Tag: Euro

Why we should have EU breakfast summits

I was listening to Sony Kapoor the other day who complained about bad summit outcomes during the euro crisis. Actually it was a chilling talk as he basically confirmed that nobody in EU governments or EU institutions  seems to have a clue about finance and economics – let alone the political will to look at the underlying problems of the crisis.  And curiously we are faced with the following  situation:  Seemingly incompetent people meet for diner and negotiate about highly complex matters throughout the night  – with a  press conferences at 4am or 6am… And it seems obvious to me that decisions that are taken at 2am are not necessarily the best decisions – so are we really surprised that the outcomes are sub-optimal?

Here is an idea:

Get rid of evening summits and endorse normal working days  – start in the morning with a working breakfast followed by a morning session and a working lunch. Negotiations can continue  in the afternoon. Forget about the diner – go to the pub  instead for a normal night out. It might also  do the trick to create a team spirit among EU leaders!

The issues at stake at the moment are far too important for negotiations after a busy working day – you really need the whole day! This would also improve coordination with national capitals as experts  in ministries and parliamentary committees would be at the disposal during summits. And there would be no  more press conferences at 4am – good news for all journalists and bloggers…

Cameron’s diplomatic failure

One of the most surprising revelations of this weeks’ European Council was the weakness of British diplomacy. The lack of any proper diplomatic strategy is indeed shocking and one may come to the conclusion that this has been a complete diplomatic failure. It would be interesting to know whether this was a deliberate strategy (basically not wanting a deal from the beginning) or if this  points to underlying problems within the Foreign Office or Downing Street. Interestingly it was the  UK treasury that  prepared a last minute protocol which was used by David Cameron as the main negotiating tool. The main problem for Cameron was twofold:

First, his demands had nothing to do with the discussions at the summit. Second, nobody knew about his demands in advance.

What sort of diplomacy is this?

Moreover, Cameron  had no allies whatsoever. Another grave diplomatic failure.  During the last couple of weeks it became clear that this summit would be an important one. But Cameron did not care about allies abroad – no,  it was more important to discuss repatriation and referendums at home. Did he talk to PMs in Poland or Romania?  Maybe he should have read Sikorski’s speech to grasp the mood in the region?  Did he travel to the Baltics, Denmark or Sweden? And what was the diplomatic strategy regarding Germany and France?

At the same time, the idea of speaking for the 10 non-euro countries was flawed from the beginning. Most other countries are legally obliged to introduce the euro so they have an interest in being close to Merkel and Sarkozy in order to shape the rules they will have to obey at some point. As soon as Merkel and Sarkozy came up with a  ‘euro plus’ framework the argument was lost for Britain.

When Cameron met Angela Merkel in Berlin a couple of weeks ago he only mentioned his problems with the Working Time Directive (EWTD) and said nothing about the specific City interests. Interestingly, during the summit Merkel was prepared to discuss a EJC ruling of the EWTD (according to German media reports – can’t find the link at the moment).

Cameron’s misjudgment

Both, Die Welt and The Economist have similar stories about what exactly happened during the summit. It turns out that Cameron misjudged the mood among fellow leaders during the summit.  Cameron thought that the ‘Protocol 12′ solution was the preferred method for the eurozone – giving him leverage through a unanimous decision-making procedure. Bagehot thinks Cameron overplayed his hand, others said he lost his gamble (or verzockt as Udo van Kampen called it on German TV)   However, if he had listened to what politicians, diplomats and media commentators  in Germany or France said during the last weeks he should have known better. Plus  he had no allies, hence his isolation was not a surprise. Simply put, Cameron is not in the loop, maybe because he pulled out of the EPP… In any case,  his advisors should be sacked.

Cameron is not a diplomat and I am not sure he actually enjoys summits. Deep in his heart he is a eurosceptic (although the UK government has followed a pragmatic EU policy) but he comes across as arrogant and bossy. Especially during the eurozone crisis a sense of schadenfreude dominated the UK’s rhethoric.  The UK’s bilateral relations with EU member states have not been sufficiently developed. Cameron is like a robot in this respect. Whatever the issue somewhere in Europe he starts his monologue about British interests and why the EU is such a bad idea. This is hardly a good starting point for a constructive debate. Moreover, it seems difficult for him to build personal relationships with other European leaders – a necessity to win an argument at a summit.

