CC / Flickr - BY-NC-ND 2.0 - Number 10

TODAY’S MEETING of European leaders in Brussels is going to be a bumpy one. Last month, French President Nicolas Sarkozy had a “violent” row with Commission President José Manuel Barroso – an encounter that no-doubt soured relations between France and the Commission (indeed, tempers have recently threatened to flare up again). The controversial issue of treaty reform is not officially on the agenda (PDF), but this will most certainly be the biggest battle of the day. There is, however, also the contentious issue of a rise in the EU’s budget to be discussed.

Van Rompuy will present the findings of his taskforce on EU economic governance (which – as I wrote about earlier – are more subtle than widely reported). It’s not entirely true to say that the recommendations have been “watered-down” by Franco-German interference. Yes, the “corrective” part of the new rules will be “semi-automatic” (i.e. sanctions will apply unless overturned by qualified majority in the Council), but the earlier – and, arguably, more important – “preventative”  part of the pact will still be automatic (and sanctions can be applied in as little as three months for the most serious cases).

As for treaty reform, various options are on the table. Cameron will probably be able to avoid calling a referendum in Britain because the UK has an opt-out from the sanctions regime. However, Ireland will be under great pressure to put any changes to the public first. Therefore, some are suggesting reform could be sneaked into the treaties via technical obfuscation (so-called “treaty change-lite”). This would avoid the need for referenda, but might also force Germany to abandon some of her more extreme demands (such as the suspension of voting rights for those states that break the rules).

The second storm-front (also not officially on the agenda) involves next year’s proposed EU budget hike of 6%. David Cameron has vowed to “freeze or cut” the budget, but he needs the support of a majority of the Council to make this happen. The Financial Times is predicting failure for Mr. Cameron – with a possible compromise solution of a 2.9% budget increase. The BBC’s Gavin Hewitt thinks this could even be negotiated down to “just over 2%” – which might satisfy Cameron (but probably not the Tory’s growing eurosceptic wing).

There are suggestions that Cameron might use UK support for treaty reform as a bargaining chip to achieve his objectives on the budget. Personally, I agree with the FT – Cameron will be unable to “freeze or cut” the budget, but might be able to settle with a halving of the proposed budget increase (not an insignificant achievement). This wouldn’t necessarily be the end of the story, however, as a joint-text would then need to be decided with the Parliament and – ultimately – a higher figure than the one proposed by the Council might have to be negotiated.

As for German plans for treaty change – the most likely outcome is that Van Rompuy will be asked to form another taskforce and come back next year with a proposal that satisfies some of Merkel’s demands but that doesn’t require national referenda to implement. Nobody will be entirely satisfied, but that’s what EU politics is all about: compromise, compromise, compromise.

CC / Flickr - BY-NC-ND 2.0 - "Joz" Jimenez

THE BRITISH government is investigating the possibility of hiring a private fleet of armed speedboats to deal with piracy in the Gulf of Aden. The proposal, which is strongly condemned by German shippers (who argue it falls outside the bounds of international maritime law), is in many ways a throwback to the practice of commissioning “privateers.” Whereas the targets of privateers in the Age of Sail were the vessels of other European powers, these 20th Century privateers will be playing at pirate hunter.

The practice of outsourcing military contracts to private mercenaries has seen something of a renaissance in recent years (especially in Iraq, where Private Military Contractors are routinely employed). However, outsourcing government spending is not always cheaper than keeping it in-house.

Another idea being floated from the pages of pirate-hunting history is the convoy system – a method employed by the Spanish in the 16th Century to protect their treasure fleets of looted Aztec gold from the ravages of British privateers.

Yaaarh.

Speaking of austerity, in France the Senate will vote today for the controversial pension reform bill, followed by a vote in the National Assembly tomorrow. If the bill manages to pass both houses (which seems likely), it will become law by the middle of November. The strikes which have gripped France for the past few weeks have cost the economy 3 billion euros so far, and threaten to derail the recovery.

