The Brussels European Council – Changing gear while marking time

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The Brussels European Council did not prove to be an historic, decision-making gathering of EU leaders. At the same time, it did mark a significant changing of gear by the EU on the most important challenges with which it is faced – economic, defence and constitutional.

The Brussels European Council did not prove to be an historic, decision-making gathering of European Union leaders. It was never going to be that. But critics who complain that the summit did little more than mark time and mainly consisted of a reiteration by national governments of already known positions on a wide range of policy issues, miss the point. The Brussels summit did mark a significant changing of gear by the European Union on the most important challenges with which it is faced – economic, defence and constitutional.

Summary

1. There was a perceptible closing of differences on some of the most intractable problems threatening an agreement at the end of the year on a new EU Constitutional Treaty.

2. There was important new evidence of political will by the British, French and Germans to try to resolve their disagreements on the creation of a credible, autonomous European military/security capacity – not in conflict with, but in partnership with NATO. Meeting this week will be crucial in determining British support for EU security and defence policy.

3. There was a new sense of urgency about the economic challenges facing the EU if it is to achieve faster growth, improved global competitiveness, social cohesion and environmental sustainability. The way has been prepared for a new “Growth Initiative”, including a “Quick Start” programme of infrastructure and research projects, to be unveiled at the next European Council in December.

4. The EU leaders issued a direct call to their government ministerial colleagues to accelerate long promised progress on implementing a common EU migration policy and strengthening police, customs and judicial cooperation in the fight against international crime and terrorism.

Towards a constitutional Treaty of Rome

There were no serious negotiations on the details of the planned new constitutional treaty at the Brussels European Council. Indeed at the start there was some criticism from some leaders – notably Jean-Claude Juncker of Luxembourg and the European Commissioner, Michel Barnier – that the process was still stuck with governments not willing to move beyond repeated declarations of what they wanted and what they did not want. The Swedish Prime Minister, Goran Persson, even predicted that there would not be enough time to conclude the terms of the constitutional treaty by the end of the year – thus passing the responsibility onto the Irish Presidency next year.

But others drew encouragement from evidence that – with a few exceptions – EU leaders seem ready to hammer out a compromise in the weeks ahead. The Portuguese Prime Minister, Jose Durao Barroso, implied the IGC was doomed to succeed. “It will be a tough negotiation but there is a good spirit. As always, at the end, we will find an agreement,” he said at the end.

The Italian Presidency also seemed confident that the eventual treaty would reflect in almost all its essentials the draft which had been so painstakingly negotiated by the Convention on the Future of Europe over the past 18 months. Participants in the meeting of center-right heads of government in Brussels on Wednesday also reported an evident willingness to compromise – not excluding the Spanish Prime Minister, Jose Maria Aznar.

It has been the insistence of Spain and Poland to be given the same voting rights in the Council of Ministers as had been agreed at the Nice summit in 2001 which has posed the biggest threat to a consensus in the intergovernmental conference charged with finalizing the treaty. While Mr Aznar said that he remained to be convinced that the Nice settlement should be changed, he added “Nice is not the bible.” Rumours that Spain might be ready to compromise caused evident alarm among Polish government leaders who anxiously sought (and claimed to hav e received) assurances from Madrid that they were not going to be left isolated.

For his part – predictably perhaps – the President of the European Council, Silvio Berlusconi, was upbeat about progress being made behind the scenes. He even claimed “unanimous support” for the objective of creating “an adequate and appropriate European defence and security policy.” He felt confident enough to declare there was an emerging will to “make little sacrifices because there is a common interest which is above our little national interests.”

At the end of the meeting this view found cautious support among the great majority of the delegations. Everything now depends on how the Italian Presidency handles the next crucial stage of the negotiations. After a period of intense bilateral contacts with all 25 Member States, the Presidency will prepare a comprehensive text by the end of November. This will be based on the lines of the Convention conclusions but will also propose changes or clarifications where these appear justified and likely to command consensus.

The final stage will culminate in the December European Council where, it is hoped, the last remaining problems can be resolved. Almost certainly these will include the Polish/Spanish demand on increased voting powers in the Council of Ministers. But there was a growing conviction “in the corridors” of the Brussels summit that it might be possible to meet at least some of Spain’s concerns by increasing its representation in the European Parliament as well as in other – more indirect ways – involving the future pattern of EU spending policies.

There is little support for increasing the threshold for decisions based on Qualified Majority Voting from the present arrangements where there should be a majority of governments representing 60% of the EU population. “We do not want to do anything to make QMV decisions more difficult,” the President of the European Parliament, Pat Cox, declared. However he also warned that tampering with the delicate balance of European Parliament representation also carried risks. Other leaders said that increasing the demographic threshold for majority voting to more than 60% would be – in the words of the Belgian Prime minister, Guy Verhofstadt – “unacceptable.”