The veto myth

After a good spin by Cameron we are now faced with a ‘veto myth’ which is going through the British and European media. Especially the so-called Eurosceptics in the UK love the idea of David ‘the Eurosceptic’ Cameron.  The problem as pointed out by more eloquent writers is that this was not a veto. A veto stops something. Cameron did not manage to stop anything. It is a bluff. The question is how long will Cameron benefit from calling it a veto?

The main line of Cameron was to ‘defend the national interest’ which translates into ‘defending the interests of the City’.  Now I don’t want to discuss why that is necessary or why he is doing it but I want to point out something else:

Defending a certain interest can be a good strategy. But the diplomatic failure described above led to a situation in which nothing of which Cameron wanted to defend was actually on the agenda. So basically he did not defend his ‘national interest’ – he was isolated and ignored. How can he claim to actually used a ‘veto’? How can he claim it was a victory for Britain? (also considering the British record in the field of EU wide financial regulation, see for example here and here)

The ‘veto myth’ also creates another problem for Cameron. The UK position is weakened after this summit. The euro plus group may create rules that are not in the interest of the UK (and the City is not happy about isolation either). Moreover, this may backfire in the ‘normal’ EU policy making processes as this episode did not help to improve the  reputation of the UK government.

It seems to me that Cameron is a bad negotiator. He does not seem to get the nature of EU negotiations. Merkel and Sarkozy (and others) often propose things before a summit just to use it as a bargaining chip. Cameron never does it – and never understands it when others do it. He also seems to have no interest in developing a compromise. Cameron goes to Brussels to defend Britain – not to negotiate a compromise that Britain can support and is in the interest of Britain. A crucial difference.

I am also a bit surprised that he actually picked ‘the City’ as the national interest worth defending. Of course it makes sense for a Conservative PM but defending the interest of bankers  is not necessarily a topic to win public opinion and new voters? It is more crowd pleaser for the Tories and for the tabloids that think that the EU is more evil than the City.

Domestic debate and backbenchers

Cameron must have been afraid of his eurosceptic backbenchers and a possible referendum (although I still fail to see the justification as it was a proposed treaty change that does not affect the UK ). Was the threat that great that Cameron was afraid to lose the argument?  He must have felt that the government could collapse if he signed up to anything. Maybe he was thinking about the  need to involve Labour to get it through parliament? Cameron placed the importance of the domestic debate over the common good – which should not surprise anyone who is familiar with Cameron’s take on the EU. He is not only afraid of any EU debate in his party – ultimately he is afraid to lose power.

But when will the media and the Conservative party realise that this whole story was a diplomatic failure and a personal misjudgment of David Cameron? It might indeed backfire

(Another interpretation is that Cameron really had an interest in helping the EU26. A separate treaty might indeed be more efficient. And by pushing the EU26  into a separate treaty Cameron is able to get some sort of  single-market-only-EU the Tories dream of (at least he can sell it that way!). It may not appease the anti-EU fraction but it may win over the moderate eurosceptics. By inventing a ‘protocol to defend the national interest’ Cameron was able to withdraw from the negotiations with a certain dignity. Plus he was able to score some useful anti-EU points in the national debate. Moreover, he  achieved some sort of separation between the EU and the UK which he can use in the future to avoid referendums and EU related debates in his party.)

Auf Wiedersehen!

Exklusiv auf Kosmopolito: Unregelmäßige politische Karikaturen vom Blöd-Ei

Euro-Rettung: quid pro quo?

Exklusiv auf Kosmopolito: Unregelmäßige politische Karikaturen vom Blöd-Ei

The UK and the European Union: A difficult relationship

There has been a lot of talk about the UK’s role in the EU lately. First the backbenchers’ rebellion in the House of Commons, then Cameron’s attempts to define EU policy (aiming at a “repatriation of powers”) and now a Labour debate on how to deal with Europe.  Moreover, EU member states are increasingly critical towards the UK (Sarkozy’s remarks are just one example). But what exactly are the problems of the UK’s approach to the EU?

