by Tomas Valasek
In his first 100 days in the office, Nicolas Sarkozy turned France’s domestic political scene on its head. He trounced and marginalised the far-right National Front in the May presidential elections. In parliamentary elections a few weeks later, he wiped out Francois Bayrou’s bid to form a centrist party. And once firmly installed in the Elysée palace, he emasculated the leading opposition party, the Socialists, by poaching their best minds.
What in the world, one might wonder, will he do to France’s foreign policy when he puts his mind to it?
Well, on Monday we got our first hint. Sarkozy gave a speech to an assembly of French ambassadors from around the world. The presentation was typical Sarkozy. It oozed confidence. The speech showed him prepared. And, in a number of important ways, it showed him willing to depart from policies of Jacques Chirac.
The most interesting part of this speech was about Iran. Before even mentioning the country by name, he notes that France has an obligation to help the rise of emerging states by giving them access to nuclear technology for peaceful use. In saying so, he seems to be pre-emptively addressing Tehran’s accusations of double-standards. But then, when Sarkozy starts talking directly about Iran, he hammers. To France, a nuclear-armed Iran is simply unacceptable. France will support a new round of UN Security Council sanctions (when only last month it was said to be lobbying in New York against it because French companies may be among the most affected). And finally, the coup de grâce: unless Iran respects its obligations it will not escape “the catastrophic alternative: a nuclear-armed Iran or the bombing of Iran”. Sarkozy is effectively laying the blame for possible US intervention at Tehran’s feet. He is making Iran the issue, not the US. He does not condone bombing but suggests that he may not be entirely opposed either. And if it happens, it will be Iran’s fault. This is a significant change from Jacques Chirac’s days.
Washington’s joy at the speech will not be unqualified. Sarkozy is not warm to America. When addressing it directly, he calls for “pragmatic” relations. Sarkozy’s agenda for the French presidency of the EU in 2008 is not particularly US friendly. The emphasis on immigration, energy and environment offers little hope of rapprochement. With the exception of energy these are issues that are either intra-European (immigration) or on which the EU and France do not see eye-to-eye (environment). On NATO, Sarkozy says he wants the alliance to co-operate smoothly on military matters with the EU. But he makes no hint of how to resolve the impasse that effectively keeps the EU and NATO from talking to each other. Worse (from the US perspective) he wants to strengthen the EU’s operational planning capacity, which has been a thorn in the side of both London and Washington.
On the other hand, where Sarkozy talks of issues that matter to the US – China, Iran, the Middle East – he strikes a line similar to Washington’s. That is true not only for Iran but also for the Middle East, Russia and China. Sarkozy comes down stronger on the side of Israel than any other French leader in recent history. He proudly calls himself a friend of Israel. He says peace with Palestine is very important but it will not happen if the Palestinians cannot form a government. Sarkozy called the Hamas takeover of Gaza “the first step toward establishing Islamic radical foothold on Palestine territories” and said that the Palestinian Authority must be rebuilt under its president Mahmoud Abbas.
On Russia and China Sarkozy strikes a realist tone. He ignores their domestic affairs altogether. Their foreign policies come for criticism. Sarkozy chided China for using monetary policy as a power tool, and Russia for using energy as a “brutal” weapon. (Interestingly, nowhere does he raise issues that made his foreign minister, Bernard Kouchner famous: the slide toward authoritarian regime in Russia, or violations of freedom of speech in China. In foreign policy, as in everything else, Sarkozy seems determined to run things directly from the Elysée.)
The overall impression Sarkozy leaves is that he is neither anti-American nor pro-American. He does not take cheap shots: although he notes that France was right on Iraq, he does not gloat. He states in the preamble that “the leaders of the past twenty years failed to construct a workable post-Cold war order”. But he is both right and diplomatic in saying so, so America should not take offence. The speech effectively removes America as the defining issue of French foreign policy. France will not view foreign policy as an opportunity to score points at America’s expense; it will judge the world’s problems on their own merits. Where Sarkozy does so, he finds that he has a lot in common with the US. But he will not go out of his way to restore America’s good standing in Europe; the Americans will need to do that work themselves.
Overall this is a very strong presentation. He clearly thought about foreign policy a lot. We have come to associate Sarkozy’s France with exuberant confidence but it bears remembering that only three years ago, the world looked very different through French eyes. The then-Foreign Minister Michel Barnier, also speaking in 2004 to assembled French ambassadors, lamented the decline of France in Europe (because of enlargement of the EU to include pro-US countries). Sarkozy could not have struck a more different note.
Tomas Valasek is director of foreign policy & defence at the Centre for European Reform.
Wednesday, August 29, 2007
Friday, August 24, 2007
Poland’s poll and the EU treaty
by Katinka Barysch
Poland’s early election may coincide with the last days of talks on the new EU Reform Treaty. Although the Kaczynskis are unlikely to reopen a deal agreed in June on the treaty's content, last minute political posturing for a home audience could delay the text being signed off.
Many Europeans were relieved when Prime Minister Jaroslaw Kaczyinski sacked his junior coalition partners in August. Kaczynski’s somewhat prickly and paranoid Law and Justice party (PiS) has been difficult enough to deal with. The inclusion of the arch-nationalist League of Polish Families (LPR) and Andrzej Lepper’s populist Self-Defence made it worse. This government has (perhaps understandably) blocked EU talks with Russia, (outrageously) used World War guilt to get more EU votes and (unwisely) threatened to veto the whole Reform Treaty. The spectre of Poland holding an election exactly when the inter-governmental conference (IGC) is supposed to wrap up the treaty talks will haunt many in foreign ministries across the EU.
The Polish parliament has postponed the final decision of whether and when to hold an early election to September 7th. The PiS minority government has little reason to hang on while the opposition Civic Platform (PO) would love to capitalise on its current poll lead. The earliest possible date –and the one most widely mooted – is October 21st. That is three days after EU leaders are supposed to sign the Reform Treaty.
The Kaczynskis (Jaroslaw and his twin brother Lech, who is president) would gain little from making the treaty an election issue. After all, they had claimed victory after the June summit. Although the other Europeans had refused to re-open talks on the EU voting system – Poland had insisted on sticking with the Nice formula, then pushed for a rule based on the square root of populations – they did agree to delay the introduction of the ‘double majority’ system until 2017. Polish officials afterwards grumbled that an agreement on blocking minorities was not sufficiently spelled out. But this is not a big enough issue to re-open the entire treaty package.
The PO does not like the June deal: it was PO leaders who had come up with the memorable “Nice or death” slogan and first pushed for the square roots system. But on the whole, the PO’s attitude towards the EU is similar to that of the PiS, although less anti-German (which is why Jaroslaw has recently been portraying the PO as Berlin’s puppet). To gain votes, the PO will want to stress what makes it different from the PiS, such as administrative competence, pro-business policies and more liberal attitudes towards social issues.
Neither the LPR nor Self-Defence can be sure to overcome the 5 per cent threshold for parliamentary representation. So they will run together, and do their utmost to steal nationalist and conservative votes from the more mainstream PiS and PO. Their eurosceptic rants and calls for a referendum on the treaty could put the PiS and the PO on the defensive. Despite the Poles’ generally pro-EU attitudes, many Polish party leaders appear to have convinced themselves that elections are won on the right.
The lone pro-European voice in the forthcoming election will be Aleksander Kwasniewski, the popular former president, and the Left and Democrats, a movement put together from bits of the former Communist party. Although the left almost faced political oblivion in the 2005 election, it is now rising steadily in the polls.
For most Poles, Europe is not a major concern at the moment. Life is good: the economy is growing at a brisk 7 per cent, unemployment is at a post-Communist low and EU money has started to flow in. In the latest Eurobarometer survey, almost 80 per cent of Poles said their country has benefited from being in the EU.
Nevertheless, Europe could become an issue in the election campaign, not least because the Commission is asking for radical restructuring of the iconic shipyard in Gdansk. To prevent the radical parties from benefiting from anti-EU sentiment, the Kaczynskis could seek to postpone final agreement on the treaty. This would be no disaster: signing it at the December summit would still leave EU members enough time to ratify it before the 2009 deadline. But the Portuguese presidency would be peeved (it wants to focus on Africa in December), as would be Gordon Brown who wants to get the treaty ratification out of the way as quickly as possible. Poland would once again be singled out as the EU’s troublemaker.
Those who are hoping for a fundamental shift in Poland’s EU stance after the election may be disappointed. The PO’s Europe policy would be more polished and constructive, but no less assertive when it comes to Poland’s national interest. Moreover, the PO is unlikely to gain an outright majority. Although the PO and the PiS agree on much, personal animosities would make ruling together fiendishly difficult. The PO and the Left, on the other hand, share a dislike of the Kaczynski twins. But it is doubtful whether this would be enough to overcome the PO’s suspicion of the former Communists, as well as programmatic differences. As long as Poland is ruled by unstable and often short-sighted coalitions, the EU will remain a tempting platform for politicians to showcase their nationalist credentials.
Katinka Barysch is chief economist at the Centre for European Reform.
Poland’s early election may coincide with the last days of talks on the new EU Reform Treaty. Although the Kaczynskis are unlikely to reopen a deal agreed in June on the treaty's content, last minute political posturing for a home audience could delay the text being signed off.
Many Europeans were relieved when Prime Minister Jaroslaw Kaczyinski sacked his junior coalition partners in August. Kaczynski’s somewhat prickly and paranoid Law and Justice party (PiS) has been difficult enough to deal with. The inclusion of the arch-nationalist League of Polish Families (LPR) and Andrzej Lepper’s populist Self-Defence made it worse. This government has (perhaps understandably) blocked EU talks with Russia, (outrageously) used World War guilt to get more EU votes and (unwisely) threatened to veto the whole Reform Treaty. The spectre of Poland holding an election exactly when the inter-governmental conference (IGC) is supposed to wrap up the treaty talks will haunt many in foreign ministries across the EU.
The Polish parliament has postponed the final decision of whether and when to hold an early election to September 7th. The PiS minority government has little reason to hang on while the opposition Civic Platform (PO) would love to capitalise on its current poll lead. The earliest possible date –and the one most widely mooted – is October 21st. That is three days after EU leaders are supposed to sign the Reform Treaty.