In Latvia, negotiations over the new austerity budget are also threatening to derail as the nationalist “For Fatherland and Freedom – All for Latvia!” alliance (those controversial allies of David Cameron’s in the European Parliament) drops out of coalition government talks, leaving the next government with only a slim majority. In the Czech Republic, the Social Democrat opposition are threatening to veto the austerity budget after winning seats in the Senate (though the government has enough seats in the lower house to overturn a Senate veto). Meanwhile, fierce budget talks are ongoing in Portugal (where a crucial vote in parliament was recently postponed until 3 November). The budget will probably pass, but if it fails then we could be facing another Greek-style crisis.

Perversely, even good news is bad news today. The Daily Telegraph is carrying the story that the German economic boom is forcing the European Central Bank to tighten monetary policy before the sluggish Southern states are ready for it. Meanwhile, European leaders are gearing up for a fight at the European Council on Thursday over Franco-German plans to reopen the Treaty of Lisbon. All this while the world swings toward protectionism, with the EU urging its trade partners not to raise restrictive barriers.

Austerity is causing bad blood. There’s a growing sense of intolerance toward foreigners, and the debate over immigration is heating up. The Economist‘s Eastern Approaches blog has a fantastic piece about the growing conflict between Poland and Lithuania (two countries once joined together in political union). Meanwhile, Europe’s far-right “lite” parties have been meeting in Vienna and are planning to use the European Citizens’ Initiative to call for a referendum on Turkish membership of the EU, whilst the EU has dispatched an armed Rapid Intervention Border Team to the Greek-Turkish border to try and cut down on illegal immigration.

So, that’s the flavour of Europe today. Corruption, austerity and hatred.

GOOD MORNING, Europe! I rather enjoyed yesterday’s briefing. It was short and to-the-point – but I quite liked using a more informal style. Okay, on with today’s briefing. Let’s start with Italy, where the parliamentary constitutional affairs committee has just approved the retroactive application of the so-called “Lodo Alfano” immunity law. Legal proceedings initiated prior to the date the President or Prime Minister entered office will be suspended until after their terms are completed. Essentially, this means Prime Minister Silvio Berlusconi is now immune from prosecution on corruption charges until he leaves office. Something of a victory for Signor Berlusconi, who once joked he entered politics to avoid being sent to prison.

In France, the Autumn of Discontent is on hold for a ten day half-term holiday (starting today), and it’s anticipated that many protesters will dutifully abandon picket-lines and head off on vacances. Quarrelling will continue, however, between the EU institutions. The Council is now threatening legal action against the Parliament and the Commission over allegedly “illegal” extra powers granted to MEPs in international negotiations. If a future historian ever wishes to characterise the EU in the years immediately following the adoption of the Lisbon treaty, it is a safe bet that they’ll summarise the period as one of bitter power-squabbles between the institutions (all of whom have their own interpretation as to the true meaning of the Treaty of Lisbon). See, if further proof is needed, the way Germany and France make deals on the side to water-down EU budgetary rules, prompting outrage from Britain because the rules risk infringing upon national sovereignty, and outrage from the European Central Bank because they don’t infringe nation sovereignty enough.

Finally, the Financial Times reports that the Eurozone recovery is running out of steam, and strong growth in the bigger economies is masking contractions elsewhere. Whilst the “core” Eurozone countries – i.e. Germany and France – are doing reasonably well, the so-called “peripheral” economies such as Ireland, Portugal and Greece are lagging behind. One economist told the FT that it’s “probably too early start fretting about a double-dip recession” – which is a bit like saying: “Whatever you do – don’t think of an elephant.”

Today, the big news comes from the European Parliament’s latest Strasbourg session. The Daily Telegraph reports that MEPs have voted both to increase the EU budget by 6% and in favour of controversial new legislation on paid maternity leave. Personally, I don’t think the EP should be legislating on maternity leave. It’s especially bad timing in Britain, as the government has just announced swinging cuts across the board. Regardless, I think this is a decision for national parliaments and I hope the Council overturns this vote (which they may well do). Also out of Strasbourg is news that the European diplomatic corps has essentially cleared its last legal hurdle by a fairly healthy margin.

In other news, there’s been a major cabinet reshuffle in Spain – including the cutting of two smaller ministries, apparently as part of cost-cutting efforts. Also, EurActiv reminds us that Franco-German plans to amend the treaties and introduce stricter budget rules may well require another Irish referendum, as well as a British one. Finally, the EU’s freemason summit was “very odd.”