The following text is a collection of unorganised and incoherent thoughts. Probably I should have written two proper essays or 5 blog posts. But I was too lazy and put everthing in one long blog post. It is also the result of living in the UK for the last several years and includes a mix of commentary about recent events but also more general points that I find interesting in the UK’s approach to the EU. Everything, as usual, unfinished and exaggerated and ‘thought’ in progress.  Sorry for the lack of links – might include some in the coming days.

What are the underlying problems of the UK-EU relationship?

First of all, there are several underlying problems worth mentioning.

It seems to me that generally there is limited  trust among UK decision makers in the politics and implementation efforts of other EU member states as well as EU institutions.  Take for example the Schengen opt-out which basically tells the rest of the EU: We don’t trust you to secure the external border efficiently.  Another example is the recent obsession with supranational court decisions (albeit mainly the Council of Europe) but it follows the same line of thought. Foreign judges can’t possibly be as good as our judges. Another example is the European Parliament: The idea that  foreign MEPs (that are also elected!) are involved in shaping legislation is seen as a strange concept. Everything should be done in Westminster. Other democratically elected bodies are not good enough – because they are not British (an implicit assumption behind a lot of arguments). It is the focus on theses issues instead of looking at how the UK is involved in certain international bodies which makes public debates so hideous.

Furthermore the political culture of the UK seems to have a problem with the concept of ‘compromise’ and ‘negotiations’ which is vital for European institutions. The media also loves zero sum games – which does not help to frame the issue.  This may have to do with the two party system and the missing tradition to form coalitions but it may well be laziness to understand complex issues. And even the governing coalition does not seem be able to communicate the nature and the necessity of ‘compromises’ in a convincing way.

The UK suffers from a political superiority complex. Especially politicians and commentators do not seem to understand that (1) the empire is gone – and will not come back, that (2) you can learn something from other countries (3) the war is over. All those tendencies create the impression of the “little Englanders” with a funny “island mentality”. Interestingly, the life in the UK is more cosmopolitan than in other parts of the EU and the majority of the population is very liberal and open-mindend. I think this is the real disconnect between the elite and the citizens in the UK.

At the same time, UK citizens are disconnected from the EU not only because Brussels is 2 hours away from London.  No – the UK government secured opt-outs in virtually all areas which could  benefit citizens directly and make the EU  more visible in everyday life: no Euro, no Schengen, no social rights, no fundamental rights…  It is not a surprise that citizens will not be interested, let alone develop trust in EU cooperation. The EU is reduced to a theoretical concept of a trade bloc. This mixed with a hostile media and attention seeking politicians will give you what is commonly described as “‘euroscepticism’.

There is obviously a huge problem with the way how UK media report about the EU. One the one hand side there is the tradition of  tabloid campaign journalism which actively lobbies against anything European.  The Murdoch press has bee opposed to the EU as soon as it realised that competition policy might also have an impact on the Murdochs. However, I don’t think the Murdoch press is the problem. The main problem in the UK  is actually the Daily Mail – and this goes beyond the  EU stories, it has an impact on democratic culture. The Daily Mail is read by a large middle class who tends to think of it as a ‘normal’ newspaper – which I think is an essential problem in the UK. (but this is a topic for another blogpost) One the other hand you can find  inaccuate EU reporting also in broadsheets. However, tabloid ‘EU stories’ have created an atmosphere which can be characterised by suspicion and fear of the ‘other’ and a general feeling that foreigners and immigrats are bad and everything foreign (especially ”Brussels’) cannot be trusted. Let’s not forget that the  media concsiously misreports EU issues and actively develops  euromyths. I don’t believe that this is because of lazy journalists  – it is far too frequent, it only happens in the UK so this must be actively pursued by certain interests! However, the power of the hostile media landscape defined to a large extent what is acceptable for politicians to say ‘on Europe’.

