After the Failure of the Constitutional Treaty Negotiations: New Directions for European Integration

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

This is a report on the outcome of the European Council Summit of 12-13 December 2003 by the Political Director of the European Policy Centre.

After the Failure of the Constitutional Treaty Negotiations: New Directions for European Integration?

The failure of the Intergovernmental Conference to agree a new European Union Constitutional Treaty at the weekend may prove to be as “historical” in its way as any of the successful outcomes of negotiations on past EU treaties. The impasse over key aspects of the new constitution – notably the voting power Member States should exercise in the Council – may reflect the limits of how far European integration can be achieved among all 25 countries, at least for some time to come.

At the heart of the dispute was the insistence by Poland and Spain that the number of votes they were allotted in the Treaty of Nice three years ago could not be reduced, even though this would give them near parity with Germany which has double their population size. The talks collapsed when Poland refused a final compromise offer put forward by the Italian Prime Minister, Silvio Berlusconi, who presided over the summit, which would have extended their Nice Treaty voting weight to 2014.

There had been signs that the Spanish Prime Minister, Jose-Maria Aznar, might have settled at that point. However, at the end of the summit, Mr Berlusconi admitted: “Sadly the disagreement was total when we moved to the voting system. The positions were so far apart they did not allow any hope of agreement.” For his part the Polish Foreign Minister, Wlodzimierz Cimoszewicz, said that in any future resumed negotiations “we are talking about compromise or domination.”

A number of governments said that progress had been made in closing differences on more than 80 points of contention – other than the voting powers. However nothing can be regarded as legally “banked” and the Commission President, Romano Prodi, said that the Convention draft text remained the basis for any eventual agreement.”

Contrary to what might be supposed, there was little sense of real crisis in the aftermath of the collapse of the treaty negotiations. Rather there was a sense that the search was now on to explore new avenues to advance the integration process as the Union continues to grow over the next decade from 25 to 30 or more Member States. These will almost certainly involve some kind of “two speed Europe” with one or more core group of countries moving ahead to integrate among themselves further and faster than all the 25 may be ready to accept.

The first indication of the shape of the future came during the Brussels summit with news of an agreement of a “structured cooperation” on defence between France, Germany and the United Kingdom. Furthermore, in a declaration expected to be published on Monday or Tuesday of this week, France and Germany plan to declare their intent to pursue integration on a range of other issues with like-minded Member States. Belgium, Luxembourg, Greece and Hungary are among those expected to join in the declaration but indications are that Italy and the Netherlands may do so as well.

Neither Chancellor Gerhard Schroeder of Germany nor President Jacques Chirac of France made any attempt to disguise their ambition to forge ahead with plans for an EU “hard core”. Indeed President Chirac indicated that, following the successful launch of the defence initiative, the next area where the vanguard countries would begin to integrate their national policies and institutions was justice, police and internal security. There are fewer signs of a consensus about a hard core moving ahead with economic integration

In the meantime the incoming Irish Presidency of the EU has been asked to begin consultations on how to break the deadlock over the provisions of the Constitutional Treaty – most obviously on the distribution of Council votes. But few believe the crisis will be resolved much before the end of the Dutch EU Presidency in the second half of the year and some expect no conclusion before 2005. However, much will depend on whether attitudes in Poland and Spain evolve over the next few months which will see an election and a new prime minister in Madrid, following Mr Aznar’s retirement, and possible changes in the Polish political leadership.

Avoiding the blame game

In the immediate aftermath of the collapse of the treaty negotiations there was a concerted – but not entirely successful – effort to avoid apportioning blame for the failure. While “understanding” of the rigid Polish/Spanish insistence on holding to the distribution of votes agreed in the largely discredited Nice Treaty was expressed by Mr Berlusconi, and the British Prime Minister, Tony Blair, others were less charitable. Chancellor Schroeder said the lesson that “European interests should come before national interests” was not yet universally understood. Klaus Haensch, a leading German Member of the European Parliament said that “Poland and Spain have shown that they are not at the level of European history.”

Although Mr Blair in particular paid tribute to the “heroic efforts” of the Italian Presidency to broker a deal, others were bitterly critical about the confusing negotiating tactics pursued by Mr Berlusconi. In particular the critics complained that the Italian Presidency had not come forward with a comprehensive proposal covering all the disputed issues. However at one point the Italian chair of the summit was only prevented from putting forward a compromise proposal on all the non-Council voting questions – which would have further weakened the draft treaty agreed by the Convention – because of protests by the Secretariat of the Council of Ministers.