GOOD MORNING, Europe! It’s going to be a mini-briefing today, I’m afraid.

• Amid strikes, French leader vows order – It’s Sarko’s moment to shine as he vows to crack down on “troublemakers.”

• This isn’t just about pensions – On the other hand, perhaps Sarko is part of the problem.

• More than a million join protests in latest pension reform push. – The protests keep on growing as we near crunch-time.

• Are things getting out of control? - Could this be the end of French civilization?

• Burning and looting – pension protests in the foreign press. – Or, are the foreign media making the protests out to be scarier than they are?

• EU drops charges on France against Roma – In some good news for Sarko, it looks like he’s out of the woods for his Roma expulsions. Is this the end of this sorry chapter in EU history?

• France and Britain think the unthinkable on defence – France is getting very friendly with Britain over defence.

• France calls on Turkey to fight human trafficking – But still isn’t very friendly with Turkey.

• President Wulff urges Turks to ‘actively integrate’ in Germany – Mind you, neither is Germany!

• Brussels alarmed by Turkish police violence – And perhaps there is cause for concern.

• Russia moves closer to NATO over controversial missile shield – Meanwhile, Russia is getting friendlier with Europe.

• Ukraine set to leapfrog Russia in EU vista terms – But not friendly enough, apparently.

• EU proposes Europe-wide sales tax – And the EU is just about to lose all its friends.

• The British Government’s Strategic Defence and Security Review has been revealed. Of the many apparent absurdities on display, the most glaring might be the fact that one of two new aircraft carriers being built for the Royal Navy will never carry any planes and will be in service for only 3 years before being mothballed and possibly sold. Expect increased Anglo-French co-operation on defence over the next decade, with France providing the planes and Britain the carriers.

• Big news! Charlemagne is reporting that the Germans have “changed camps” and are now siding with France on the issue of EU sanctions against excessive member-state debt. In return for watering down the proposals to make them next to useless (what good is fining a country at risk of default?) Germany have secured French backing for their ultimate goal of treaty-revision. What does this mean given that there’s now a “referendum lock” in the UK? Eurosceptics should note, by the way, that the UK has an opt-out from the new sanctions regime. There’s a good write-up on the Ecofin meeting from EU Business (including fresh attempts to get an EU tax on the agenda).

• The Economist argues that this will be a “crucial week in determining the fate of the pension reform” in France – with fuel shortages possibly being a deciding factor. This week the pension bill will go before the French Senate, but even after that The Economist warns strikes might continue. Protests yesterday turned ugly, with riots breaking out and petrol bombs thrown at gendarmes, who responded with tear gas. These are not just anti-pension protests – the level of fury is too high. These have now become anti-government and, indeed, anti-Sarkozy protests.

• The political crisis in Belgium is set to deepen… again. Francophone and Flemish factions have found themselves unable to come to agreement, especially over the contentious issue of devolution of powers – which Francophone parties worry might lead to the country breaking up completely. Not that there’s much of a country to break-up at the moment. Still, new elections are now increasingly likely – something which will no doubt merely prolong the crisis even further.

• Fresh criticism from Turkey’s President at the slowness of his country’s EU accession negotiations. This comes as Turkey seems to be moving slowly away from the Western sphere of influence, threatening to block a planned NATO missile shield. Meanwhile, the Cyprus Mail reports that life could be about to get more difficult in Northern Cyprus, as Turkey is planning to sell of its assets there – potentially putting thousands of jobs at risk.

• In the Netherlands, Geert Wilders is distancing himself from planned far-right English Defence League (EDL) demonstrations planned in Amsterdam in his honour. Police fear the demonstrations could turn violent, and Wilders is quoted as saying “This demonstration means nothing to me. It is nothing to do with me, nor is the EDL.” I can only conclude that the man is a coward. He whips the crowd up into a frenzy, then denies responsibility for his actions when it comes to crunch-time.

• In Finland, up to 18’000 people have resigned their membership of the Finnish Evangelical-Lutheran Church (the largest denomination in Finland) in protest at two Church representatives’ perceived discrimination against homosexuals during a television debate last week. Personally, I hope this wakes the church up to public opinion in Finland, rather than entrenching existing opinions by effectively “purifying” the church of dissenting voices.

