EU summit seeks to avert 'perfect storm'[fr][de] 

In a foretaste of what Europe could become under the Lisbon Treaty, the opinion of the European Parliament is already a major factor in decision-making, but the opinion of the EU's legal services is taking centre stage too, several high-ranking diplomats conceded. 

"There is a risk that by the end of the year we may end up without a Commission president, without a Commission and without the Lisbon Treaty," said one EU ambassador, speaking on condition of anonymity. 

He was referring to the fact that the possible postponement until autumn of the nomination of José Manuel Barroso for a second term at the Commission's helm, coupled with a setback in the final phase of Lisbon Treaty ratification, could create a rare situation described as "the perfect storm", leaving Europe with little governance in the midst of a world economic crisis. 

'Tempest Klaus'

"We will still have a big problem with [Czech] President [Václav] Klaus," the same diplomat added. 

Indeed, the Eurosceptic Czech president published a letter  on his website yesterday (17 June) warning Prime Minister Jan Fischer that the country's parliament must ratify the guarantees which EU leaders are expected to offer Ireland today, or else he would not approve them. Fischer responded on the government's website that as the guarantees do not represent an international treaty, there is no legal obligation to ratify them. 

According to diplomats, Klaus's strategy is to buy time in the hope that the British Conservatives, who may come into power before the Lisbon Treaty has entered into force, will call a referendum to kill it, despite the fact that the UK has already approved the EU's reform treaty. 

Those EU leaders who would like to have Barroso officially confirmed as soon as possible see him as an anchor in high seas. In particular, the upcoming Swedish EU Presidency is insisting on his being confirmed as soon as possible. 

The legal guarantees to Ireland (EurActiv 16/06/09) were described by one diplomat as "a fragile compromise between the bare minimum for Ireland and what is acceptable to other members". The important paragraph on keeping 27 commissioners, as Ireland is insisting (EurActiv 12/12/08), is not part of these guarantees, but will be part of the summit conclusions, he explained. However, he deplored the fact that this part of the conclusions had not yet been made available by the Czech Presidency. 

Barroso is expected to speak today at the Council plenary, responding to a request by French President Nicolas Sarkozy and German Chancellor Angela Merkel (EurActiv 02/06/09) to "commit" to a "protective Europe". The procedure would allow leaders to endorse Barrosos's nomination unofficially, and request the outgoing Czech Presidency, as well as the incoming Swedish Presidency, to conduct "consultations" with the European Parliament on whether there is a majority there to endorse Barroso by secret ballot. 

Barroso's second term depends on Parliament 

A diplomat said the "consultations" would in fact be tasked with "negotiating under which conditions the Parliament would be ready to support Barroso". 

Under the most optimistic scenario, should consultations with the European Parliament demonstrate that a pro-Barroso majority exists, his nomination will be turned into a legal text by written procedure, without any need for EU leaders to meet again. Then on 15 July, the second day of the first part-session of the newly-elected European Parliament, Barroso could be officially confirmed to lead the EU executive for the next five years. 

However, MEPs' support for Barroso is far from assured. Belgian Liberal MEP Annemie Neyts-Uyttebroeck told EurActiv that there were "dissidents" inside every political group, and no group leader could guarantee support for his candidacy as the final vote in Parliament will be held by secret ballot. 

Meanwhile, attempts to appoint Barroso under the Nice Treaty could in fact boost opposition to him. At the last European Parliament session in May, MEPs voted by an overwhelming majority to appoint the next Commission president under the Lisbon Treaty. 

The group made up of MEPs from the Party of European Socialists (PES), which yesterday renamed itself the 'Group of the Progressive Alliance of Socialists and Democrats for Europe' (GPASDE), will press to postpone the designation of the next Commission president, PES leader Martin Schultz said yesterday. 

"It is not so much against the person, it's against the procedure," an ambassador from a country with a PES-affiliated prime minister said. Other sources said the Socialist group would easily support Barroso if the European Parliament presidency were given to the centre-left grouping. The decision to appoint the next president of the European Parliament will be taken on 7 July. 

In theory, all 27 EU leaders support Barroso, who is the only candidate, but several countries have "conditions attached" to their support, diplomats said. The ambassador of a small EU country said that in substance, this was a position similar to that of France and Germany, who officially requested Barroso to "commit" to policies which they favour. 

The major uncertainty from the summit hangs now on the timing for agreeing on Barroso's reappointment. The Czech Presidency has come up with a draft text which says that the election procedure will be launched "at a later stage". 

Technically, the discussion of Barroso's nomination is expected to take place over dinner today, in his absence. 

Prolonging the Commission's term? 

The Irish re-vote is expected to take place in October and it would be very difficult to hold it earlier due to legal requirements, Irish diplomats explained. The Commission's term ends on 1 November and the hearings to nominate new commissioners cannot take place earlier than mid-November. Therefore, under the most optimistic scenario, the new Commission could see its first day in office after the New Year, an EU ambassador said. 

The legal services of the Commission and the Council have diverging views as to the prolongation of the Commission's term. The Council is of the view that a formal decision is required, while the Commission is opposed to this and favours a speeding up of the process. Experts say there is a risk that decisions taken by the EU executive after 1 November could be challenged in courts as null and void. 

Risk factors 

Diplomats said the fact that key texts are conspicuously absent from the draft summit conclusions, especially from the 'Institutional Issues' chapter, is a risk factor. Another risk is the fact that the new Czech prime miinister, Jan Fischer, will be presiding over an EU summit for the first time, they said. 

Uncertainty on how to "brand" the legal guarantees to Ireland while dismissing certain countries' impression that a new round of ratifications is needed presents a challenge, several sources said. 

"A number of countries have reservations," the ambassador of one of the biggest EU countries said. 

Dealing with the financial crisis 

As part of efforts to put in place a new framework of macro- and micro- prudential supervision, the draft conclusions obtained by EurActiv show that EU leaders will express their support for the establishment of a European Systemic Risk Board, composed of national supervisory authorities and three new European Supervisory Authorities, aimed at safeguarding the financial soundness of financial firms and protecting consumers of financial services. Its head will come from a eurozone country and its deputy head will be from outside the eurozone, an EU diplomat said. 

Also, the summit will step up preparations for the 24-25 September G20 summit in Pittsburgh (USA), and "advance work" on building a cross-border framework for the prevention and management of financial crises. Sources said that during the general affairs and external relations (GAERC) meeting in Luxembourg at the beginning of the week, UK Foreign Minister David Miliband had expressed the view that London, where some 600 banks were concentrated, was at risk of having to bail out foreign banks. 

It is thus expected that UK Prime Minister Gordon Brown will develop his idea of "responsibility and liability coming together," a source said. 

'Summer gas crisis'

Barroso is expected to inform on the Commission's fact-finding mission in Russia and Ukraine, which dealt with the latest controversy on credit needed to buy Russian gas to fill underground storage facilities in Ukraine. Ukraine recently announced that it needed $4 billion in credits from European banks (EurActiv 17/06/09). 

A diplomat deplored the fact that the Commission had neglected to check the gas storage facilities during its missions to Russia and Ukraine last January (EurActiv 14/01/09). 

"They checked the pipelines, but not the storage, and we are unable to assess what is in there," he said. The diplomat also spoke of different estimates of the cost of the gas needed to fill the storage facilities, to ensure steady supplies to Europe in winter. 

"Russia says 2.5 billion are needed, Ukaine says five," he said, adding that part of the difference was the VAT that Kiev was hoping to collect. He added that the general feeling in EU countries was that if Brussels were to succumb to the demands, they would become recurring "every 3-6 months".