“He would have given away a great deal of what is at the heart of the Convention draft without any sign of a meeting of minds on the distribution of votes,” one senior Commission official observed. Others criticised Mr Berlusconi’s idiosyncratic approach including his proposal during the lunch of heads of government and foreign ministers (including a number of women ministers) on Friday that “we can talk about football and women.”

There had been discussion of possible changes to the Convention’s proposals that future majorities for Council decisions should be on the basis of 50 per cent of Member States representing 60 per cent of the total EU population. But Germany, France, Belgium and others made it clear that they would not tolerate concessions which further embedded the powers of blocking minorities in the future EU decision-making system.

To be fair, the Italian Presidency’s job was made none the easier by the insistence of a number of other countries to hold dogmatically to their “red lines” on negotiating issues. This led to a reportedly abrasive exchange at one point between Mr Blair and both President Chirac and Chancellor Schroeder. They insisted that if there was to be a compromise agreement, then Britain as well as others would have to abandon at least one of its red lines involving maintenance of the British veto over tax, social security, foreign and defence policy. There is no doubt that British diplomats feared they would come under irresistible pressure to give some ground on at least one of these policy “no go areas” once the stand off with Poland and Spain was resolved.

In reality there was no clear division among the summiteers between “good guys and bad guys.” The French and German governments have without question lost a significant element of moral and political authority as potential leaders of the European integration process by their actions in forcing the suspension of the euro Stability and Growth Pact disciplines. Moreover the majority of small EU Member States displayed a limited understanding of the real role of the European Commission in insisting that every country must have a Commissioner of their own even though that will weaken the effectiveness of the Commissi on in a Union or 25+.

Although the President of the European Parliament, Pat Cox, insisted that the breakdown was “a set back – not a catastrophe”, he and other European Parliamentarians had earlier expressed concern that proposals by EU finance ministers would have weakened the Italian Presidency’s compromise over who has the final say in approving the EU budget. If the ministers had got their way, the European Parliament might have ended up with less democratic control of the budget than they currently exercise. That might have led to a refusal by the European Parliament to recommend ratification.

Further widening before deepening

The question will inevitably now be asked as to whether the suspension of the Constitutional Treaty negotiations does not mask a broader and more systemic weakening of the integration cause in the new, enlarged Union. The summit crisis needs to be seen against the background of falling public support for the Union and for enlargement (as most recently reported by the EU’s own Eurobarometer opinion poll) and in the context of the feeble and vulnerable recovery of the EU economy.

From the beginning, the political gamble was that the European Union would be able to match its commitment to a breathtaking “widening” with a comparable political and institutional “deepening.” The events of the weekend, coming on the heels of the demoralising split among EU Member States over what attitude to take to the United States’ invasion of Iraq and a clear loss of direction over the core issues of economic integration – including the single currency disciplines, suggest that deepening will continue to lag behind widening.

The Brussels summit – it should be noted – sent a clear signal of support for the ambitions of both Bulgaria and Romania to become members of the Union by January 2007 albeit with the proviso that “they are ready.” Croatia has already made public its desire to catch up with the western Balkan countries’ timetable while Macedonia is expected to follow up with a membership bid of its own early in the New Year.

The European Council also agreed a carefully worded text to encourage the Islamic democratic reform government in Ankara to keep up recent progress on political, human rights and economic reform. The achievements of the Turkish government in meeting the “Copenhagen” criteria on democratic reform were acknowledged as well as Ankara’s willingness to cooperate in finding a political solution to enable all of Cyprus to join the EU next May.

While the EU heads of government were careful to demand further concrete evidence on the ground of reform in areas such as the rights of Turkey’s Kurdish minority and other fundamental freedoms, the odds on a favourable decision being taken by the European Council next December to begin membership negotiations with Turkey may be shortening. Much will depend on what happens in Cyprus after this weekend’s elections in the Turkish north of the island and in the wider process to bring the Turkish military under full democratic control.

Given that the institutional provisions of the Nice Treaty will continue to run until 2009 – even if a new Constitutional Treaty can be successfully concluded in the coming year – the reality is that the widening of the Union will continue to outstrip its further integration. By the end of the decade it is not fanciful to foresee the European Union well down the road to a membership of well over 30 states – possibly including Turkey.

Positive moves on foreign, security and defence policy

Ironically foreign, security and defence policy (CFSP/ESPD) may prove to be one important counter trend to the wider ebbing of the integrationist tide. The Brussels summit enthusiastically endorsed the revised European Union security strategy put forward by the High Representative, Javier Solana. At the same time the Union has nailed its colours to the mast of “effective global multilateralism” with a reformed United Nations at it heart. The two policies mark out clear elements of divergence from the policies of the current United States administration – even while acknowledging the primary importance of the trans-Atlantic partnership.