The public debate “on Europe” is stuck in a frame that only knows “europhiles” and “eurosceptics”. As long as both words are seen as insults there is not much hope to move the debate forward. It is not helpful to address the real problems of the EU or the UK-EU relationship.  Especially political parties need to develop new discoursive frames to create a useful debate “on Europe”.  New frames are desperately needed. Examples could be a “social Europe”, a “liberal Europe” or a “stable Europe”. However, in order to do that you need to accept that the EU is here to stay and that different policies should be decided on the different levels with the appropriate democratic control.

We need better EU politicians. The UK as well as most other Menber states must start sending better politicians to Brussels and Strassbourg. The European Parliament can only work better if citizens send their best and brightest MEPs to Strassbourg and Brussels. The European Commission can only work with Commissiners that are multilingual and  competent in their respective policy area.  Parties and the media must stop seeing ‘Brussels’ as the end of a career but rather as a political choice that is as important as being an MP in Westminster.

Languages are a huge problem in the UK. There will be problems as long as the value of language teaching is contested. One benefit of the EU is to look for jobs and opportunities in other EU countries. However, this only works if pupils learn as many languages as possible. Learning a language needs to become compulsary again in UK education – from the first year to the last year!

There is an  obsession of the current UK government to frame everything in the ‘national interests’ using an outdated concept of ‘power’ and ‘sovereinty’. This may well be a problem of the Conservative party but the real problem is the narrow definition of ‘national interests’.  If everything is framed within zero sum games it is very difficult to win anything. At the moment, the government seems to have a very simplisitic view on power and influence which is also at the heart of its problems with the EU.

And one final thing: The UK is a European country. So, please Brits, stop saying “If you go to Europe…” or “In Europe things are different…” As long as you define everything according to a “them and us” pattern, nothing will change.

What is the way forward for the UK?

A general point which needs to be addressed is that compromise is often painful but necessary. This may not be an integral part of the UK’s political culture but it is important in an interdependent world and even more so in the EU.  Knowledge about the value of cooperation is another broader concept that is often forgotten in the UK debate. The focus on “national interests”, “souvereignty” etc will not help the UK in long term.

The UK needs to realise that you can only change the EU if it is an integral part of it. If you decide to leave the EU you will end up implementing EU policy without the ability to change EU policy (as outlined by David Cameron). A more complex point however is the following.  You can only change a certain EU policy  if you are an equal part of this specific EU policy. If you have an opt-out nobody will consult you, nobody will listen to you and you will not be able to change anything.<
If a two-speed Europe  is not in the interest of the UK there is only one way forward for the UK:  The UK needs to increase its EU bargaining power!

For example: If the UK is serious about changing the budget in the future it will  need to  give up the budget rebate.  The budget is important as it provides strategic opportunities to reform the EU. But if one country pays less because of some dodgy deal 30 years ago it will not be taken seriously. The world has changed since Thatcher. At the same time the UK could win some friends in Eastern Europe by doing this.  This however can only be addressed if the UK government is ready to accept that it could indeed be in the “national interest” to pay more in exchange of ‘influence’. But this is a difficult sell especially if your ‘red lines’ are rigid and your ‘national interest’ is static.

Another example:  Despite the current crisis, the eurozone is the most important market for the UK. Recently, David  Cameron and George Osborne called for more fiscal coordination within the eurozone because the UK wants a stable currency zone to trade with. Now, the problem is that the UK is not a eurozone member, so one can understand Nicolas Sarkozy’s ager regarding the UK’s attempt to lecture how the eurozone should be run. Using the current eurozone crisis to start a debate on repatriating some mysterious powers (which are never properly defined!) is exactly the wrong way to secure a stable eurozone. It will not give you more leverage but only make you sound ridiculous in the ears of French or German politicians. And remember: In the worst case scenario the eurozone will establish parallel institutions and negotiating new treaties outside the present EU framework – and the UK would have no say whatsoever. The bargaining chip is unfortunately (at least for the political elite) full eurozone membership. The UK government should announce to join  (important is the word ‘announce’!) in a reformed eurozone at some undefined point in the future. This may give the prime minister a seat at the table of the eurozone summits and in every other future political/fiscal cooperation mechanism. The bargaining power is quite sophisticated. No direct obligation to join the euro but an influence in shaping the governance of the eurozone based on a vague promise to join one day if reforms have been implemented successfully.