The Kaczynskis (Jaroslaw and his twin brother Lech, who is president) would gain little from making the treaty an election issue. After all, they had claimed victory after the June summit. Although the other Europeans had refused to re-open talks on the EU voting system – Poland had insisted on sticking with the Nice formula, then pushed for a rule based on the square root of populations – they did agree to delay the introduction of the ‘double majority’ system until 2017. Polish officials afterwards grumbled that an agreement on blocking minorities was not sufficiently spelled out. But this is not a big enough issue to re-open the entire treaty package.
The PO does not like the June deal: it was PO leaders who had come up with the memorable “Nice or death” slogan and first pushed for the square roots system. But on the whole, the PO’s attitude towards the EU is similar to that of the PiS, although less anti-German (which is why Jaroslaw has recently been portraying the PO as Berlin’s puppet). To gain votes, the PO will want to stress what makes it different from the PiS, such as administrative competence, pro-business policies and more liberal attitudes towards social issues.
Neither the LPR nor Self-Defence can be sure to overcome the 5 per cent threshold for parliamentary representation. So they will run together, and do their utmost to steal nationalist and conservative votes from the more mainstream PiS and PO. Their eurosceptic rants and calls for a referendum on the treaty could put the PiS and the PO on the defensive. Despite the Poles’ generally pro-EU attitudes, many Polish party leaders appear to have convinced themselves that elections are won on the right.
The lone pro-European voice in the forthcoming election will be Aleksander Kwasniewski, the popular former president, and the Left and Democrats, a movement put together from bits of the former Communist party. Although the left almost faced political oblivion in the 2005 election, it is now rising steadily in the polls.
For most Poles, Europe is not a major concern at the moment. Life is good: the economy is growing at a brisk 7 per cent, unemployment is at a post-Communist low and EU money has started to flow in. In the latest Eurobarometer survey, almost 80 per cent of Poles said their country has benefited from being in the EU.
Nevertheless, Europe could become an issue in the election campaign, not least because the Commission is asking for radical restructuring of the iconic shipyard in Gdansk. To prevent the radical parties from benefiting from anti-EU sentiment, the Kaczynskis could seek to postpone final agreement on the treaty. This would be no disaster: signing it at the December summit would still leave EU members enough time to ratify it before the 2009 deadline. But the Portuguese presidency would be peeved (it wants to focus on Africa in December), as would be Gordon Brown who wants to get the treaty ratification out of the way as quickly as possible. Poland would once again be singled out as the EU’s troublemaker.
Those who are hoping for a fundamental shift in Poland’s EU stance after the election may be disappointed. The PO’s Europe policy would be more polished and constructive, but no less assertive when it comes to Poland’s national interest. Moreover, the PO is unlikely to gain an outright majority. Although the PO and the PiS agree on much, personal animosities would make ruling together fiendishly difficult. The PO and the Left, on the other hand, share a dislike of the Kaczynski twins. But it is doubtful whether this would be enough to overcome the PO’s suspicion of the former Communists, as well as programmatic differences. As long as Poland is ruled by unstable and often short-sighted coalitions, the EU will remain a tempting platform for politicians to showcase their nationalist credentials.
Katinka Barysch is chief economist at the Centre for European Reform.
Thursday, August 02, 2007
Europe in the US-UK special relationship
by Tomas Valasek
Gordon Brown scarcely mentioned Europe during his visit to the United States, certainly much less than Tony Blair used to. That is understandable. The current prime minister is blessed with the fortune of sharing his time in office with Angela Merkel and Nicolas Sarkozy, two pragmatic, Atlanticist leaders. Unlike Tony Blair, Gordon Brown does not need to worry about keeping the US and EU strands of UK foreign policy from coming apart. This gives him a freer hand in reviewing US-UK co-operation on key foreign policy issues.
Tony Blair sided with Washington over Iraq in part to keep the European Union’s common foreign policy from slipping into an openly anti-American stance. While he believed that removing Saddam Hussein was important in its own right, he also calculated that allying the UK with the US would keep Europe from trying to collectively weaken the US position on Iraq, and possibly elsewhere. (The exact intentions of messieurs Chirac and Schröder will always be subject to different interpretations. But their words and actions during the Iraq crisis strongly suggest that, in addition to heartfelt opposition to the US-led war, they also viewed the crisis as an opportunity to build the EU into a tool for balancing US power worldwide.)
The EU is now shaping the US-UK special relationship in subtle yet sometimes decisive ways. In the case of Iraq Tony Blair would likely have supported Washington irrespective of French or German views. But he clearly also felt that their opposition gave him little option; and that by breaking with Washington the UK would fuel anti-American tendencies around Europe, and possibly precipitate a permanent transatlantic split. The previous prime minister was dealt a terrible deck of cards: siding with Washington, Blair knew very well, meant plunging the EU into a foreign policy crisis – which it did, in 2003.
If only Blair had Gordon Brown’s current options. Four years later, both Chirac and Schröder are gone. Angela Merkel and Nicolas Sarkozy are far more pragmatic and Atlanticist than their predecessors. They are far less tempted than Chirac and Schröder to construct a European foreign policy identity on the basis of opposition to the US. And President Bush, too, has been chastised by the Iraq experience. His second administration is distinctly more multilateralist, less guns and more butter.
The role of Europe in the US-UK relationship has changed correspondingly. Unlike Tony Blair, Prime Minister Brown can afford to not worry about Europe as he reassesses the relationship with Washington. His European counterparts, by and large, have good working relations of their own with the US. Brown is far freer than his predecessor to refashion the priorities of US-UK foreign policy co-operation, knowing that a possible occasional strain in the relationship is not going to have wider repercussions in Europe.
Arguably, Britain has lost some of its usefulness to the US, too. Many find the idea of the UK acting as a bridge between the US and Europe fanciful. But, without UK leadership, the other Atlanticist EU countries, mostly new member-states in Central Europe, would have come under tremendous pressure from Germany and France to form a united EU front against the US. Tony Blair’s words and deeds demonstrably helped shore up support for the US in Europe. Gordon Brown is not likely to be called upon to play the same role. EU members are making far more pragmatic and less ideologically-driven decisions on their relations with the US than they were in 2003. As US-European ties become less confrontational, there is less need for the UK to play its balancing role within Europe.
Now that Gordon Brown is free to judge the US foreign policy on its own merit, without worrying about the EU context, what use did he make of this manoeuvring room at his meeting with George Bush over the weekend of July 25th- 26th?
Arguably, not much. Most of the change that stemmed from the summit was cosmetic. Gordon Brown clearly went to the US resolved to shake off the poodle image without undermining the special relationship. He succeeded in this. His cool, reserved demeanor with the US president restored dignity to London’s standing in the US and in Europe.
As far as substance is concerned, Brown sounded surprisingly hawkish on Iran (although more in his pre-trip press conferences than at the summit itself), while gently creating a little distance from Washington on the issue of a timetable for withdrawing troops from Iraq – Britain wants to be out sooner. But he may have missed an opportunity to clearly state his differences on the Middle East peace process. Britain is gingerly moving towards engaging Hamas and working with it to make it a legitimate and responsible actor. The White House has struck out in the opposite direction. President Bush last week announced a raft of initiatives meant to isolate Hamas and bolster its main rival, President Abbas. Gordon Brown remained largely silent on this point during his press conference with George Bush. This could mean that he agrees or – more likely – that he wanted to avoid a dispute in the open. And that is a pity. Because of the change of leadership in Europe, the prime minister is less constrained in his dealings with Washington than his predecessor. If he believes US policy on the Middle East to be wrong, this was the time to say it.
Tomas Valasek is director of foreign policy & defence at the Centre for European Reform.
Gordon Brown scarcely mentioned Europe during his visit to the United States, certainly much less than Tony Blair used to. That is understandable. The current prime minister is blessed with the fortune of sharing his time in office with Angela Merkel and Nicolas Sarkozy, two pragmatic, Atlanticist leaders. Unlike Tony Blair, Gordon Brown does not need to worry about keeping the US and EU strands of UK foreign policy from coming apart. This gives him a freer hand in reviewing US-UK co-operation on key foreign policy issues.
Tony Blair sided with Washington over Iraq in part to keep the European Union’s common foreign policy from slipping into an openly anti-American stance. While he believed that removing Saddam Hussein was important in its own right, he also calculated that allying the UK with the US would keep Europe from trying to collectively weaken the US position on Iraq, and possibly elsewhere. (The exact intentions of messieurs Chirac and Schröder will always be subject to different interpretations. But their words and actions during the Iraq crisis strongly suggest that, in addition to heartfelt opposition to the US-led war, they also viewed the crisis as an opportunity to build the EU into a tool for balancing US power worldwide.)
The EU is now shaping the US-UK special relationship in subtle yet sometimes decisive ways. In the case of Iraq Tony Blair would likely have supported Washington irrespective of French or German views. But he clearly also felt that their opposition gave him little option; and that by breaking with Washington the UK would fuel anti-American tendencies around Europe, and possibly precipitate a permanent transatlantic split. The previous prime minister was dealt a terrible deck of cards: siding with Washington, Blair knew very well, meant plunging the EU into a foreign policy crisis – which it did, in 2003.
If only Blair had Gordon Brown’s current options. Four years later, both Chirac and Schröder are gone. Angela Merkel and Nicolas Sarkozy are far more pragmatic and Atlanticist than their predecessors. They are far less tempted than Chirac and Schröder to construct a European foreign policy identity on the basis of opposition to the US. And President Bush, too, has been chastised by the Iraq experience. His second administration is distinctly more multilateralist, less guns and more butter.
The role of Europe in the US-UK relationship has changed correspondingly. Unlike Tony Blair, Prime Minister Brown can afford to not worry about Europe as he reassesses the relationship with Washington. His European counterparts, by and large, have good working relations of their own with the US. Brown is far freer than his predecessor to refashion the priorities of US-UK foreign policy co-operation, knowing that a possible occasional strain in the relationship is not going to have wider repercussions in Europe.