With the agreement on an EU arms agency along with the French/German/British led drive for a European Union defence force which will include an embryonic military planning staff attached to the Council of Ministers as well as to NATO military headquarters, CFSP and ESPD are providing an important impetus to a clearer collective definition of the European Union’s global role. The more this develops the more powerful the arguments will become not only for the creation of a European Union foreign minister (now on hold) but also for some move towards qualified majority voting on foreign policy (if not on defence matters).

The seemingly reluctant acceptance by the United States of the tripartite agreement on enhanced European defence cooperation leaves open the long-term question of the relationship between NATO and the Union. For some considerable time, the EU will only be capable of undertaking relatively modest security and other military commitments. However the Brussels summit confirmed the Union’s willingness to take over responsibility from NATO for peacekeeping in Bosnia – with military assets provided by the alliance.

It is clear that the EU will now make a major effort to improve trans-Atlantic relations, although the summit mood on this issue was not helped by the US Pentagon’s pointed exclusion of France and Germany from eligibility for contracts in the re-construction of Iraq. The extent to which differences over Iraq will be affected by the capture of Saddam Hussein remains to be seen. Inevitably, the closer we get to the US Presidential election next autumn, the more the stark differences over US global strategy between President Bush and his most important Democratic rivals will influence EU attitudes.

Prospects for economic growth and reform 

The Brussels European Council ratified the European Action for Growth including a €62 billion infrastructure and research investment programme over the next three years. Although the initiative was applauded as a contribution to stimulating growth and employment, it is smaller than the total of €220 billion originally proposed and the main impact of what has been agreed will not be felt for some years.

Looking to the future, the European Council is giving priority to ways of increasing the extent to which public sector funding should be able to unlock parallel private sector investment through the European Investment Bank. In one passage which is bound to be studied particularly closely, the summit communiqué highlights the development of “Securitisation Trusts” and “… within the limits of the Bank’s statutes and subject to Eurostat rules work with the Member States as they seek to mobilise resources by bringing infrastructure assets to the market.”

The incoming Irish Presidency was given a clear mandate to review – together with the Commission – “proposals having a significant impact on competitiveness or creating excessive burdens for certain sectors of industry.” This raises the wider question of what the appropriate regulatory balance should be between the different objectives set out in the Lisbon economic reform process: competitiveness, social cohesion and environmental sustainability.”

The EU heads of government gave their blessing to the Task Force report, chaired by the former Dutch Prime Minister, Wim Kok, on “Creating more employment in Europe.” Four “essential requirements” on any future jobs strategy are identified:

  • increasing adaptability of workers;
  • attracting more people to the labour market;
  • more effective investment in human capital;
  • en suring effective implementation of reforms through better governance.

The Irish government has already made it clear that a review and refocusing of the Lisbon process will be perhaps the overarching priority for its Presidency. Considerable efforts are being made to clear the spring European Council in March of any issues which might divert the attention of the EU leaders from a stock-taking of the strategy to make the European Union the most globally competitive, knowledge-based, economy by 2010. This reinforces the probability that the Irish Presidency will do little more than report on the preliminary contact of an eventual renewal of the Constitutional Treaty negotiations at the March summit.

Although there were reports that EU finance ministers, who were present at the summit, might begin a debate on possible future reform of the euro Stability and Growth Pact, seemingly there were no formal discussions on any substantial issues. However both the Commission and the Economic and Monetary Committee is believed already to be engaged in a review of how the terms of the Pact might be best developed to reinforce economic recovery.

Freedom, security and justice

Although the negotiations on the Treaty were aborted, there was evidence during the summit of a weakening of the Convention’s draft provisions covering future EU decision-making in Justice and Home Affairs. Among the potential moves to weaken the draft were proposals to give members of the European Council veto rights over criminal justice cooperation, minimum rules to facilitate mutual recognition of criminal laws and aspects of justice/police cooperation. There was also pressure to limit the remit of the EU public prosecutor to the protection of the financial interests of the Union.

However, the summit separately called on Justice Ministers to finish their examination of the proposed European Agency for the management of cooperation at the Union’s external borders so that it can become operational by January 2005. The European Council also wants to accelerate the introduction of “biometric identifiers” in passports and the development of a Visa Information System. It also noted the “persisting political obstacles” in the way of directives on a common asylum policy.

John Palmer is Political Director of the European Policy Centre.

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