There appeared to be a widespread acceptance that, at the end of the day, the principle – that each Member State would have a member of the European Commission – would eventually be conceded. In this respect, support for the Convention’s conclusions based on a two-tier Commission with only a minority having full voting rights, appears to be ebbing. The German government has raised the prospect that if there are as many Commissioners as Member States then the large countries should keep their entitlement to two Commissioners.

Others have recently proposed a complex system of rotation which would ensure that – over time – all countries have an opportunity to have a Commissioner. But the longer term political logic seems to point towards the creation of an “inner cabinet” within the Commission made up of the future President, who will have significantly increased quasi-prime ministerial powers, and the key vice-Presidents, but with all members of the College retaining an equal vote on key issues, particularly on legislative proposals, legal action against Member States and external Treaties.

During the discussion on the Constitutional Treaty a surprising number of leaders appeared to accept that important strategic policies – enshrined in Part 3 of the draft – should not be subject to the same unduly heavy process of ratification when changes have to be made. But this still falls short of a break in the system of unanimity for deciding future constitutional amendments. Indeed the present draft Treaty does not yet include a clear cut and timed review clause.

The Italian Presidency also claimed that the British government now appeared read y to accept the idea of a “double hatted” European foreign minister who would also be a Vice-President of the European Commission. But the precise mandate of the foreign minister and the location of the new European diplomatic service – comprising both Commission officials and diplomats from Member States – remains unclear.

Defining a common European Security and Defence Policy

Some of the increased optimism displayed about future progress in the IGC also reflected some perceived narrowing of differences between Britain, France and Germany about a European security and defence policy. There had been reports of a shift in the UK position towards accepting that the EU needed to have its own military/security capacity after Prime Minister Tony Blair met last month in Berlin with Chancellor Gerhard Schroeder and President Jacques Chirac. At the same time Paris and Berlin have made it clear that the new security and defence arrangements will be open to all Member States and that the EU will maintain a political overview.

It seems that the British do now accept the principle of “enhanced cooperation” among willing EU states to implement a European security and defence policy. This has in the past few days given rise to alarm and some criticism from the Bush Administration about a potential threat to the primary defence role of NATO. This was vigorously denied by Mr Blair who said that any future action by the EU would be taken only after close contact with NATO. He emphasised however, that the EU did need a capacity “to act independently.”

Important difficulties remain over both the scope of any future EU security and defence planning function and especially in regard to any operational military common and control headquarters which might be created. The British insist these must not compete with existing NATO structures and it seems unlikely now that a full scale European Union military HQ will be created. However a detailed analysis of the way existing European national military command and control headquarters might be linked to forge “a virtual EU military HQ” is going ahead.

This whole issue will be fully discussed when NATO ambassadors meet in Brussels today (Monday, October 20) to hear about US fears and criticism of the potential divergence of the alliance and the Union. Last Wednesday the US ambassador to NATO, Nicholas Burns, described the European initiative as the “most serious threat to the future of NATO.” On Tuesday senior officials from the British, French and German governments will try to hammer out the practical details of how the new EU military structures might work. The outcome will be crucial in determining whether the British government signs on to the Franco/German/Belgian initiative.

If the UK does agree to join the EU security and defence arrangements, Italy too seems certain to join while the Netherlands, Spain and maybe Denmark are considered likely to follow. At the end of the European Council, President Chirac acknowledged that “our British friends have some remaining difficulties” with the Franco/German/Belgian plan but he insisted that it would be open to all EU states to join and that it would be “completely in keeping with our commitments to NATO.” But while the UK has accepted a solidarity clause in the Treaty obliging Member States to come to each other’s support over terrorist and other security threats, London remains sceptical about any formal commitment to mutual defence – which they insist must remain a matter for NATO’s Treaty of Washington.

Action to boost Europe’s “fragile” recovery

In a sobering reflection of the concern over the European Union’s weak economy, a major part of the Brussels summit conclusions were taken up with different aspects of the ailing process of economic reform. While the Heads of Government acknowledged that “some positive signs” of economic recovery are emerging, th ey underlined the fragility of that recovery. Once again the European Council stressed the importance of boosting Europe’s economic infrastructure and above all its human capital – through innovation, research development and skills.

In some ways the conclusions of the Brussels meeting anticipate the annual review of progress made in achieving the Lisbon goals of economic reform, social cohesion and environmental sustainability which is due under the Irish EU Presidency next spring. However the summit communiqué places greater emphasis than before on the importance of addressing the specific needs of industrial, and especially, manufacturing sectors. In the case of industry the message seems to be that greater attention must be paid to “a comprehensive impact assessment” when regulation is being debated for sectors such as chemicals.

Most debate at the summit focused on what precise steps should be taken – at the next summit in two months time – to boost growth. The Commission President, Romano Prodi, said that the Commission would now prepare a proposal for “a quick-start programme” of projects to boost economic growth. These will include Trans-European transport, energy and telecommunication infrastructure projects as well as increased investment in research infrastructure, science parks, industrial innovation, information and communication technologies and education and training facilities.