Arguably, Britain has lost some of its usefulness to the US, too. Many find the idea of the UK acting as a bridge between the US and Europe fanciful. But, without UK leadership, the other Atlanticist EU countries, mostly new member-states in Central Europe, would have come under tremendous pressure from Germany and France to form a united EU front against the US. Tony Blair’s words and deeds demonstrably helped shore up support for the US in Europe. Gordon Brown is not likely to be called upon to play the same role. EU members are making far more pragmatic and less ideologically-driven decisions on their relations with the US than they were in 2003. As US-European ties become less confrontational, there is less need for the UK to play its balancing role within Europe.
Now that Gordon Brown is free to judge the US foreign policy on its own merit, without worrying about the EU context, what use did he make of this manoeuvring room at his meeting with George Bush over the weekend of July 25th- 26th?
Arguably, not much. Most of the change that stemmed from the summit was cosmetic. Gordon Brown clearly went to the US resolved to shake off the poodle image without undermining the special relationship. He succeeded in this. His cool, reserved demeanor with the US president restored dignity to London’s standing in the US and in Europe.
As far as substance is concerned, Brown sounded surprisingly hawkish on Iran (although more in his pre-trip press conferences than at the summit itself), while gently creating a little distance from Washington on the issue of a timetable for withdrawing troops from Iraq – Britain wants to be out sooner. But he may have missed an opportunity to clearly state his differences on the Middle East peace process. Britain is gingerly moving towards engaging Hamas and working with it to make it a legitimate and responsible actor. The White House has struck out in the opposite direction. President Bush last week announced a raft of initiatives meant to isolate Hamas and bolster its main rival, President Abbas. Gordon Brown remained largely silent on this point during his press conference with George Bush. This could mean that he agrees or – more likely – that he wanted to avoid a dispute in the open. And that is a pity. Because of the change of leadership in Europe, the prime minister is less constrained in his dealings with Washington than his predecessor. If he believes US policy on the Middle East to be wrong, this was the time to say it.
Tomas Valasek is director of foreign policy & defence at the Centre for European Reform.
Tuesday, July 24, 2007
Where next for Turkey?
By Katinka Barysch and Charles Grant
Some of Turkey’s critics say that it has no place in the EU because it is not a European country. Others criticise the quality of its democracy. The first group tends to focus on the Islamist philosophy of the ruling AK party, while the second group complains about the role of the armed forces in public life. The dramatic series of events in Turkey over the past four months should go some way towards reassuring both camps.
In April, the armed forces threatened the AKP over its choice of Abdullah Gul as its presidential candidate. The constitutional court declared the first round of voting in the parliament invalid. Millions marched in the streets in defence of secularism. Prime Minister Recep Tayyip Erdogan called an early election to defuse the crisis. His AK party won enough votes to form another single-party government.
These events show that Turkey’s democracy is maturing fast. Having hinted that it might launch a coup, the army has respected the democratic process and stayed in its barracks. The AKP won voters’ confidence by promoting a moderate brand of Islamism, and by adding more secular candidates and women to its electoral list. Celebrating his re-election, a statesman-like Erdogan called for reconciliation, reform and universal respect for Turkey’s secular constitution.
Erdogan will need all his considerable political skills to get through the challenges of the next twelve months. The election outcome was good for the AKP but it showed a country split down the middle. With 47 per cent of the vote, the AKP did significantly better than in 2002. Then, much of its support was due to voters’ disillusionment with a bickering and self-serving political establishment. This time round, its victory was a reward for good economic management and – despite the occasional backtracking – political moderation.
Some 38 per cent of Turkish voters opted for nationalist parties, if one adds up the votes of the hard-line MHP, the nominally centre-left CHP and Cem Uzan’s radical GP. There is little that unites these parties, apart from their attempts to portray the AKP as radical on Islam and limp-wristed on security. But the scare tactics of the secular establishment and the army obviously failed to convince most Turks.
Three of the 14 parties that ran in the election overcame the 10 per cent vote threshold for parliamentary representation; in the previous parliament it was only the AKP and the CHP. Now they are being joined by 71 MHP members and 28 ‘independents’, most of whom are from the Kurdish party, the DTP. So although the AKP received a higher share of the vote than in 2002, it will have fewer seats in parliament. With 342 MPs, the AKP still has enough votes to pass laws, but not to change the constitution or, importantly, elect a new president.
Turkey will hold a referendum on an AKP proposal to move the presidential election from the parliament to the people, but not until the autumn. So the next president will once again be chosen by Turkey’s 550 MPs. Two-thirds (or 367) of them need to be present to make the first round of voting valid, following a constitutional court ruling in April. If the CHP and the MHP boycotted the presidential ballot to prevent an AKP candidate winning, there would probably be another early election. Erdogan might try to push through his candidate with the help of the ‘independents’. But then the army would decry an Islamist-Kurdish conspiracy and roll back onto the political scene. It will not be easy to find a candidate that looks acceptable to both the secular-nationalist opposition and the more conservative parts of the AKP. But Erdogan should be able to do it. He may placate his own AKP by hinting that he could himself stand in the first popular presidential poll. If, as seems likely, Erdogan finds a compromise presidential candidate, he would undermine the army’s claim that Turkey’s secular order is under threat.
The AKP also faces tricky decisions over Iraq. It was perhaps no coincidence that General Yasar Buyukanit, Turkey’s army chief, asked for a mandate to take action against outposts of Kurdish PKK guerrillas in Northern Iraq, just a few months before the election. The government had little choice but to say No. Such cross-border incursions would wreck what is already a tense relationship with Washington and create considerable strains with the EU. And then there is the risk of the military getting bogged down in a prolonged guerrilla war on foreign territory. Nevertheless, the army’s persistent hectoring made the government look weak on the security front, and probably helped to increase the MHP’s share of the vote. If the PKK is sufficiently provocative – for example letting off big bombs in tourist resorts – the government would have little choice but to endorse a military intervention.
Once the presidential election is out of the way, the new government will have to get down to work. The AKP gets a lot of its legitimacy from its impressive economic record. Markets jumped with joy over the AKP’s re-election. But the government now faces the tricky task of putting its reform successes on a more sustainable footing. This will include continued privatisation (not least to attract the money to finance a current-account deficit that hit a worrying 8 per cent of GDP last year); an overhaul of social security; further improvements in the budget; better infrastructure (two million people a year are moving from the rural areas into already overcrowded cities) and labour market reforms. In this young country, around a quarter of a million jobs need to be created every year, just to keep the unemployment rate constant at 10 per cent.
The AKP will have to navigate these tricky waters at a time when the EU anchor has become loser. Nicolas Sarkozy has vetoed the opening of the chapter on economic and monetary union in Turkey’s accession negotiations, because he says that only full members need to bother with single currency rules. And Turkey, he claims, will not achieve that status so long as he is president. He wants the EU have another big debate about the future boundaries of Europe in December. His views on that are clear.
Erdogan is to be congratulated for his measured response to Sarkozy’s tactics. In the past, Turkish politicians often warned that EU wavering would result in a nationalist backlash and political instability in Turkey. But now Erdogan’s government is promising to soldier on with its EU preparations. “We will be ready in 2014”, he says, “irrespective of what the EU does”.
Much of the AKP’s positive agenda since 2002 has been inspired by the objective of EU accession. The party’s pro-EU credentials helped it to mitigate the deep suspicions it encountered among the urban elites. What would happen to the AKP’s reform plans and its legitimacy if Sarkozy succeeded in ruling out Turkey’s full membership? The new government needs the EU anchor to consolidate its successes.
Katinka Barysch is chief economist and Charles Grant is the Director of Centre for European Reform
Some of Turkey’s critics say that it has no place in the EU because it is not a European country. Others criticise the quality of its democracy. The first group tends to focus on the Islamist philosophy of the ruling AK party, while the second group complains about the role of the armed forces in public life. The dramatic series of events in Turkey over the past four months should go some way towards reassuring both camps.
In April, the armed forces threatened the AKP over its choice of Abdullah Gul as its presidential candidate. The constitutional court declared the first round of voting in the parliament invalid. Millions marched in the streets in defence of secularism. Prime Minister Recep Tayyip Erdogan called an early election to defuse the crisis. His AK party won enough votes to form another single-party government.
These events show that Turkey’s democracy is maturing fast. Having hinted that it might launch a coup, the army has respected the democratic process and stayed in its barracks. The AKP won voters’ confidence by promoting a moderate brand of Islamism, and by adding more secular candidates and women to its electoral list. Celebrating his re-election, a statesman-like Erdogan called for reconciliation, reform and universal respect for Turkey’s secular constitution.
Erdogan will need all his considerable political skills to get through the challenges of the next twelve months. The election outcome was good for the AKP but it showed a country split down the middle. With 47 per cent of the vote, the AKP did significantly better than in 2002. Then, much of its support was due to voters’ disillusionment with a bickering and self-serving political establishment. This time round, its victory was a reward for good economic management and – despite the occasional backtracking – political moderation.
Some 38 per cent of Turkish voters opted for nationalist parties, if one adds up the votes of the hard-line MHP, the nominally centre-left CHP and Cem Uzan’s radical GP. There is little that unites these parties, apart from their attempts to portray the AKP as radical on Islam and limp-wristed on security. But the scare tactics of the secular establishment and the army obviously failed to convince most Turks.
Three of the 14 parties that ran in the election overcame the 10 per cent vote threshold for parliamentary representation; in the previous parliament it was only the AKP and the CHP. Now they are being joined by 71 MHP members and 28 ‘independents’, most of whom are from the Kurdish party, the DTP. So although the AKP received a higher share of the vote than in 2002, it will have fewer seats in parliament. With 342 MPs, the AKP still has enough votes to pass laws, but not to change the constitution or, importantly, elect a new president.
