2nd Dec 2021


What sort of Union will we have in 2007?

This should be a happy time for the European Union. The great coalition of 25 nation states has just signed the treaty that will spread its bounds wider still and wider.

The accession of Bulgaria and Romania, signed this week amid modest celebration in rainy Luxembourg, will stretch the Union from the Atlantic to the Black Sea. Barring substantial backsliding in their European commitments the two states will join on 1 January 2007, bringing another 33 million citizens into the Union and tipping the centre of its interests a few miles eastwards.

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  • Failure to ratify the Constitution and to agree the next EU budget would rock the boat from both sides (Photo: Irish Presidency)

The question is what sort of Union will we have on 1 January 2007?

The date is not just that of the accession of Romania and Bulgaria, it is also the date on which the next European financial perspective will come into force. This is the framework against which the EU will set its budgets for the next seven years. Ideally it should have been settled already for planning work on the 2007 budget needs to begin soon. But it has not. Nor is there a great deal of optimism that it will be. We shall return to this in a moment.

Little interest in Romania and Bulgaria

This latest accession treaty has generated little interest in the west of the Continent. We are not being flooded with booklets inviting us to meet our new neighbours, nor are we holding Romano-Bulgarian nights. Maybe that will come later when we make the mental adjustment to talking about EU27, rather than EU25. But at the moment we are more interested in our internal problems.

Just how pressing these are was demonstrated graphically when Michel Barnier, once a pillar of the Prodi Commission but now France's foreign Minister, had to leave the Luxembourg celebrations early to attend to more pressing domestic matters, leaving the accession treaty to be signed by his deputy, Claude Haignieré. It's still France signing the treaty, he told his embarrassed guests.

The pressing matters were, of course, the referendum on the European Constitution on which French voters will give their considered verdict on 29 May. Their collective response will depend how persuasive the government and its allies on this issue can become in the next four weeks or so.

But as poll succeeds poll the probability of a 'no' vote seems ever more likely. The latest polls show a margin for the 'no's as great as 58-42 per cent. The Dutch, who will hold their own referendum just three days later, appear to be showing much the same scepticism, with similar margins stacking up against their own campaign to ratify the treaty.

A best-seller

Nor can these swings of opinion be put down to ignorance, for Le Figaro has just reported that Le Petit Guide de la Constitution européene has entered the overall French best-seller lists, just below The Da Vinci Code. The sad conclusion is that the more they learn about the treaty the less French and Dutch voters appear to like it. This is the reverse of the British situation, where sometimes we prefer to reach our opinions without the difficulty of assimilating facts.

There are still eight weeks to go before the French referendum and so nothing can be assumed. Having set Europe's hearts a-flutter, the French people may yet swing back behind President Chirac's entreaties with the Dutch following suit and then, after the summer holidays, Poland and Denmark in September. But it seems a longish shot and the political uncertainty seems likely to affect financial markets. That anyway is what the economists are telling us.

This is a good point to return to the financial perspective, which, unless settled, also threatens the stability of the markets. Bad enough for the Union to be left with constitutional egg on its face after one or more referendum failures. That would rock the boat from one side. But a failure to agree the financial perspective could upset all sorts of other calculations, particularly in the new member states, rocking the boat from the other side as well. The potential for turbulence arising out of a French 'no' vote on 29 May taken together with a failure to agree the new financial perspective at the European Council on 16 June, is substantial.

Money, money

At the heart of the financial perspective difficulty is a budgetary question. How much should the EU spend and who should pay for it? The six countries that end up putting most in - and getting (in terms of direct largesse) the least out - want to see the budget effectively limited to 1 per cent of European GNP. The Commission proposes 1.14 per cent, arguing that this is necessary to meet the costs of the European level programmes and support for the poorer parts of the Union that member states themselves have already argued for and agreed. Some of the new member states, especially, feel let down.

It falls to Mr Juncker, the Luxembourg Prime Minister who currently holds the EU Presidency, to sort out this mess, which includes the distribution of funds in a restricted budget. Addressing a European Parliament Committee this week he did not mince his words, accusing ministers in the EU's capitals of 'posturing' after they had largely rejected the compromises that he had put forward for negotiating purposes. He has about eight weeks to do so and will shortly embark on a round of tour of member states.

He will meet Tony Blair early in June implying that he assumes Mr Blair will continue to be the British Prime Minister after the General Election on 5 May, which is not unreasonable. Mr Blair, on this assumption, will also become President of the European Council on 1 July when it will be Britain's turn to take over the Presidency. Mr Blair will prefer not to inherit leftovers. He may therefore be keen to co-operate - at least up to a point.

For Mr Juncker also confided that he didn't suppose that the problem of the British budget rebate - resented by all other members of the European Council who pay for it in one way or another - would be solved 'from one day to the next' - or even at all, he might have added. A situation likely to endure unless or until the Common Agricultural Policy, out of which Britain does relatively feebly, is radically reformed something not entirely likely before 2007.

The author is editor of EuropaWorld


The views expressed in this opinion piece are the author's, not those of EUobserver.

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