Just two points that are often neglected by UK politicians and commentators: (1) Germany will do everything to save the Euro. And I mean everything.  It may be hard to believe for some UK commentators, but a break- up of the Euro is not on the agenda. Only British newspapers speculate about it. (2) All Eastern European EU member states are legally obliged to join the Euro in the future including states such as Poland. Denmark has an opt-out but its currency is linked to the eurzone which makes the opt out purely symbolical. That leaves the UK and Sweden – the latter is thinking about holding a new referendum after the crisis. The danger is not a two-speed Europe –  but a core-EU of up to 26 member states.

Another example. You can’t advocate for a better EU foreign policy and saying at the same time that nothing needs to change. It is a failure of the British diplomacy not to use the EU in more strategic way. After all, British diplomats are among the best out there and are highly respected within the international system. But why is Britain opposed to making the EEAS work, why not develop joint consular services or coordinate foreign policy on the ground, why not save money and increase efficiency with a military coordination unit in Brussels? It is pure hypocrisy to criticise on the EU’s lack of power without trying to change things. Again, this has to do with an outdated concept of sovereignty which places more importance on symbols and traditions than addressing the real problems.

I think the UK elite consistently failed to build strong EU alliances. Especially a strong British-German alliance within the EU would be desirable.  There is a lot of common ground between the two countries – provided you are prepared to learn from another country. There is a substantial part within the German elite which can identify with the  UK’s philosophy on trade and markets.  In contrast, the French state centric economic model does not really correspond to German realities.  However, the German-French axis mainly exists because of historical reasons – and the lack of alternatives. I think the Germans would rather run the EU with the Brits than with the French if the Brits were a bit more involved in everything and would not always look for the opt-out. The truth is that Germany and Britain are both large countries that are obviously linked through history (and the British obsession with the wars might not have helped in the past), languages are not that different and even the Queen has German ancestors. People in Germany are fond of the English language and British culture. So wouldn’t it make sense for British politicians to develop closer links to Germany?

You want to change the CAP,  liberalise services in the EU, reform the EU budget, clearly define what policy is decided on which level, creating a better EU foreign policy? Well,  I think Berlin might be interested. But from a Berlin perspective, the UK is already seen as semi-detached from the EU – if not fully detached. Basically nobody in Berlin cares what British politicians say on ‘Europe’ or what they want during the next round of treaty negotiations.

Well, this is something David Cameron should change. But he can only change it if he offers something in return.

Dominique Strauss-Kahn: Die nackte Wahrheit

Exklusiv zu Gast auf Kosmopolito: Unregelmäßige politische Karikaturen vom Blöd-Ei

“My word is my bond” – but not for EU citizens in the UK!

As many of you know, I recently moved to the UK to start a PhD. (that is also the reason why this blog has been a bit silent recently).  Everyone that has ever moved abroad knows that it is quite a mess especially in the first couple of weeks. In my case I had to settle down at the University, find a place to live, get a new phone number and a new bank account. As I lived in several other countries before, finding a suitable place to live is the most difficult thing to do usually (at least for me)…

But this time it was a bit different. Surprisingly, the most annoying issue surrounding my move has been the UK banks. (And I am not talking about the financial super crisis… and Gordon Browns rescue plans for the banks and himself).

The situation is as follows: I am a postgraduate research student with a studentship (= regular income for the banks, right?) and I am a EU citizen. What do I need? – Basically a cheap (preferably free) current account with a debit card that I can use everywhere in Europe. Since I will be travelling a lot, it would also be good to be able to use the debit card without any fee abroad. You might ask yourself how I came up with these specification? Well basically that is the kind of account I have in Germany. As you can see, I neither need a flexible overdraft scheme nor a proper credit card.