Turkey will hold a referendum on an AKP proposal to move the presidential election from the parliament to the people, but not until the autumn. So the next president will once again be chosen by Turkey’s 550 MPs. Two-thirds (or 367) of them need to be present to make the first round of voting valid, following a constitutional court ruling in April. If the CHP and the MHP boycotted the presidential ballot to prevent an AKP candidate winning, there would probably be another early election. Erdogan might try to push through his candidate with the help of the ‘independents’. But then the army would decry an Islamist-Kurdish conspiracy and roll back onto the political scene. It will not be easy to find a candidate that looks acceptable to both the secular-nationalist opposition and the more conservative parts of the AKP. But Erdogan should be able to do it. He may placate his own AKP by hinting that he could himself stand in the first popular presidential poll. If, as seems likely, Erdogan finds a compromise presidential candidate, he would undermine the army’s claim that Turkey’s secular order is under threat.
The AKP also faces tricky decisions over Iraq. It was perhaps no coincidence that General Yasar Buyukanit, Turkey’s army chief, asked for a mandate to take action against outposts of Kurdish PKK guerrillas in Northern Iraq, just a few months before the election. The government had little choice but to say No. Such cross-border incursions would wreck what is already a tense relationship with Washington and create considerable strains with the EU. And then there is the risk of the military getting bogged down in a prolonged guerrilla war on foreign territory. Nevertheless, the army’s persistent hectoring made the government look weak on the security front, and probably helped to increase the MHP’s share of the vote. If the PKK is sufficiently provocative – for example letting off big bombs in tourist resorts – the government would have little choice but to endorse a military intervention.
Once the presidential election is out of the way, the new government will have to get down to work. The AKP gets a lot of its legitimacy from its impressive economic record. Markets jumped with joy over the AKP’s re-election. But the government now faces the tricky task of putting its reform successes on a more sustainable footing. This will include continued privatisation (not least to attract the money to finance a current-account deficit that hit a worrying 8 per cent of GDP last year); an overhaul of social security; further improvements in the budget; better infrastructure (two million people a year are moving from the rural areas into already overcrowded cities) and labour market reforms. In this young country, around a quarter of a million jobs need to be created every year, just to keep the unemployment rate constant at 10 per cent.
The AKP will have to navigate these tricky waters at a time when the EU anchor has become loser. Nicolas Sarkozy has vetoed the opening of the chapter on economic and monetary union in Turkey’s accession negotiations, because he says that only full members need to bother with single currency rules. And Turkey, he claims, will not achieve that status so long as he is president. He wants the EU have another big debate about the future boundaries of Europe in December. His views on that are clear.
Erdogan is to be congratulated for his measured response to Sarkozy’s tactics. In the past, Turkish politicians often warned that EU wavering would result in a nationalist backlash and political instability in Turkey. But now Erdogan’s government is promising to soldier on with its EU preparations. “We will be ready in 2014”, he says, “irrespective of what the EU does”.
Much of the AKP’s positive agenda since 2002 has been inspired by the objective of EU accession. The party’s pro-EU credentials helped it to mitigate the deep suspicions it encountered among the urban elites. What would happen to the AKP’s reform plans and its legitimacy if Sarkozy succeeded in ruling out Turkey’s full membership? The new government needs the EU anchor to consolidate its successes.
Katinka Barysch is chief economist and Charles Grant is the Director of Centre for European Reform
Wednesday, July 18, 2007
Of mice, men and the language of EU reform
by Hugo Brady
Beware the humourless, especially in politics. At a CER/Clifford Chance conference last week, Guiliano Amato, Italy’s interior minister, pronounced that the Reform Treaty was a return to familiar territory for the EU: an unreadable treaty. A few refused to get the joke, portraying Amato’s playful observation as an explosive revelation that the Reform Treaty is indeed the EU constitution encrypted. ("Loathsome smugness", seethes Open Europe’s blog).
How odd. The conference was clearly on the record and Amato's warmly ironic tone was anything but pompous. But Open Europe also missed the bigger point in Amato’s speech: his admission that we never had a real constitution to start with. Amato, a widely admired statesman and former prime minister, was vice-chair of the convention that first wrote the EU constitution in 2003. The convention, he said, had wrongly dressed up a set of fairly good ideas, designed to make the EU’s institutions, foreign and justice policies work better, as being something it was not: a grand constitution.
The governments stuck with the name ‘constitution’ in the hope, rather than the expectation, that it might grab the attention of citizens and make the EU more popular. But according to Amato, the document was always much more a ‘boy’ than a ‘girl’, referring to the French words ‘le traité’ (masculine) and ‘la constitution’ (feminine). This reflects the nature of the EU itself, which Amato christened a "hermaphrodite": not merely an inter-governmental organisation but far from being a state.
True, much of proposed Reform Treaty is to be taken from the wreck of the so-called constitution. But, aside from the name, other controversial aspects are being amended or dropped: there are about 20 significant changes in all. The new treaty will be completely stripped of any pretensions to be a US constitution-style founding charter. As the communications commissioner, Margot Wallström, who also addressed the conference, quipped: mice are genetically 90 per cent identical to human beings "but the remaining ten per cent makes all the difference".
Nonetheless language, legal and otherwise, matters in the European debate. Hence the outcry over Sarkozy’s deletion of a key reference to ‘undistorted competition’ from the new treaty or Commission president Barroso’s well-intentioned, but foolish, description of the EU as a new "non-imperial empire" (a misnomer in any case: a non-empire empire?). And now, when just about everyone else has finally accepted that the idea of a constitution for Europe is dead, British Eurosceptics cling to the term in a bid to pressure the government into holding a referendum.
Why? Sovereignty is hardly the issue. Sir Stephen Wall, another keynote speaker last Thursday, noted the British are blasé, in contrast with their European counterparts, on key issues of sovereignty like trade liberalisation and foreign ownership of industry. The thought of foreigners owning home-grown car industries makes continental politicians shiver; the British care little. Neither can it be a reaction to British politicians and diplomats having failed to defend national interests the negotiations on the treaty. Peter Altmaier, a minister in Angela Merkel's government, rather ruefully outlined to the conference how the UK had won the most from the three negotiations leading to this treaty: the convention, the 2004 inter-governmental conference on the constitution, and the recent June summit.
No, Eurosceptics here hope a referendum on Europe will be the beginning of the disengagement from the EU they long for. A referendum would be the perfect political arena to portray issues like the role of EU foreign policy or the primacy of EU law as an affront to British sovereignty and awake fears of what Hugh Gaitskill, a former Labour leader, famously called “the end of a thousand years of history”.
In the past, well meaning pro-Europeans and commentators have also called for a referendum in Britain on the EU, as a way of challenging the orthodoxies of the British European debate. This is wrong-headed. Yes, Gordon Brown should encourage passionate debate on Britain’s interests in Europe. But if he fails to stand firm against calls for a referendum, he risks opening a Pandora's box of obfuscation and media-fed nationalism, as well as handing a platform to fringe political forces from across the UK. (I exaggerate? Read Frederick Forsythe's "Pledge a referendum on Europe Mr Cameron", FT July 16th.) To paraphrase Gaitskill's wife, as she listened to the standing ovation elicited by his famous speech: a British referendum on Europe would make all the wrong people cheer.
Hugo Brady is a research fellow at the Centre for European Reform.
Beware the humourless, especially in politics. At a CER/Clifford Chance conference last week, Guiliano Amato, Italy’s interior minister, pronounced that the Reform Treaty was a return to familiar territory for the EU: an unreadable treaty. A few refused to get the joke, portraying Amato’s playful observation as an explosive revelation that the Reform Treaty is indeed the EU constitution encrypted. ("Loathsome smugness", seethes Open Europe’s blog).
How odd. The conference was clearly on the record and Amato's warmly ironic tone was anything but pompous. But Open Europe also missed the bigger point in Amato’s speech: his admission that we never had a real constitution to start with. Amato, a widely admired statesman and former prime minister, was vice-chair of the convention that first wrote the EU constitution in 2003. The convention, he said, had wrongly dressed up a set of fairly good ideas, designed to make the EU’s institutions, foreign and justice policies work better, as being something it was not: a grand constitution.
The governments stuck with the name ‘constitution’ in the hope, rather than the expectation, that it might grab the attention of citizens and make the EU more popular. But according to Amato, the document was always much more a ‘boy’ than a ‘girl’, referring to the French words ‘le traité’ (masculine) and ‘la constitution’ (feminine). This reflects the nature of the EU itself, which Amato christened a "hermaphrodite": not merely an inter-governmental organisation but far from being a state.
True, much of proposed Reform Treaty is to be taken from the wreck of the so-called constitution. But, aside from the name, other controversial aspects are being amended or dropped: there are about 20 significant changes in all. The new treaty will be completely stripped of any pretensions to be a US constitution-style founding charter. As the communications commissioner, Margot Wallström, who also addressed the conference, quipped: mice are genetically 90 per cent identical to human beings "but the remaining ten per cent makes all the difference".
Nonetheless language, legal and otherwise, matters in the European debate. Hence the outcry over Sarkozy’s deletion of a key reference to ‘undistorted competition’ from the new treaty or Commission president Barroso’s well-intentioned, but foolish, description of the EU as a new "non-imperial empire" (a misnomer in any case: a non-empire empire?). And now, when just about everyone else has finally accepted that the idea of a constitution for Europe is dead, British Eurosceptics cling to the term in a bid to pressure the government into holding a referendum.
Why? Sovereignty is hardly the issue. Sir Stephen Wall, another keynote speaker last Thursday, noted the British are blasé, in contrast with their European counterparts, on key issues of sovereignty like trade liberalisation and foreign ownership of industry. The thought of foreigners owning home-grown car industries makes continental politicians shiver; the British care little. Neither can it be a reaction to British politicians and diplomats having failed to defend national interests the negotiations on the treaty. Peter Altmaier, a minister in Angela Merkel's government, rather ruefully outlined to the conference how the UK had won the most from the three negotiations leading to this treaty: the convention, the 2004 inter-governmental conference on the constitution, and the recent June summit.
No, Eurosceptics here hope a referendum on Europe will be the beginning of the disengagement from the EU they long for. A referendum would be the perfect political arena to portray issues like the role of EU foreign policy or the primacy of EU law as an affront to British sovereignty and awake fears of what Hugh Gaitskill, a former Labour leader, famously called “the end of a thousand years of history”.
