The European Council summit: An early analysis

So the latest European Council ‘informal’ summit was held on Monday without too much trouble, and there were a couple of important decisions. Most importantly, all the attending countries except the United Kingdom and the Czech Republic agreed on a final text for the fiscal compact treaty. And although the major headlines have typically been along the lines of UK and Czechs refuse to join fiscal compact, they could just as well have read “25 EU members agree on fiscal compact” (to be fair, some did choose that angle), because considering how many different national interests that had to be brought in line with each other, that is actually a pretty remarkable accomplishment.

We already knew that Britain would stay out, anyway, and the Czech abstention was not unexpected, either – President Vaclav Klaus is a prominent eurosceptic, who has already said he will not sign the treaty, and there are diverging opinions in the government as well. However, Klaus’s mandate will expire in 2013, and the Czech government is keeping the door open for joining the treaty at a later date.

The treaty text, which was made public on Tuesday, doesn’t differ substantially from the latest pre-summit draft, but there are a few interesting differences. For one thing, as mentioned in the previous post, Poland disagreed on the question of participation by the non-euro countries in the summits to be held under the treaty, but apparently, a compromise deal was reached on that issue, so that according to the new Art. 12(3), those countries

“…shall participate in discussions of Euro Summit meetings concerning competitiveness for the Contracting Parties, the modification of the global architecture of the euro area and the fundamental rules that will apply to it in the future, as well as, when appropriate and at least once a year, in discussions on specific issues of implementation of this Treaty on Stability, Coordination and Governance in the Economic and Monetary Union.”

In other words, the non-euro countries will participate fully on high-level questions concerning the functioning and rules of the eurozone, while perhaps somewhat less fully on the more technical questions of how the treaty will be implemented in practice. On the other hand, the body “…charged with the preparation and follow up of the Euro Summit meetings…” is now specifically the Euro Group (Art. 12(4)).

Also, another compromise has been made regarding the payment of fines by those countries that fail to abide by the treaty’s budget limits. Originally, all fines would go to the European Stability Mechanism (one of the euro-zone bailout funds), but this has been changed (apparently on a Danish proposal) so that only euro-zone countries will pay to the ESM, which the other countries will pay their fines to the general EU budget (Art. 8(2)).

Finally, the final text assigns a somewhat greater role to the EU institutions, and especially the European Commission, than earlier drafts did. For instance, Art. 4 now mentions specifically that “[t]he existence of an excessive deficit due to the breach of the debt criterion will be decided according to the procedure set forth in Article 126 of the Treaty on the Functioning of the European Union”, which essentially means that the determination of whether a member state has exceeded the debt limit of 60% of GDP will depend on the judgement of the Council based on a report prepared by the European Commission. Technically, there’s nothing particularly novel about this, since that mechanism already exists in the Lisbon Treaty

Likewise, Art. 8(2) has been amended to state that member states may ask the Court of Justice to impose financial sanctions on other states that fail to abide by the budgetary rules “…following criteria established by the Commission in the framework of Article 260 of the Treaty on the Functioning of the European Union.” It seems that the intention of these additions is to allow the Contracting Parties to sort of indirectly draw on the authority of the European Commission by making use of provisions that already exist in the Lisbon Treaty, without offending British sensibilities too much by actually directly involving the Commission’s officials in the compact’s business.

So that is probably that – the treaty will be signed at the next formal European Council summit on March 1-2, and it seems unlikely that much, if anything, will be changed in the text as it is now before then. The one party which might make some noise about it is the European Parliament, which has been highly critical (and with good reason) of both the process of drafting the treaty and of the very limited role which Parliament will get to play in the governance of the compact; the treaty provides that the President of the Parliament may be invited to be heard at the summits (Art. 12(5)), and that a conference of representatives from the EP and the national parliaments should be established to discuss treaty-related issues, but that’s about it. On the other hand, as this is an intergovernmental treaty, there’s not much the EP can actually do about it, so it’s pretty certain that this is the text that will be signed in March.