GOOD MORNING, Europe! I don’t care if you’ve already had your coffee this morning – time to get another. I’ll wait… got it? Good. On with today’s briefing:

• As expected, Hillary Clinton has criticised European (and especially British) defence cuts at the NATO summit in Lisbon. The Telegraph quotes a senior military source as saying “The PM should be aware that the cuts the Treasury is looking for are ridiculous” – leading, as they might, to such spectacles as the new British aircraft carriers entering service in 2016 without any aircraft aboard them. Now, critics of the EU often hold up NATO as an example of a successful alliance that doesn’t threaten sovereignty… yet I’m perplexed by US proposals to scrap unanimity voting. Will they also need a permanent NATO Court of Justice to sort out disputes? What about sanctions (such as removing voting rights) for those countries that fail to spend the benchmark of 2% of GDP on defence? Hmm? What was that about sovereignty?

• In Spain, El Pais is reporting (PDF – 15 Oct 2010) that the Basque National Party (PNV) has agreed to enter a parliamentary coalition with the ruling Socialists. In exchange, there will be a transfer of powers from Madrid to the Basque region, which will now be able to set policies in areas such as banking and the credit and insurance sector.

• Germany’s economic boom continues, as think-tanks predict the country is now on course for the strongest growth in a decade.

• GM crops are proving to be a massive headache for the EU. The first Citizens’ Initiative (a new “direct democracy” mechanism enabled by the Lisbon treaty – but in essence a fairly weak petition system) calls for GM to be banned in Europe. Yet, at the same time, certain states (such as the Netherlands) strongly support GM crops and a ban risks breaking WTO rules. Officials warn that if GMs are permitted on a state-by-state basis, it would “mean de facto that we do not have a single market.”

• Member-states and the European Parliament are bickering over whether or not MEPs should be involved in international negotiations on the EU’s behalf. I particularly liked the part where one MEP gave EU Observer a quote “over the phone from Madeira.” How does this chap expect us to take him seriously whilst he plays rent-a-quote from a poolside deckchair in a 5-star resort?

• The International Herald Tribune is carrying a brilliant report into the “closed professions” holding back the Greek economy. Having lived in Italy – which has something similar – I can vouch for the insanity of a system in which one pays about ten times the UK price for painkillers.

• Environment ministers are meeting today to try and reach a common European position on biodiversity and climate change ahead of international summits in Japan and Mexico. The upcoming summits are unlikely to achieve legally-binding targets (although it’s something of a myth that Kyoto was “legally-binding” – there were never any serious sanctions involved). There is good news, however; the recession-struck economies of Europe are on target to meet – and even surpass – their Kyoto targets of an 8% reduction of CO2 emissions on 1990 levels by 2012. They are also on track to hit their 2020 targets of a 20% reduction in ten years.

• The Daily Telegraph is carrying the story that 250 MEPs and their staff from the centre-right EPP grouping have taken a £350’000 ‘study break’ to a resort in Madeira, involving five-star accommodation. Such “perks” apparently go all the way to the top, with EU Observer revealing that Council President Herman Van Rompuy used an official limo to drive him and his family from Brussels to Paris for their holiday – something he wouldn’t even have been able to do as Prime Minister of Belgium. It makes you wonder if the new powers MEPs have won to scrutinise the budget of Baroness Ashton’s European diplomatic service shouldn’t perhaps be better turned on themselves.

• Pressure is mounting on the government in France to cave-in on pension reform, as strike-action continues. There’s also a serious political crisis brewing between France and the EU, as it looks likely that the Sarkozy administration will miss the deadline tomorrow to prove that it’s Roma expulsion policy is not breaking EU law. As if that weren’t enough, another scandal has recently erupted as details come to light of a French police database tracking “non-sedentary ethnic minorities.”

• Meanwhile, there’s another serious political crisis looming in Portugal, as it’s unclear whether the government will get the support it needs from the Social Democrat (PSD) opposition to pass its austerity budget on 29 October. Prime Minister José Socrates has said he will resign if the budget is not passed. My feeling is that this is a bluff – the budget will be passed. Otherwise, this could quickly spin out of control. Keep your eyes on this one.