In the past, well meaning pro-Europeans and commentators have also called for a referendum in Britain on the EU, as a way of challenging the orthodoxies of the British European debate. This is wrong-headed. Yes, Gordon Brown should encourage passionate debate on Britain’s interests in Europe. But if he fails to stand firm against calls for a referendum, he risks opening a Pandora's box of obfuscation and media-fed nationalism, as well as handing a platform to fringe political forces from across the UK. (I exaggerate? Read Frederick Forsythe's "Pledge a referendum on Europe Mr Cameron", FT July 16th.) To paraphrase Gaitskill's wife, as she listened to the standing ovation elicited by his famous speech: a British referendum on Europe would make all the wrong people cheer.
Hugo Brady is a research fellow at the Centre for European Reform.
Wednesday, July 11, 2007
The EU should talk to Hamas
by Charles Grant and Clara O’Donnell
The conspicuous role of Hamas in the recent release of Alan Johnston was not only good news for the BBC correspondent. Hamas showed that it cares about how it is perceived abroad, that it wants to be considered a credible actor, and that it hopes to end its international isolation. This means that the EU and other outsiders have potential leverage over the organisation that rules Gaza. Several European governments believe that the Union should rethink its current policy of refusing to engage with Hamas. They argue, with much justice, that the attempt to weaken Hamas by isolating it has failed; and that this policy seems to have strengthened support for Hamas among Palestinians, while Fatah, its great rival, has suffered from being seen as the West’s favoured friend.
It is time for the EU to consider talking directly to Hamas. Currently, the position of the EU – alongside the other members of the quartet, the UN, the US and Russia – is that it will not talk unless three conditions are met: recognition of Israel, renunciation of violence, and acceptance of existing peace accords. And there remain many good arguments against the EU engaging with this Islamic group, such as its ambition for Islamic rule, its refusal to recognise Israel's right to exist, its links to violence and terror, and its numerous rocket attacks on Israelis. Although it won the last Palestinian elections, Hamas used force to seize power in Gaza in June 2007. That episode damaged its international credibility and its legitimacy as a winner of democratic elections, and it also limited the chances of getting Hamas and Fatah to work together constructively. Without a single government accepted as legitimate by most Palestinians, Israel has no partner to make peace with.
However, the EU should take note of some conciliatory moves from Hamas since it won the elections in January 2006. Hamas respected a unilateral ceasefire for six months. And when it became part of the government of national unity that was brokered by Saudi diplomacy at Mecca, Hamas tacitly accepted the Palestinian Authority’s existing international agreements. Furthermore, while Hamas has still not officially recognised Israel, its leader in Damascus, Khaled Meshaal, has said that the state of Israel is a "reality" and that “there will remain a state called Israel, this is a matter of fact”. At the moment Hamas is clearly not the kind of credible international actor that could be a serious partner for Israel; the argument is over the best way to turn it into such actor. And it is clear that the current policy is not working.
The EU should recognise that the policy of boycotting of Hamas but showering favours on Fatah in the West Bank has been at best ineffectual, and at worst it has contributed to radicalising Hamas and provoking Fatah’s overthrow in Gaza. The grim gap that now separates the two parts of Palestine is imposing unacceptable humanitarian costs – the Gaza economy is already in a dire state, largely because Israel closes most of the border crossings most of the time. So long as the EU continues to reject the outcome of legitimately-conducted elections, it exposes itself to accusations of double standards and reduces its credibility in the eyes of the many in the Arab world.
The EU should seek to entice the moderate elements in Hamas with the prospect of recognition and financial assistance, in exchange for good behaviour and a constructive attitude towards talks with Fatah. That could facilitate the return of a single government for all the Palestinian territories, which is a precondition for the revival of the peace process. The EU should not abandon the concept of conditionality, but of the three conditions the one it should worry about is the renunciation of violence. Were Hamas to return to suicide bombs or rocket attacks on Israel, the EU should have nothing to do with it.
Of course, there can be no peace in the region without the support of Israel and the US, both of which are strongly opposed to the recognition of Hamas. The EU must think very carefully about how it sells a new policy on Hamas to Israel and the United States. The ultimate goal in the Middle East is peace between Israel and the Palestinians, and if EU engagement with Hamas leads to a breakdown in the Union’s relations with Israel and the US, it will have achieved little. But the EU has a very strong argument to make. In the long term, it is in Israel’s interests that the moderate elements within Hamas – the strongest political entity in Palestine – be strengthened. Talks between the EU and Hamas could and should focus on that objective. The very process of talks with Hamas could have a transformational effect on the organisation, as was the case with the talks between the British government and the Irish Republican Army. Evidently, the talks might not produce that positive outcome. But neither the US nor Israel can claim that the status quo is doing much to enhance the security of Israelis.
The US, in its current pre-election phase, will be very reluctant to contemplate talking to Hamas. But in the Bush administration – which does not have to worry about winning votes in the next presidential election – moderates such as Condoleezza Rice now have the edge over hard-line Israel-firsters such as Dick Cheney. It is not inconceivable that the US could discreetly encourage the EU to take the lead in engaging with Hamas (as it earlier encouraged the EU to talk to Iran), while itself remaining aloof. The broader regional perspective may yet encourage the US – and possibly even Israel – to welcome the EU playing such a role. Given the growth of both Islamism and Iranian influence in the region stretching from Lebanon to Afghanistan, the US could reason that engaging Hamas would help to prevent an increase in the influence of either Iran or al-Qaeda in Gaza.
Charles Grant is the director and Clara O’Donnell is a research fellow at the Centre for European Reform.
The conspicuous role of Hamas in the recent release of Alan Johnston was not only good news for the BBC correspondent. Hamas showed that it cares about how it is perceived abroad, that it wants to be considered a credible actor, and that it hopes to end its international isolation. This means that the EU and other outsiders have potential leverage over the organisation that rules Gaza. Several European governments believe that the Union should rethink its current policy of refusing to engage with Hamas. They argue, with much justice, that the attempt to weaken Hamas by isolating it has failed; and that this policy seems to have strengthened support for Hamas among Palestinians, while Fatah, its great rival, has suffered from being seen as the West’s favoured friend.
It is time for the EU to consider talking directly to Hamas. Currently, the position of the EU – alongside the other members of the quartet, the UN, the US and Russia – is that it will not talk unless three conditions are met: recognition of Israel, renunciation of violence, and acceptance of existing peace accords. And there remain many good arguments against the EU engaging with this Islamic group, such as its ambition for Islamic rule, its refusal to recognise Israel's right to exist, its links to violence and terror, and its numerous rocket attacks on Israelis. Although it won the last Palestinian elections, Hamas used force to seize power in Gaza in June 2007. That episode damaged its international credibility and its legitimacy as a winner of democratic elections, and it also limited the chances of getting Hamas and Fatah to work together constructively. Without a single government accepted as legitimate by most Palestinians, Israel has no partner to make peace with.
However, the EU should take note of some conciliatory moves from Hamas since it won the elections in January 2006. Hamas respected a unilateral ceasefire for six months. And when it became part of the government of national unity that was brokered by Saudi diplomacy at Mecca, Hamas tacitly accepted the Palestinian Authority’s existing international agreements. Furthermore, while Hamas has still not officially recognised Israel, its leader in Damascus, Khaled Meshaal, has said that the state of Israel is a "reality" and that “there will remain a state called Israel, this is a matter of fact”. At the moment Hamas is clearly not the kind of credible international actor that could be a serious partner for Israel; the argument is over the best way to turn it into such actor. And it is clear that the current policy is not working.
The EU should recognise that the policy of boycotting of Hamas but showering favours on Fatah in the West Bank has been at best ineffectual, and at worst it has contributed to radicalising Hamas and provoking Fatah’s overthrow in Gaza. The grim gap that now separates the two parts of Palestine is imposing unacceptable humanitarian costs – the Gaza economy is already in a dire state, largely because Israel closes most of the border crossings most of the time. So long as the EU continues to reject the outcome of legitimately-conducted elections, it exposes itself to accusations of double standards and reduces its credibility in the eyes of the many in the Arab world.
The EU should seek to entice the moderate elements in Hamas with the prospect of recognition and financial assistance, in exchange for good behaviour and a constructive attitude towards talks with Fatah. That could facilitate the return of a single government for all the Palestinian territories, which is a precondition for the revival of the peace process. The EU should not abandon the concept of conditionality, but of the three conditions the one it should worry about is the renunciation of violence. Were Hamas to return to suicide bombs or rocket attacks on Israel, the EU should have nothing to do with it.
Of course, there can be no peace in the region without the support of Israel and the US, both of which are strongly opposed to the recognition of Hamas. The EU must think very carefully about how it sells a new policy on Hamas to Israel and the United States. The ultimate goal in the Middle East is peace between Israel and the Palestinians, and if EU engagement with Hamas leads to a breakdown in the Union’s relations with Israel and the US, it will have achieved little. But the EU has a very strong argument to make. In the long term, it is in Israel’s interests that the moderate elements within Hamas – the strongest political entity in Palestine – be strengthened. Talks between the EU and Hamas could and should focus on that objective. The very process of talks with Hamas could have a transformational effect on the organisation, as was the case with the talks between the British government and the Irish Republican Army. Evidently, the talks might not produce that positive outcome. But neither the US nor Israel can claim that the status quo is doing much to enhance the security of Israelis.
The US, in its current pre-election phase, will be very reluctant to contemplate talking to Hamas. But in the Bush administration – which does not have to worry about winning votes in the next presidential election – moderates such as Condoleezza Rice now have the edge over hard-line Israel-firsters such as Dick Cheney. It is not inconceivable that the US could discreetly encourage the EU to take the lead in engaging with Hamas (as it earlier encouraged the EU to talk to Iran), while itself remaining aloof. The broader regional perspective may yet encourage the US – and possibly even Israel – to welcome the EU playing such a role. Given the growth of both Islamism and Iranian influence in the region stretching from Lebanon to Afghanistan, the US could reason that engaging Hamas would help to prevent an increase in the influence of either Iran or al-Qaeda in Gaza.
Charles Grant is the director and Clara O’Donnell is a research fellow at the Centre for European Reform.
