Sunday

31st May 2020

Opinion

Win or lose this constitution, we must be pragmatic on the budget

Whatever opponents of eventual Turkish accession may think, last night's European Cup Final in Istanbul, between Liverpool FC and AC Milan, underlined Turkey's obvious place in the European family of nations.

Indeed, someone might write, if they haven't already done so, a thesis on the effect of international football on the European construction. Such opponents of Turkish entry include many who are opposed to the new European Union Constitution, as well as supporters such as former President Giscard D'Estaing and Angela Merkel, the leader of Germany's centre-right CDU.

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Those who do not follow football may need to be reminded that at half-time Liverpool were losing by 3 goals to nil, which in footballing terms is as good an indicator of defeat as being an average of 8 points down in a referendum campaign for two or three months. Nevertheless, against all expectations, Liverpool went on to win the game, adding another datum to the recent hypothesis that the team playing in red has a statistical advantage.

Until someone is pronounced dead, they are still alive

Whether Giscard and other French defenders of the European Constitution will be encouraged by Liverpool's late swing on the pendulum of fate, I cannot tell. But I do not think that the result of this Sunday's French referendum is necessarily a foregone conclusion. I tend to share the assertion of the lugubrious French Prime Minister, Jean-Pierre Raffarin, to the effect that until someone is pronounced dead they are still alive, although even this is a little too defeatist for my taste.

I certainly do not share the reported view of Nicolas Sarkozy, the leader of the majority UMP, to the effect that the only question now is whether the 'no' is going to be big or small. At the time of writing there are still two full campaigning days to go. Moreover, there are considerable numbers of 'soft' votes in the 'no' camp and large numbers of undecided. It is not too late for president Jacques Chirac to emulate Liverpool and pull off an improbable victory.

Should there be such voters among readers of this column - I offer two suggestions. First, as three-quarters of the Constitution (the 'tidied-up' existing treaties) is already ratified and in force, you should make sure that you are not trying to reject agreements -like free markets - that have already been made and which will not be changed by a 'no' vote.

A No would mean a decline in French influence

Secondly, voting 'no' will, in effect, decrease French influence in the European Council from 13.35 per cent of the votes to only 9 per cent (the level set by the existing Nice Treaty), a decline in French influence in the Council of a third. At the same time, rejecting the Constitution would see the votes of the EU's six founding member states cut from 50 per cent to only 36 per cent - a decrease of more than a quarter.

Giscard D'Estaing is the undisputed father of the European Constitution and a professional Grand Old Man. He sees himself as the first full-time President of the European Council, a job which that document, quite sensibly, created. Whether an octogenarian should hold such an important and demanding post is, of course, moot.

The job was not designed as some species of European constitutional monarchy and I would not judge that Giscard's chances of securing it were particularly high. Especially so, if Tony Blair should be looking for what used to be called 'a situation' once he has beaten Mrs Thatcher's prime ministerial record of 11 years.

But life will go on

If there is a French 'no,' it will indeed be a sad day for Europe and a sad day for France. But it will not be the end, whatever people like Giscard may try to prove to the contrary. Life (on the basis of the existing treaties) will go on, whatever evidence there may be to the contrary. It always does.

In the mean time, how the French vote on 29 May and the Dutch three days later, will have little effect on the mounting difficulties over the European Union budget - or 'financial perspective 2007-2013' - to give it its proper title. These difficulties, in the short term at least, threaten to unleash consequences, including economic disruption, every bit as serious as a negative vote in the French referendum.

In the proper scheme of things the budget should have already been settled by now, but with every discussion the disagreements are widening rather than narrowing and bonhomie is lacking. There are three broad issues in play: how much should the EU be spending? (and therefore what bills will the net contributing member states like Germany have to face?); how much of this largesse should member states receive and for what? And whether Britain should continue to receive a rebate, worth currently about 4.5 billion euros annually, but which could double by 2013? More for Britain just means less for everyone else.

At its heart the problem is that contributors are unwilling to supply sufficient funds to keep the old beneficiary states - like Spain and Ireland - in the manner to which they have become accustomed and which new member states, like Poland (and the soon to be arriving Bulgaria and Romania), are expecting. Meanwhile Britain - while still a net contributor - appears to others to be siphoning off via the rebate a volume of funding no longer justified by economic circumstances. But Britain will veto any attempt to remove it.

Intractable budget mazes

Having lost important regional elections, the German Chancellor, Gerhard Schroeder, has called a general election for the autumn in which, almost certainly, he will face Angela Merkel, the leader of Germany's principal centre-right party. As the biggest contributor to the EU coffers, Shroeder is unlikely to be in a mood for budget compromise this side of the election. Besides being a sceptic on Turkey, Angela Merkel also wants to keep tight hold of the purse strings. She has been described as a German Mrs Thatcher. If she wins the election, which current polls - and indeed results - suggest likely, she will be a major influence in the European Council at the very moment when the Turkish accession negotiations are due to begin.

Chairing the Council will be Britain's Tony Blair. Assuming no budget agreement next month, this grave financial problem will fall to Britain, which will take over the EU Presidency from Luxembourg at the beginning of July. At the same time Britain will be picking up the pieces - if the cookie has indeed crumbled that way - of the Constitution - and kicking off the Turkish negotiations. British pragmatism will have to be on its best mettle to find a way through all these intractable mazes.

As to the budget, I have long thought the solution to providing support for infrastructure investment in the new member states was by borrowing. It is what is needed to square the circle. True the treaties (both old and new) say the EU should run a balanced budget. But if the British Attorney General can give an opinion to the effect that the Iraq was legal, then I'm sure he can find a way around a far more mundane legal difficulty. It's what being pragmatic is all about.

The author is editor of EuropaWorld

Disclaimer

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

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