So what happened? Innocent as I am I walked into several high street banks and told them my story. I expected to be treated as a normal student (we are all Europeans, right?) and I expected to be offered a student account (which is usually free of charge and comes with a couple of freebies). But instead I was offered either an “international account” (for “only” £5 -7 a month!) or a cash account (free but usually given to teenagers, so the debit card is not really accepted everywhere).

So what is the problem? I don’t have a credit history in the UK! And I suppose because the UK has not joined the Euro they also do not accept credit histories from other European countries. OK, fair enough, but actually I would be flexible on that as I do not need a flexible overdraft scheme. What actually struck me most about it are two things: The inflexibility of the banks (since I always thought the financial sector is more flexible in the UK than elsewhere in Europe) and the absolute absence of any “European” rule. Basically for the bank it does not make a difference whether somebody is a EU citizen or comes from a country in Africa or South East Asia.  Needless to say that most banks charge huge fees on anything that happens abroad (withdrawals, purchases, transfers). I assume that all this is connected to not being a member of the Eurozone…?

In the end, I decided for one of the “teenager accounts” and I am planning to get another account next year with a different bank (because then I will have credit history…although having no overdraft scheme makes it a bit difficult to prove that). Another proof that something is not working properly here is the following. I have to wait for ONE week to get the account number and TWO weeks for the debit card. Every other bank in every other country (even Belgium!) I used so far was much quicker… I expected to get the number immediately and the card 3-4 days later…

And I really had to laugh while waiting at one of the banks. The TV showed Gordon Brown explaining the financial crisis and that the motto of most brokers is “My word is my bond”… It obviously only applies to brokers and not to customers.

PS: And while we are at it: Another issue that is clearly discriminatory is the issue of Research Council Studentships. You do not need to be British to get one but you must prove that you have been a UK resident (which is funny because there is no registration process….) for three years. At first sight that sounds like a reasonable thing but just think a bit further: British citizen would also be excluded if they decided to study in another EU country for their Bachelor. But the rule is not fair here: British citizens can always claim to have lived at their parents address for these three years…  So who is excluded from the whole scheme? EU citizens (that is Non-British) that on paper are supposed to have the same rights everywhere in the EU! Well of course it is also against the whole idea of making Europe the “most innovative knowledge based society”… but that is already the story of another blog post, I suppose.

Update 25/10/2007: So after 1 week I got my account number, after almost 2 weeks my debit card. I even got my activation code for the Internet banking. However, the PIN code for the debit card is still missing. After reading through the letter I learnt that I had to “activate” my debit card either online or by returning a letter. So after “activating” my online banking account (with the “online activation code”) I was really happy that the “activation” of the debit card actually worked online! So hopefully they will send also the PIN soon since without it the card is pretty useless. Then I had this crazy idea to actually “use” the online banking since I had “activated” it. So, I found out that I needed to order a “card reader” which I somehow expected since they did not send me any online PIN numbers … but the next surprise came immediately: It can take up to 15 days to deliver this card reader!!!

So, the only way that I actually can get my money is queuing at the cashier in a branch of the bank…. (I don’t think I have ever done that in my life…)

I have not yet given up hope as it might be the problem of this particular bank. However, I think this is just ridicolous and not acceptable. It basically can take more than a month until a bank account is fully functioning (+ all the other restrictions I have to live with!)…

Just to put that into perspective: I lived in Belgium, Germany (both famous for bureaucracy) and Romania (known for not being quite as efficient as the rest of Europe), but in all of these countries this whole process of opening a bank account (with debit and credit card, online banking and telephone banking) takes no longer than 3-4 days!

Kosmolinks #7

Some more commentary on the new Reform /Lisbon Treaty: “Here is what changes!”

A new Euro referendum is coming up: Denmark is to hold new euro vote

Educating Russia looks at the education reform in Russia: A new history book for example claims: “We see that practically every significant deed is connected with the name and activity of President V.V. Putin”

An interesting article about the civil society development in South Eastern Europe by Risto Karajkov : NGOs in the Balkans: Too Much of a Good Thing?

The debate about the reform of the European Commission continues: In defence of national interests

And now to something completely different: Jimi Hendrix: Live at Monterey!

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