Friday, June 29, 2007
Why Europeans don’t have babies
by Katinka Barysch
Europeans live longer, work less and have fewer babies. On current trends, the EU will not have enough workers to pay for its growing number of pensioners. Economists and policymakers have moved beyond scratching their (greying) heads in despair. They focus on what can be done to alleviate and possibly reverse the trend. That is also what they did at last week’s Munich Economic Summit that brought together some of the world’s best people on the subject (http://www.munich-economic-summit.com/mes_2007/participants.htm).
The EU’s average fertility rate is now 1.5, well below the 2.1 needed to maintain the size of a population. In Germany and Italy, the fertility rate is closer to 1, which means that each generation is 60 per cent smaller than the previous one. Even more worrying but less well-known is the fact that population decline – just like population growth – is exponential. In Germany, the birth rate started to fall in the 1960, well before Italy, Spain and other EU countries. By the 1990s, Germany was running short of 20 or 30-something potential mothers. A country that has had low birth rates for decades ends up in a ‘fertility’ trap.
Another fact that is rarely taken into account is how demographics interact with economic geography. Young people and those with skills are the most likely to leave declining areas, and women are apparently more prone to moving than men. Germany’s eastern Laender are a frightening illustration of this trend. The number of young people has dwindled, leaving the over-60s to themselves in some places. And among the 10 per cent of the population that has left the eastern Laender, there were many more women than men. In some towns, there are 160 young men for 100 young women. The fact that those men left behind tend to be unqualified and unemployed gives women little incentive to return. Similar developments can already be observed in some parts of Central and Eastern Europe, as well as in the continent’s northern and southern fringes. Europe will not age homogenously. It will be a patchwork of booming regions and those that are inhabited by octogenarians and angry young men.
No-one is yet talking about demographic micro-management. But all EU countries do need to address the inevitable raise (in many cases doubling) of the old-age dependency ratio (the number of workers to pensioners). The list of possible solutions is by now well known: work longer and harder, accept more immigrants and have more babies. But each remedy has its limits, so Vladimir Špidla, the EU’s social affairs commissioner, talks about ‘mainstreaming’ demographic concerns into all policy areas, not only pension reforms, but also education, tax, labour market and infrastructure policies.
Population decline is a European problem – globally the population is growing by 200,000 a day, adding the equivalent of Switzerland every six weeks. Some of the fastest growth happens in the EU’s vicinity, especially in North Africa and the Middle East. Children and teenagers make up over half of the populations of Iraq and Somalia. Many of them will want to move to where jobs are better and life is more stable.
But immigration can only help to alleviate Europe’s pension pressures, it cannot solve the problem. Hans-Werner Sinn, head of the Ifo Institute that runs the Economic Summit, says that even if immigrants stayed young forever, the EU-15 would need more than 190 million immigrants to keep its dependency ratio constant until 2035.
Similarly, the retirement age would have to go up to 77 if governments were to rely on this step alone to fix the pension problem. Instead, they usually adopt reform packages that include a gradual raise in retirement ages, cuts in state pension payouts and adding fully-funded ‘pillars’ to the pension systems. There are some interesting and encouraging examples of reform, for example the ‘notional contribution’ systems implemented by Sweden, Poland and Latvia. These are pay-as-you-go systems that mimic fully-funded pensions because each worker’s contributions are added up in a notional account’. Since the pension pay-out depends on how much a worker has paid in, people have an incentive to retire later.
In most other European countries reforms have been overly cautious, which may have something to do with the growing voting power of Europe’s elderly. Not only is the number of over-50s rising steadily, they also tend to be more politically active. In the last US presidential election, for example, 70 per cent of those over 65 voted, but only a third of the 18-24 year-olds. Pension reform would have to happen now, before the baby boom generation retires. But there is little sign of this.
Meanwhile, family-friendly policies are becoming increasingly popular, across the political spectrum. Munich’s assembled economists were unanimous that higher birth rates cannot solve Europe’s pension problem in the short run. Even an immediate doubling of the birth rates would only have an impact on dependency ratios in 30 years or so. But in the long run, Europe will need more babies to mitigate the economic consequences of an ageing and shrinking workforce. Can and should governments get involved?
Economists have calculated that bringing up a child costs €150,000 to €300,000 and that each child contributes a net €140,000 to a country’s pension system. The parents bear the costs but the benefits also go to those pensioners that have not raised children themselves. Therefore, some economists suggest that people with children should pay less tax and get bigger pensions. Others argue that state-funded childcare institutions are a better and more immediate way of redistributing money to those with children. The fact that France offers day care for all children over three may have helped with its impressive fertility rates. But childcare facilities alone do not make a difference: Germany’s eastern Laender have many more nurseries but fewer babies than the western part of the country.
A quick fix will not work. France has had pro-family policies since the 1870s. In Scandinavia, support for women and children runs through all aspects of life. David Willetts, the Conservative Party’s Secretary of State for Education and Skills approvingly speaks of ‘state feminism’. Nor do values or religion explain birth rates. Fertility rates are lowest in traditionalist countries with rigid family structures, such as Italy, Greece or Spain, but also Japan, South Korea and Iran. They are highest in those places that allow women to combine work with bringing up children. France’s 35-hour week gives parents plenty of free time to look after their offspring. Flexible labour markets in the UK and the US offers part-time job and makes it easier for women to go back to work after a maternity break.
Germany is almost an example of how not to do it. Education takes too long, often up to 20 years, which forces many women to delay having kids until their 30s. Women now tend to be better educated than men. But they struggle to find matching partners since many high-earning men prefer traditional stay-at-home wives. Over 40 per cent of German women expect that having a baby would be the end of their professional career. They have a point: schools close at mid-day and private child care is expensive. Part-time jobs are rare and often come without perks and social security. The expectations towards women that juggle work and kids are crushing, says Regine Stachelhaus, who admits that she only managed to bring up her son and run Hewlett Packard in Germany because her musician husband did not work regular hours.
Incidentally, Frau Stachelhaus was the only female speaker at this two-day conference. I counted fewer than ten women among the 150-odd participants. I would have though that women have a lot to contribute to debates about having babies, juggling work and families and caring for the elderly.
Katinka Barysch is chief economist at the Centre for European Reform.
Europeans live longer, work less and have fewer babies. On current trends, the EU will not have enough workers to pay for its growing number of pensioners. Economists and policymakers have moved beyond scratching their (greying) heads in despair. They focus on what can be done to alleviate and possibly reverse the trend. That is also what they did at last week’s Munich Economic Summit that brought together some of the world’s best people on the subject (http://www.munich-economic-summit.com/mes_2007/participants.htm).
The EU’s average fertility rate is now 1.5, well below the 2.1 needed to maintain the size of a population. In Germany and Italy, the fertility rate is closer to 1, which means that each generation is 60 per cent smaller than the previous one. Even more worrying but less well-known is the fact that population decline – just like population growth – is exponential. In Germany, the birth rate started to fall in the 1960, well before Italy, Spain and other EU countries. By the 1990s, Germany was running short of 20 or 30-something potential mothers. A country that has had low birth rates for decades ends up in a ‘fertility’ trap.
Another fact that is rarely taken into account is how demographics interact with economic geography. Young people and those with skills are the most likely to leave declining areas, and women are apparently more prone to moving than men. Germany’s eastern Laender are a frightening illustration of this trend. The number of young people has dwindled, leaving the over-60s to themselves in some places. And among the 10 per cent of the population that has left the eastern Laender, there were many more women than men. In some towns, there are 160 young men for 100 young women. The fact that those men left behind tend to be unqualified and unemployed gives women little incentive to return. Similar developments can already be observed in some parts of Central and Eastern Europe, as well as in the continent’s northern and southern fringes. Europe will not age homogenously. It will be a patchwork of booming regions and those that are inhabited by octogenarians and angry young men.
No-one is yet talking about demographic micro-management. But all EU countries do need to address the inevitable raise (in many cases doubling) of the old-age dependency ratio (the number of workers to pensioners). The list of possible solutions is by now well known: work longer and harder, accept more immigrants and have more babies. But each remedy has its limits, so Vladimir Špidla, the EU’s social affairs commissioner, talks about ‘mainstreaming’ demographic concerns into all policy areas, not only pension reforms, but also education, tax, labour market and infrastructure policies.
Population decline is a European problem – globally the population is growing by 200,000 a day, adding the equivalent of Switzerland every six weeks. Some of the fastest growth happens in the EU’s vicinity, especially in North Africa and the Middle East. Children and teenagers make up over half of the populations of Iraq and Somalia. Many of them will want to move to where jobs are better and life is more stable.
But immigration can only help to alleviate Europe’s pension pressures, it cannot solve the problem. Hans-Werner Sinn, head of the Ifo Institute that runs the Economic Summit, says that even if immigrants stayed young forever, the EU-15 would need more than 190 million immigrants to keep its dependency ratio constant until 2035.
Similarly, the retirement age would have to go up to 77 if governments were to rely on this step alone to fix the pension problem. Instead, they usually adopt reform packages that include a gradual raise in retirement ages, cuts in state pension payouts and adding fully-funded ‘pillars’ to the pension systems. There are some interesting and encouraging examples of reform, for example the ‘notional contribution’ systems implemented by Sweden, Poland and Latvia. These are pay-as-you-go systems that mimic fully-funded pensions because each worker’s contributions are added up in a notional account’. Since the pension pay-out depends on how much a worker has paid in, people have an incentive to retire later.
In most other European countries reforms have been overly cautious, which may have something to do with the growing voting power of Europe’s elderly. Not only is the number of over-50s rising steadily, they also tend to be more politically active. In the last US presidential election, for example, 70 per cent of those over 65 voted, but only a third of the 18-24 year-olds. Pension reform would have to happen now, before the baby boom generation retires. But there is little sign of this.
Meanwhile, family-friendly policies are becoming increasingly popular, across the political spectrum. Munich’s assembled economists were unanimous that higher birth rates cannot solve Europe’s pension problem in the short run. Even an immediate doubling of the birth rates would only have an impact on dependency ratios in 30 years or so. But in the long run, Europe will need more babies to mitigate the economic consequences of an ageing and shrinking workforce. Can and should governments get involved?