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Norwegian butter protectionism: An update

Since my post on the butter shortage in Norway has easily become the most frequently visited one on this blog (it’s amazing how many people google for “norway butter protectionism”), I feel a certain obligation to help my readers keep a jour with this important issue. So here’s an update with some of the lastest developments:

In the first post, I speculated that the protectionism-caused butter shortage “could ruin Norway’s Christmas”. Admittedly, it seems that Christmas did in fact go reasonably well in Norway this year, all things considered, so I guess that our worst fears did not materialise on that point. Still, polls show that about 20% of Norwegians say they have been affected by the shortage – so perhaps we could argue that Christmas was 20% ruined? Hard to say.

The problems aren’t going away, however. Although the dairy cooperative/monopoly TINE originally guesstimated that the problem would be solved by January, it seems that finding a solution could now take a good deal longer – perhaps as long as well into next summer.

In addition, it appears that Norway could now also be threatened by a beef shortage because farmers are keeping more of their cattle for milk production, rather than selling them to be butchered.

So dear Norwegians: Please drop those ridiculous customs barriers and let us sell our butter and beef to you. We hate to see you suffer like this. :-(

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Countdown to Another Summit

Tomorrow (Monday 3oth), the European Council will meet again at an “informal meeting” in Brussels. This will be sort of a half-way milestone in the process that was initiated at the last formal Council summit on 8-9 December last year to find a lasting solution to the sovereign debt crisis that has been haunting Europe for the last couple of years now, and which should ideally result in the adoption of a treaty on economic stability and governance within the Eurozone (the so-called ‘fiscal compact’).

With that in mind, it’s a bit amusing to see that van Rompuy’s invitation letter spends a lot of words to emphasise how the meeting will focus on “youth unemployment, the Single Market and SMEs”, only to mention almost as an afterthought that “[w]e will also use this opportunity to endorse the ESM treaty and to register agreement on the new treaty on stability and convergence within the euro area.” It’s almost a given thing that this ‘registration of agreement’ will in fact take up the vast majority of the meeting.

So where are we at this point? Since the last summit on 8-9 December, a group of negotiators led by Council President Herman van Rompuy have been working on a draft text for the Eurozone fiscal compact treaty that is scheduled for adoption in March. The (as far as we in the public know) fourth and latest draft text of January 19th is probably the one that will be discussed at the summit, and it is not without problems.

The Polish government in particular has had some concerns about the extent to which non-Eurozone member states can expect to be involved in the future governance of the Eurozone and its new rules – the most recent draft proposes that whereas the full Eurozone members would meet in summit “when necessary, and at least twice a year” (Art. 12(2)), those other countries have ratified the treaty, but are not part of the Eurozone would be invited only “when appropriate and at least once a year” and only “to discuss specific issues concerning the implementation” of the treaty (Art. 12(6)). So we might see some wranglings over this and similar issues, but on the other hand, these are definitely questions of process, and the fact itself that they are being brought up at all would suggest that there is in fact agreement among the 26 on the general substance of the agreement.

The continuing crisis in Greece is another topic which has come back to the top of the headlines in the last couple of days, with reports that the Greek bailout could be up to €15 billion more expensive than anticipated, as well as especially the revelation by the Financial Times that the German government has proposed the appointment of a special EU commissioner who would essentially take over control of the Greek budget from the nation’s parliament – a possibly necessary, but still unprecedented infringement on the sovereignty of a member state.

There will apparently also be a telephone conference tomorrow between the ministers of finance to discuss Greece specifically, which would allow the heads of government at the European Council to focus their attention on the high-level issues. However, it’s fairly safe to assume that the Greek government will not appreciate these suggestions of being placed under administration, and could prove uncooperative at the summit – and if pushed too far, they might even come to the conclusion that the political costs of the bailout are too great (elections are planned for early April) and simply decide to enter an uncontrolled default.

Another topic which may be brought up at the summit is the proposal for an EU-wide  financial transaction tax (often incorrectly referred to as a ‘Tobin tax’), i.e. a small tax or fee on the exchange of shares, bonds and other financial instruments within the EU. However, I doubt that the FTT will be discussed on Monday, since it is highly controversial in itself, and would likely overshadow all the other important and more immediate topics.

We should probably also expect some more passive-aggressive behaviour from Cameron and Sarkozy towards each other, but I guess that’s pretty much par for the course by now.

