan 2012 at 11:13 by Ben Tonra

Thanks for that - incisive and useful analysis.

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