Economists have calculated that bringing up a child costs €150,000 to €300,000 and that each child contributes a net €140,000 to a country’s pension system. The parents bear the costs but the benefits also go to those pensioners that have not raised children themselves. Therefore, some economists suggest that people with children should pay less tax and get bigger pensions. Others argue that state-funded childcare institutions are a better and more immediate way of redistributing money to those with children. The fact that France offers day care for all children over three may have helped with its impressive fertility rates. But childcare facilities alone do not make a difference: Germany’s eastern Laender have many more nurseries but fewer babies than the western part of the country.
A quick fix will not work. France has had pro-family policies since the 1870s. In Scandinavia, support for women and children runs through all aspects of life. David Willetts, the Conservative Party’s Secretary of State for Education and Skills approvingly speaks of ‘state feminism’. Nor do values or religion explain birth rates. Fertility rates are lowest in traditionalist countries with rigid family structures, such as Italy, Greece or Spain, but also Japan, South Korea and Iran. They are highest in those places that allow women to combine work with bringing up children. France’s 35-hour week gives parents plenty of free time to look after their offspring. Flexible labour markets in the UK and the US offers part-time job and makes it easier for women to go back to work after a maternity break.
Germany is almost an example of how not to do it. Education takes too long, often up to 20 years, which forces many women to delay having kids until their 30s. Women now tend to be better educated than men. But they struggle to find matching partners since many high-earning men prefer traditional stay-at-home wives. Over 40 per cent of German women expect that having a baby would be the end of their professional career. They have a point: schools close at mid-day and private child care is expensive. Part-time jobs are rare and often come without perks and social security. The expectations towards women that juggle work and kids are crushing, says Regine Stachelhaus, who admits that she only managed to bring up her son and run Hewlett Packard in Germany because her musician husband did not work regular hours.
Incidentally, Frau Stachelhaus was the only female speaker at this two-day conference. I counted fewer than ten women among the 150-odd participants. I would have though that women have a lot to contribute to debates about having babies, juggling work and families and caring for the elderly.
Katinka Barysch is chief economist at the Centre for European Reform.
Tuesday, June 26, 2007
What the summit says about the EU
by Katinka Barysch
At 4.30am on Saturday 23rd June, after 36 hours of wrangling, EU leaders agreed on a deal to revive parts of the failed EU constitutional treaty. The biggest changes will concern not the transfer of powers from the member-states to EU institutions, but the way the Union functions. They are:
* A semi-permanent president of the Council will replace the 6-monthly rotating presidency. The various formations of the Council of Ministers will still be chaired by the rotating presidency.
* The exception is the Council of Foreign Ministers, which will be chaired by the new High Representative for EU Foreign and Security Policy (this post is a merger of those held by the current High Representative, Javier Solana, and the commissioner for external relations, Benita Ferrero-Waldner).
* A new double-majority voting system for the Council of Ministers, under which a decision is passed when it is backed by 55% of the members-states, so long as these represent 65% of the EU’s population.
* The powers of both national parliaments and the European Parliament in EU law-making will be strengthened.
*From 2014 onwards, the Commission will only have 18 members (the seats will rotate among the 28 EU member-states, with Croatia likely to join before 2014).
This summit was the most critical meeting of EU leaders since the 2004 enlargement and the 2005 failure of the constitutional treaty. It is therefore interesting to look at what the negotiations and the outcome say about the state of the Union.
Germany
The summit confirmed Angela Merkel's role as Europe’s star politician. Few doubted that she had the ability to get a deal, following her success at the EU’s March summit on climate change and the G8 meeting earlier in June. However, the Brussels summit was a particularly difficult balancing act. Merkel not only needed a successful conclusion to the German EU presidency. She also needed to save the grand coalition between her Christian Democrats (CDU) and the Social Democratic Party (SPD). In the week preceding the summit, the coalition had come to the brink of collapse over plans to introduce a general minimum wage in Germany.
Moreover, after the G8 summit, SPD leaders were incensed that Merkel was taking too much credit for Germany’s foreign policy successes. So Merkel took care to consult more with the SPD. And in a very unusual step, she allowed her foreign minister, the SPD’s Frank-Walter Steinmeier, to join the opening dinner of EU heads of state and government. This was meant to signal that the SPD was an equal partner in the treaty negotiations. It seems to have worked. Merkel got plenty of compliments for her summit performance, not only from the CDU (and its sister party, the CSU), but also from the SPD.
Merkel delivered more than many people had expected, in fact. The official objective of the German presidency was to get a negotiating mandate for a new inter-governmental conference (IGC): it was not strictly necessary for Merkel to get agreements on the minutiae of the new treaty. But aware that the subsequent Portuguese presidency would not have the same diplomatic clout, Merkel aimed to settle as many outstanding issues as possible. The resulting deal was so comprehensive that it surprised even the optimists.
Poland
The country that came closest to wrecking Merkel’s summit was Poland. Lech and Jaroslav Kaczynski, respectively president and prime minister, had raised the stakes through their “square root or death” rhetoric. After Merkel refused to re-open the debate about the voting system, the Kaczynskis threatened to veto the entire package. Merkel, in turn, raised the spectre of convening the IGC without Poland. Merkel got most of Europe’s sympathies after Jaroslav Kaczynski said that Germany owed Poland the new voting system: if it had not been for the second world war, Poland’s population today would be 66 million, instead of 38 million. Perhaps someone should have reminded Poland that the EU was set up to overcome the divisions of the world wars, not to perpetuate them.
Merkel alone could not sway the Kaczynskis. It took the help of several others, notably France’s Nicolas Sarkozy, Britain’s Tony Blair, Spain’s José Luis Zapatero and Lithuania’s Valdas Adamkus. Finally, the Poles compromised: the EU will adopt the double majority voting system – not in 2009, when the new treaty is likely to come into force but in 2014 (followed by another three-year transition period). Poland also secured a clause on energy solidarity in the treaty, and a clause that insulated Polish law-making on morality, family and religion from the treaty's charter of rights.
Lech Kazcynski welcomed the EU’s “solidarity” in these matters, but many member-states will take the summit as yet another sign that Poland is Europe’s trouble-maker. Warsaw appears to have drawn the wrong lesson from its success at the recent EU-Russia summit. At the Samara meeting, Merkel and Commission president José Manuel Barroso expressed solidarity with Poland over the Russian ban on Polish meat imports. (Warsaw has been blocking the start of negotiations on a new EU-Russia treaty since late 2006 because of the ban). By siding with Poland Merkel and Barroso also raised hopes that the country would in turn show a more constructive stance on the new EU treaty. However, the opposite happened. The Polish government now seems to think that the use or threat of a veto is a good way of getting what you want in the EU. In the end, Poland could be the biggest loser from the summit. It has secured a bit more voting power until 2014. But this could be pretty useless if other EU countries are unwilling to forge coalitions with a government that is seen as uncompromising. Some of Poland’s traditional allies in Central Europe already turned against it at the summit.
France
President Sarkozy continued his hyper-active and unpredictable diplomacy that had also been on show during the G8 summit. Although Sarkozy, like Blair, helped Merkel to broker a deal with the Poles, he also criticised her for attempting to isolate Poland. It would be impossible, he said, that less than 20 years after the fall of the Berlin Wall, the EU should exclude the greatest of the East European countries. Surely the contrast to the dismissive tone that Jacques Chirac had adopted vis-à-vis the new members was no coincidence. Sarkozy also made it very clear that he would not put all his EU eggs into the Franco-German basket.
Sarkozy also surprised his European peers with a last-minute request to delete the commitment to “free and undistorted” competition from the EU treaty while “full employment” and “social progress” will remain as objectives. A fight-back by the British and the Commission followed, with the result that the competition objective will be included in a protocol attached to the new treaty, but business and competition lawyers are nevertheless worried.
There are two interpretations of Sarkozy’s move. He may need something visible and popular to help him stave off calls for a repeat referendum. After all, many French voters said they had disliked the constitution because they found it too liberal. Alternatively, this was his opening salvo in an attempt push for less liberal, more protectionist EU policies. After the summit he said that the elimination of the clause would allow for an EU competition policy that protects “national champions”.
Britain
Any further protectionist initiatives would put Sarkozy on collision course with Gordon Brown, who is soon to become prime minister. Blair and Brown had displayed a rare spirit of co-operation when they worked out the UK’s negotiating position and red lines ahead of the summit. It seems odd that they made a last minute demand to cut the powers and resources of the new foreign minister, given that Britain had been behind the initiative to create the foreign minister. The fact that Britain eventually dropped its demands (with the exception of the renaming, so that the foreign minister becomes the High Representative) suggests that these may have been tactical moves to get Britain what it really wanted: opt-outs from justice and home affairs and social security, and safeguards that the charter of fundamental rights will not impinge on British law. With his popularity now exceeding that of David Cameron, Brown should be able to avoid a referendum on the treaty. Meanwhile, the other European leaders will like the fact that Brown decided to work with Blair towards a summit success, rather than threatening to block the new treaty to appease the eurosceptics at home.
The EU
The Brussels summit has shown that the EU-27 can still reach difficult decisions. Long and arduous talks are nothing new for the EU. The 2000 Nice summit also took until the early morning hours and was, if anything, more vexing than last weekend’s meeting. Moreover, the EU cannot be neatly divided into old and new Europe. Hungary, Slovakia and – after some prevarications – also the Czech Republic had rebuffed Polish suggestions that the Visegrad four should stick together. The summit may also be taken as a sign that large countries still call the shots, perhaps more so than before enlargement. Germany, France, Britain, Poland and to a lesser extent Spain were the main players during the summit. The need to avoid a repeat referendum had strengthened the Dutch voice in the negotiations. Among the smaller countries, only two came into view: Lithuania (useful as a mediator with Poland) and Luxembourg (as the self-declared spokesman of those countries that had already ratified the constitution).
Katinka Barysch is chief economist at the Centre for European Reform.
At 4.30am on Saturday 23rd June, after 36 hours of wrangling, EU leaders agreed on a deal to revive parts of the failed EU constitutional treaty. The biggest changes will concern not the transfer of powers from the member-states to EU institutions, but the way the Union functions. They are:
* A semi-permanent president of the Council will replace the 6-monthly rotating presidency. The various formations of the Council of Ministers will still be chaired by the rotating presidency.