In all seriousness, however, it will be very interesting to see how Cameron conducts himself at the summit. This will be the first high-level meeting since his veto at the last summit back in December, so the question is whether we’ll see a more conciliatory stance this time around, in an attempt to salvage some of Britain’s political capital and get at least some influence on the  or if Cameron will continue the hard-line approach. If the latter, this could turn out to be a very boring summit for him, because the other 26 will focus on their own business, and no one will be particularly interested in what he has to say. In that case, this summit would be the first in a new state of affairs in which Britain essentially finds itself reduced to the status of an observer on a core European issue; a remarkable enough event in itself, even if nothing else were to happen at the summit.

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The ultimate reply

A flying car (or "Personal Aerial Vehicle" as the engineers like to call it).

Dear readers: You know that annoying question that Euro-sceptics always like to ask? I’m talking about “What has the EU ever done for us?” And you know how it can sometimes be a bit hard to answer satisfactorily, because you’re stuck either with some really high-flying notions about peace and prosperity in Europe, or with all the technical stuff about roaming charges or airplane passenger rights and such?

Well, worry no more, because soon we may have the ultimate reply to that question: “Flying cars.”

I am not kidding: The myCopter project is a consortium between a number of German, British, French and Swiss universities and research institutions that “…aims to pave the way for PAVs to be used by the general public within the context of [a personal air transport system]”, i.e. build a flying car that won’t require a pilot’s license to use. And the project has been funded by the EU’s 7th Framework Programme, which is basically a large bank account for funding the research and development of new and innovative technologies within the Union.

So there you go: “What has the EU ever done for us, anyway?” “Flying cars.” Makes sense, doesn’t it?

(Special note to Britain: If you do withdraw from the EU, you will not get to play with our cool flying cars. I trust you will take this into consideration.)

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Hooray for News Math: 10=13

(With apologies to Tom Lehrer for the title.)

It seems that there are certain headlines, certain ideas or themes that are so compelling for some journalists that they will throw all of their critical thinking and basic research skills overboard and jump into it head first. You know the type of article I’m talking about: “Cat Called for Jury Duty” is a classic. Within hours, it’s been copy-pasted from newspaper to newspaper, even though the real story is much less interesting than it sounds (and in this case, a year late at that).

So the most recent one of these compelling headlines, appearing either yesterday or today on the joint occasion of New Year’s Day and the ongoing crisis,  appears to be some variation of “On Tenth Anniversary, Euro Sucks”. (Although for some reason, no one used that exact headline. I think it’s great.)

There are a lot of them, though. The New York Times did one: “No Fireworks for Euro as It Reaches the 10-Year Mark”. Deutsche Welle did one:  “Euro cash ‘celebrates’ tumultuous 10th anniversary”. France24 did one: “The rise and fall of the euro, ten years on”. Associated Press did one (and considering their influence probably caused the whole misunderstanding in the first place): “On 10th anniversary, euro takes blame for economy”. And so on and so forth.

So what’s the problem? Well, if there aren’t any celebrations on the anniversary, as many of the articles fasten on as a lede, that’s probably because the euro is actually thirteen years old, not ten. It was introduced as a currency on January 1, 1999. The physical coins and bank notes were released for circulation three years later, on January 1, 2002, which is of course what all these other articles are talking about. Perhaps a minor mistake, but it honestly does not inspire a lot of confidence in our news media that so many words can be written and published about the euro’s “tenth anniversary” without anyone apparently noticing.

(PS: I was tempted to classify this as a Euromyth, but it really isn’t. It’s probably more in the much broader category of ‘some journalists will copy-paste any damn thing without fact-checking’.)

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A European Annapolis Convention?

"What would Alexander Hamilton do?"

(Apologies for the number of Wikipedia links, but this topic requires a certain amount of context.)

In September 1786, a group of delegates from five of the newly-independent American states met in the city of Annapolis, Maryland, in what was then called a ‘Meeting of Commissioners to Remedy Defects of the Federal Government’. To history, it became known as the Annapolis Convention. As the contemporary name suggests, the purpose of the meeting was to examine, discuss and propose changes to the Articles of Confederation which had formed the constitutional basis for the association among the thirteen states since their de facto independence from Great Britain in 1781.