The euro 40 billion programme to 2010, which will involve EU funds, European Investment Bank’s Structured Finance Facility and private sector investment, will be examined in detail by the Council of economic and finance ministers next month before the December summit gives its final approval. However at the Brussels summit there was an unspoken question mark over whether the resources really exist for the priority projects – already identified in the report of the committee headed by the former Commissioner Karel van Miert – to become reality.  

Within the Commission it is no secret that there are doubts about the availability of funding. Some officials believe that to be viable many of the major projects will require much greater public sector investment but that this is made more difficult by the constraints of government budgets imposed by the euro Stability and Growth Pact. They believe that public investment by Member States to realize the Growth Initiative should not be counted against their overall budget deficits.

There appears to be little support for this as yet among national governments. The Italian Finance Minister, Giulio Tremonti, insisted at the end of the Brussels summit that the new strategy to boost growth and pursue the goals of the Lisbon Process on economic reform would be “consistent” with the Pact. However a major study is underway by Eurostat – the statistics arm of the Commission – into the possible impact of the planned European System of Accounts on the Growth Initiative. There is some concern that the liabilities on governments arising from public/private partnerships might make it more difficult to stay within the Stability and Growth Pact budget limits, especially in countries where the full costs of multi-annual programmes have to be “written off” in one financial year.

There was no discussion of either the future of the Stability and Growth Pact or the economic implications for the growing strength of the euro on world financial markets. However the fact that Chancellor Schroeder entrusted President Chirac to speak for Germany on the second day of the summit (so he could ensure safe passage of his economic reform legislation through the Bundestag in Berlin) led to some waspish comments from other EU leaders. Luxembourg’s Jean-Claude Juncker said that it was appropriate for France to speak for Germany because “both have similar problems explaining why they are breaking the terms of the stability pact.”

The summit also reiterated the necessity of enhancing th e competitiveness of the European economy. For the first time EU leaders – with an eye on competition from Asia as much as from the United States – said that action would also have to be taken at the December European Council to confront the danger of “de-industrialisation.” Once again national governments were abjured to convert their commitments to complete the single market, into concrete action.

The review of the Lisbon process due next spring was also in measure anticipated when the Brussels summit appealed for greater efforts to benchmark best practice in boosting public/private investment in R & D and in implementing the e-Europe Action Plan. Priority will also be given to “more effective regulation” in order to strengthen competitiveness, business confidence and improved standards of public service.

This is balanced with a commitment to ensure that competitiveness goes “hand in hand with effective social policies, and in particular job creation…” Particular importance is given to reform of the pensions system. On sustainability the summit insists that: “Further action to enhance environmental protection and sustainability will contribute to boosting growth.”

Migration, freedom, security and justice

Reaffirming their “top political priority ascribed to the issue of migration”, the EU Heads of Government made it clear that they will want to see “a common return policy” for illegal immigrants with a report early next year identifying measures to implement this policy. They also look to the Commission to come up with urgent proposals on how to spend the earmarked euro 140 million for the period 2004-2006 to support the management of the enlarged EU’s external borders and the implementation of the return action programme.

The summit also gave a welcoming green light to the Commission’s intention to propose a Border Management Agency to strengthen operation cooperation between Member States in the management of the Union’s external borders. The European Council “noted” the Commission’s plans to study the relationship between legal and illegal immigration.

The Italian Presidency’s hopes that the summit would explicitly welcome a Commission study being carried out into the feasibility of setting EU level quotas for legal immigrants, were not realized. But the study – which was approved at an informal meeting of Justice Ministers earlier in the year – will be completed by the Commission next spring. Commissioner Antonio Vitorino has said that having such a common quota policy would make it easier for the EU to negotiate “readmission” agreements with third countries covering illegal immigrants. The European Council also asked Justice Ministers to approve by the end of this year two Commission proposals for the introduction of “biometric identifiers” in visas, residence permits and passports.

Foreign policy declarations

The summit communiqué spells out the alarm felt by EU leaders at the worsening crisis in the Middle East. While welcoming the UN Security Council vote on the planned return of power to the Iraqi people, the European Council condemned both “vile terrorist acts” in the conflict between Israel and the Palestinians and called for restraint from the Israeli government. It also expressed concern about the route marked for the so-called Israeli security fence being built in the Occupied West Bank. A draft statement condemning allegedly anti-semitic remarks made by the Malaysian Prime Minister, Dr Mahathir Mohamad, was not included in the final communiqué.

Concern was also expressed at Iran’s nuclear programme but said that the European Union remained “ready to explore ways to develop a wider cooperation with Iran. The foreign ministers of France, Germany and the United Kingdom will travel to Tehran to discuss both Iran’s cooperation with the International Atomic Energy Authority investigation into its nuclear programme and how such wider cooperation might be pursued.


John Palmer, EPC Political Director, reports from the summit meeting of European leaders in Brussels.

For more analyses on this and other topics, visit the

EPC website.  

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