• A new study shows that 55% of Germans could understand that people might “find Arabs unpleasant,” and 58% believe the practice of Islam should be “considerably restricted.” The survey shows a general rise in support for extremist and far-right views in Germany.

• Speaking of extremism, several ultra-nationalist Serbian soccer hooligans have been arrested at a match in Italy (one thug named Ivan apparently tried to escape police by hiding in the bonnet of a coach taking fans back to Serbia). Serbian officials are concerned that the violence might have been designed to make it harder for Serbia’s EU accession negotiations to succeed. This comes as Hillary Clinton urges Serbia to engage in dialogue with Kosovo, and pledges US support during the EU-brokered talks.

• Nine O’Clock has an interesting editorial about the state of Romanian politics: “Someone unused to the ways of making politics on the banks of the Dambovita River might think that we are before a crucial moment… But he would be wrong! Actually, nothing hints to any kind of crisis, maybe it’s just the economic crisis. But we are used to it…”

• Der Spiegel has a good report about German attempts to extend coal subsidies past the EU commission’s deadline of 2014.

• The Dutch cabinet is being sworn in today. Only 4 members of the 20-strong cabinet will be female, and (perhaps not surprisingly, given the minority government’s anti-immigration allies) none of them are ethnic minorities.

• Germany and Portugal have both been given non-permanent seats on the UN security council (without veto rights). This may well boost the German campaign for a permanent seat. Personally, I think it’s about time the security council was shaken up – the global power structure has changed significantly since WWII. However, I draw the line at merging European seats into a single EU representative, something which would effectively paralyse the UN. Creating a permanent EU seat with veto rights would in effect expand the number of states with a veto over security council decisions from 5 to 32 EDIT: Obviously, that should be “from 5 to 30″ (France and UK are already on the Security Council).

• Noam Chomsky has labeled EU opposition to Turkish accession “racist.” There is certainly racism in the air surrounding this debate, but I don’t think opposition to Turkish membership is by itself racist – not whilst Cyprus is unresolved, nor whilst it remains a crime to insult “Turkishness,” nor whilst YouTube is regularly banned, nor whilst the Kurdish issue is ongoing and nor whilst the Armenian genocide goes unrecognised.

• It looks like the EU moratorium on deep-sea drilling I wrote about yesterday is going ahead. It also looks like the US is set to lift its own moratorium on drilling in the Gulf of Mexico. Whilst I support tough regulation, I’m not convinced that disadvantaging the European oil sector is such a good idea right now. UPDATE: Surprise, surprise! The EU has apparently backtracked over the moratorium and made it voluntary! I suspect countries like Bulgaria (which don’t produce oil) will call a moratorium and countries like the UK (which do) will ignore it. FURTHER UPDATE: Actually, it turns out that Bulgaria does produce oil. Who knew? You get my point, though.

• The countdown begins for a new crisis over the EU’s budget! The institutions now have two months to come to an agreement over whether or not the EU should have the power to raise its “own resources” (i.e. whether there should be direct EU taxation). MEPs say “yes” and member-states say “no.” Fight! Fight! Fight!

• Speaking of fighting: there have been riots at an immigration centre in Sardinia – the third in a series at the same centre in just 11 days. A number of individuals managed to escape the centre and made it to a nearby airport which was then closed down for security reasons before being stormed by police. New arrivals from North Africa have apparently swelled the numbers at the immigration centre to more than 100.

• The Dutch Public Prosecution Department has argued that controversial politician Geert Wilders should not be found guilty of collectively insulting Muslims, as his comments were about the Qur’an and Islam itself, rather than Muslims as a group. Wilders has also been charged with inciting hatred and discrimination, which presumably the prosecution hopes he will be found guilty of.

• The Belgian Parliament has opened in highly unorthodox circumstances – without the Prime Minister reading out a State of the Union speech. In its current state, no serious policy decisions can be made, and although day-to-day affairs will keep ticking over, Belgium is in something of a limbo when it comes to government. In other news from Belgium, a new report shows that 25% of Brussels residents are living below the poverty line – something which one would expect the government to do something about. Oh… right.