December 9th, 2011

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Brussels (and Durban)

The EU summit is mostly over. A seven-page statement by the leaders of the countries using the euro outlines the solution: there will be a new treaty involving all the EU member states except the UK and Hungary, with the Poles and Czechs going away to think about it. Participating states will enshrine a commitment to balance their budgets at "constitutional or equivalent" level. This will certainly mean a referendum on Ireland, which could be simply on balanced budgets but much more likely on the deal as a whole. This will all take some time (though the conclusions optimistically speak of signing the new treaty "in March or at an earlier date"). In the short term more money is to be made available to the existing and planned bailout mechanisms. It's pretty much what Chancellor Merkkel and President Sarkozy were looking for; we will see in the course of the day if the markets are convinced (though the form is that immediate reaction to these things tends to be positive before buyer's remorse sets in).

It's a lousy outcome for the British, who are now locked outside the doors of the next stage of European integration. It's not quite equivalent to 1955, when the UK walking out of the Messina conference which set up the EU thus ensuring that the structures would be set up without Britain. But Anton La Guardia had a point when he said on Twitter that "at least Cameron cannot be accused of being Chamberlain. He has no piece of paper to bring home".

On 18 November Cameron met with Merkel in Berlin, and set out his price for signing up to a new treaty: i) Britain should be allowed to revert to its opt-out from the social chapter (as the previous Conservative government did), ii) unanimity should be brought back for decisions concerning financial services, and iii) any new system should include an "emergency brake" which non Euro Area member states could apply if and when they felt that decisions by the Euro Area threatened the integrity of the EU as such. There was never any chance of getting Germany (or indeed most other EU member states) to agree to these: the first two walked back previous British commitments, and the third potentially allowed states outside the euro to control the behaviour of states using the euro. So the other states went ahead without Cameron, joined in sulking outside by Orbán with Nečas and Tusk making up their minds.

I do wonder if Cameron deliberately set an unrealistic negotiating position in the certain knowledge that he would therefore return home with no treaty to sign, and thus avoid the embarrassment of either debating whether or not to have a referendum on the new treaty (or indeed holding the referendum and losing it). British journalists will no doubt concentrate on regurgitating the spin both from Cameron and the eurosceptics, but they are all marginal to the real process now. It is not so much a two-speed Europe as a one-speed Europe with stragglers, Britain being the largest of the later category.

Meanwhile, almost ten thousand kilometres away, the EU, the Alliance of Small Island States, and the Least Developed Countries are pushing in Durban for a new climate deal to include continuation of the Kyoto Protocol, more money to deal with climate change, and an agreed mandate to negotiate very quickly a new legally-binding agreement on carbon emissions by all the big players. They have another day to negotiate. This is where the action really is, in a sense; the euro crisis is only about money, while the Durban talks are about saving the world.
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EU summit analysis

I have posted a list of those attending the EU summits at the end of each of the last three semesters (here, here and here). Unfortunately I made a fairly serious mistake in all three posts, in that I had Romania and Lithuania represented by their prime ministers rather than by their presidents. I may go back and change the earlier entries, but not right now.

Today's list is as follows:

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I am still younger than all of them except the Latvian and Finnish prime ministers. The Danish prime minster's husband was two years below me at Cambridge, but she is a bit older than I am.
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Congratulations to Croatia!

After a long night of fractious negotiations which saw the UK write itself out of future European economic integration, there was a tangible shift of mood in Brussels this morning as Croatia signed its accession treaty with the European Union. It will become the 28th EU member state on 1 July 2013, just over ten years since lodging its membership application, and almost eight years after the negotiating process started.

It is a dramatic achievement for Croatia, which when I lived there in 1998 was still recovering from conflict and getting to grips with the social and economic changes needed to transform it into a modern European state. The EU's enlargement rules were changed after the 2004-07 enlargement to make this probably the toughest process that any candidate country has ever successfully gone through. I'm very glad to have assisted Croatia's Chief Negotiator, Vladimir Drobnjak, during the process.

There was an audible intake of breath when the Croatian prime minister, Jadranka Kosor, went up to sign the treaty this morning - neither at the beginning nor the end of the process, but in the middle, Hrvatska coming between France and Italy. She is on borrowed time, having lost last weekend's election, but it was a moment when local divisions, whether in Zagreb or Brussels, were put aside and the EU for once remembered the big picture of unity across the continent.

The EU leaders then went back to resolve other issues such as Serbia's troubled European aspirations, setting a date for Montenegro to begin membership negotiations, energy policy and admitting Romania and Bulgaria to Schengen. But from today on, Croatian officials will sit in all EU meetings along with the 27 current member states. I hope it won't be too long before other countries in their neighbourhood join them.