The Articles had been created as part of the somewhat ad hoc arrangements that the thirteen British colonies had started to make as the conflict with Great Britain intensified and the need for coordination and a common front among the colonies became apparent. Under the Articles, the governing body of the colonies was the Continental Congress, in which each colony was represented, and which managed affairs of mutual interest, decided on resolutions and decisions of policy – such as the Olive Branch Petition, the Declaration of Causes and, most famously, the Declaration of Independence itself – and, once war broke out, directed the war effort and international diplomacy.

However, even during the Revolutionary War, the Continental Congress was hardly a model of decisiveness or efficiency (the Continental Army under George Washington frequently had to go for months without money or supplies) and the end of the hostilities did not improve things. Under the Articles, Congress – now formally referred to as “the United States in Congress assembled” – had only limited competences, mostly over military and foreign political matters, and it lacked powers to enforce decisions even on those. Thus, even when the necessary quorum of the representatives of nine states could be gathered together, the Confederation continually found it impossible to raise the promised money from the States to service its foreign debts and meet its obligations to, in particular, the veterans of the Continental Army; its ‘Continental dollar‘ currency plunged catastrophically in value almost as soon as it was issued; and disagreements and competing economic agendas among the member states effectively made it impossible to negotiate otherwise desperately needed treaties and trade agreements with Great Britain and other European nations.

Many realised that if the defects in the system were not remedied, not only would it be harmful to the prosperity and security of the thirteen states, it could endanger the very existence of their young union and put them at the mercy of the Great Powers. As the future “Father of the Constitution” James Madison wrote of his concerns in a 1785 letter to James Monroe:

I conceive it to be of great importance that the defects of the fœderal system should be amended, not only because such amendments will make it better answer the purpose for which it was instituted, but because I apprehend danger to its very existence from a continuance of defects which expose a part if not the whole of the empire to severe distress. The suffering part, even when the minor part, can not long respect a Government which is too feeble to protect their interest; But when the suffering part come to be the major part, and they despair of seeing a protecting energy given to the General Government, from what motives is their allegiance to be any longer expected. [Letter to James Monroe, Aug. 7th, 1785]

Out of these fears over the future of the ‘American project’, as it were, the Annapolis Convention was convened and attended by, in addition to John Madison, several other prominent Founding Fathers such as Edmund Randolph, Alexander Hamilton and John Dickinson. While the Annapolis Convention did not itself make any decisions due to the low number of states represented (only five states had sent commissioners), it was significant in that it published a very significant report that identified the major shortcomings of the Articles and called for another convention to be held in Philadelphia the following year. And at this much more famous Philadelphia Convention, the Articles of Confederation were finally resigned to the dustbin of history and replaced with the Constitution that established the ‘real’ United States of America, and which still essentially forms the basis of the American federal system to this day (although with a number of amendments and 220 years’ worth of Supreme Court interpretation).

So far, so good. But why are we talking about this, again?

The European Union is in my view presently in a situation that (while there are of course numerous differences) is at least analogous to that of the United States under the Articles of Confederation. Much like the Confederation, the EU consists of a number of member states bound together in a political system that more than anything has grown organically over the years, as much in response to specific problems as according to a general vision or plan, but which has also been severely limited by a chronic reluctance on the part of those same member states who were afraid to give up too much of their sovereignty.

And like the Continental Congress in its time, the EU is now facing a situation for which the available instruments of government are simply inadequate. For the Confederation, it was the Annapolis Convention that more than anything crystallised the shortcomings of the Articles in the minds of the public and the politicians and made possible the process that ended with the final adoption of the United States Constitution three years later. And in much the same way, I think the meeting of the European Council that took place on December 8-9 this year will prove to be a similarly defining moment in the process of European integration. More than anything, the British veto highlighted the shortcomings of the present system and traditions and may have created an awareness that a significantly different system is called for if we are to find the way out of the present crisis.

In the United States, it took less than two years from the Annapolis Convention in September 1786 to the final ratification of the new Constitution in June 1788. It will take much longer in Europe. But the Union has nevertheless been launched on a new trajectory which will hopefully in the end lead to a more deeply integrated, better functioning and more prosperous Europe.

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Great video… or *greatest* video?

So the technical quality is not the best – but seriously, if this is not the greatest thing ever, it’s definitely somewhere in the top 20.

(From the Council of Europe website. Apparently produced by the CoE Information Office in Azerbaijan, but I can’t quite find out who actually made it.)

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