* The exception is the Council of Foreign Ministers, which will be chaired by the new High Representative for EU Foreign and Security Policy (this post is a merger of those held by the current High Representative, Javier Solana, and the commissioner for external relations, Benita Ferrero-Waldner).
* A new double-majority voting system for the Council of Ministers, under which a decision is passed when it is backed by 55% of the members-states, so long as these represent 65% of the EU’s population.
* The powers of both national parliaments and the European Parliament in EU law-making will be strengthened.
*From 2014 onwards, the Commission will only have 18 members (the seats will rotate among the 28 EU member-states, with Croatia likely to join before 2014).
This summit was the most critical meeting of EU leaders since the 2004 enlargement and the 2005 failure of the constitutional treaty. It is therefore interesting to look at what the negotiations and the outcome say about the state of the Union.
Germany
The summit confirmed Angela Merkel's role as Europe’s star politician. Few doubted that she had the ability to get a deal, following her success at the EU’s March summit on climate change and the G8 meeting earlier in June. However, the Brussels summit was a particularly difficult balancing act. Merkel not only needed a successful conclusion to the German EU presidency. She also needed to save the grand coalition between her Christian Democrats (CDU) and the Social Democratic Party (SPD). In the week preceding the summit, the coalition had come to the brink of collapse over plans to introduce a general minimum wage in Germany.
Moreover, after the G8 summit, SPD leaders were incensed that Merkel was taking too much credit for Germany’s foreign policy successes. So Merkel took care to consult more with the SPD. And in a very unusual step, she allowed her foreign minister, the SPD’s Frank-Walter Steinmeier, to join the opening dinner of EU heads of state and government. This was meant to signal that the SPD was an equal partner in the treaty negotiations. It seems to have worked. Merkel got plenty of compliments for her summit performance, not only from the CDU (and its sister party, the CSU), but also from the SPD.
Merkel delivered more than many people had expected, in fact. The official objective of the German presidency was to get a negotiating mandate for a new inter-governmental conference (IGC): it was not strictly necessary for Merkel to get agreements on the minutiae of the new treaty. But aware that the subsequent Portuguese presidency would not have the same diplomatic clout, Merkel aimed to settle as many outstanding issues as possible. The resulting deal was so comprehensive that it surprised even the optimists.
Poland
The country that came closest to wrecking Merkel’s summit was Poland. Lech and Jaroslav Kaczynski, respectively president and prime minister, had raised the stakes through their “square root or death” rhetoric. After Merkel refused to re-open the debate about the voting system, the Kaczynskis threatened to veto the entire package. Merkel, in turn, raised the spectre of convening the IGC without Poland. Merkel got most of Europe’s sympathies after Jaroslav Kaczynski said that Germany owed Poland the new voting system: if it had not been for the second world war, Poland’s population today would be 66 million, instead of 38 million. Perhaps someone should have reminded Poland that the EU was set up to overcome the divisions of the world wars, not to perpetuate them.
Merkel alone could not sway the Kaczynskis. It took the help of several others, notably France’s Nicolas Sarkozy, Britain’s Tony Blair, Spain’s José Luis Zapatero and Lithuania’s Valdas Adamkus. Finally, the Poles compromised: the EU will adopt the double majority voting system – not in 2009, when the new treaty is likely to come into force but in 2014 (followed by another three-year transition period). Poland also secured a clause on energy solidarity in the treaty, and a clause that insulated Polish law-making on morality, family and religion from the treaty's charter of rights.
Lech Kazcynski welcomed the EU’s “solidarity” in these matters, but many member-states will take the summit as yet another sign that Poland is Europe’s trouble-maker. Warsaw appears to have drawn the wrong lesson from its success at the recent EU-Russia summit. At the Samara meeting, Merkel and Commission president José Manuel Barroso expressed solidarity with Poland over the Russian ban on Polish meat imports. (Warsaw has been blocking the start of negotiations on a new EU-Russia treaty since late 2006 because of the ban). By siding with Poland Merkel and Barroso also raised hopes that the country would in turn show a more constructive stance on the new EU treaty. However, the opposite happened. The Polish government now seems to think that the use or threat of a veto is a good way of getting what you want in the EU. In the end, Poland could be the biggest loser from the summit. It has secured a bit more voting power until 2014. But this could be pretty useless if other EU countries are unwilling to forge coalitions with a government that is seen as uncompromising. Some of Poland’s traditional allies in Central Europe already turned against it at the summit.
France
President Sarkozy continued his hyper-active and unpredictable diplomacy that had also been on show during the G8 summit. Although Sarkozy, like Blair, helped Merkel to broker a deal with the Poles, he also criticised her for attempting to isolate Poland. It would be impossible, he said, that less than 20 years after the fall of the Berlin Wall, the EU should exclude the greatest of the East European countries. Surely the contrast to the dismissive tone that Jacques Chirac had adopted vis-à-vis the new members was no coincidence. Sarkozy also made it very clear that he would not put all his EU eggs into the Franco-German basket.
Sarkozy also surprised his European peers with a last-minute request to delete the commitment to “free and undistorted” competition from the EU treaty while “full employment” and “social progress” will remain as objectives. A fight-back by the British and the Commission followed, with the result that the competition objective will be included in a protocol attached to the new treaty, but business and competition lawyers are nevertheless worried.
There are two interpretations of Sarkozy’s move. He may need something visible and popular to help him stave off calls for a repeat referendum. After all, many French voters said they had disliked the constitution because they found it too liberal. Alternatively, this was his opening salvo in an attempt push for less liberal, more protectionist EU policies. After the summit he said that the elimination of the clause would allow for an EU competition policy that protects “national champions”.
Britain
Any further protectionist initiatives would put Sarkozy on collision course with Gordon Brown, who is soon to become prime minister. Blair and Brown had displayed a rare spirit of co-operation when they worked out the UK’s negotiating position and red lines ahead of the summit. It seems odd that they made a last minute demand to cut the powers and resources of the new foreign minister, given that Britain had been behind the initiative to create the foreign minister. The fact that Britain eventually dropped its demands (with the exception of the renaming, so that the foreign minister becomes the High Representative) suggests that these may have been tactical moves to get Britain what it really wanted: opt-outs from justice and home affairs and social security, and safeguards that the charter of fundamental rights will not impinge on British law. With his popularity now exceeding that of David Cameron, Brown should be able to avoid a referendum on the treaty. Meanwhile, the other European leaders will like the fact that Brown decided to work with Blair towards a summit success, rather than threatening to block the new treaty to appease the eurosceptics at home.
The EU
The Brussels summit has shown that the EU-27 can still reach difficult decisions. Long and arduous talks are nothing new for the EU. The 2000 Nice summit also took until the early morning hours and was, if anything, more vexing than last weekend’s meeting. Moreover, the EU cannot be neatly divided into old and new Europe. Hungary, Slovakia and – after some prevarications – also the Czech Republic had rebuffed Polish suggestions that the Visegrad four should stick together. The summit may also be taken as a sign that large countries still call the shots, perhaps more so than before enlargement. Germany, France, Britain, Poland and to a lesser extent Spain were the main players during the summit. The need to avoid a repeat referendum had strengthened the Dutch voice in the negotiations. Among the smaller countries, only two came into view: Lithuania (useful as a mediator with Poland) and Luxembourg (as the self-declared spokesman of those countries that had already ratified the constitution).
Katinka Barysch is chief economist at the Centre for European Reform.
Thursday, June 21, 2007
What do you do with a problem like Poland?
by Paweł Świeboda
Behind the scenes, Angela Merkel has striven to get agreement on a mandate for treaty change ahead of this week’s EU summit. She has by now dealt with concerns of most of the key players in the debate – France, the Netherlands and the UK. But Poland, and its objections to a new EU voting system of ‘double majority’ voting, seems immovable.
Warsaw’s ruling Kaczyński brothers are a unique political phenomenon. Some of their thinking comes straight from the 19th century and their rhetoric can be aggressively nationalist. Their negotiating position is rigidly negative, even going against the grain of public opinion in Poland itself. They seem undecided as to whether they want Poland to be a confident big member-state or a claustrophobic one that is stuck in a fortress mentality.
The Kaczyńskis are wrong to oppose the introduction of the double majority voting rules, according to which a measure would pass if it wins the support of 55 percent of the member-states, representing 65 per cent of the EU's population. This system would make the EU more democratic and more transparent. Their alternative voting proposal, based on a formula linked to the square root of member-state populations, is pure political fiction. Only the eurosceptic Czechs support it, and then only tentatively. Poland’s real intention is to delay discussions on the treaty in the hope that the process gets derailed at a later stage.
Do not dismiss the twins’ stance as hopelessly irrational. Votes matter in the EU. While countries almost never formally cast their vote, the allocation of votes represents a balance of power that counts from the very beginning of the law-making process. When an EU presidency tries to strike a deal in the Council, it is well aware whether it carries a qualified majority with it. The double majority system, originally agreed in the constitutional treaty negotiations, is a sensible expression of the EU’s nature as a union of states and citizens. But it does disproportionately favour bigger member-states, and could lead to them dominating almost all EU business. The combined votes of the three bigger member-states, with a smaller companion, can block any legislation and hence control the EU’s agenda.
The Kaczyński brothers are also right to point out that other member-states have asked for and are getting concessions in the treaty debate. So why deny Poland the right to have problems with the current deal that the Germans are presenting? True, the double majority voting system lies at the core of a delicately balanced compromise that took years to negotiate and finalise. And the Poles’ aggressive tactics and almost palpable desire for a stand-off with Germany are hardly conducive to building the alliances they need to achieve their goal. On the other hand, Berlin’s plan to isolate Warsaw and place it under insurmountable pressure will not work. Better to offer Poland a sensible compromise instead.
Poland should first of all accept that the double majority voting system is here to stay. It remains the best available compromise on an extremely sensitive issue for the member-states. To undo it would risk triggering interminable arguments over the institutions, which no country wants and which the EU cannot afford. But the Germans should offer the Poles a way out of their problem. Germany could accept that the EU retains the old Nice rules – which give Poland a particularly good deal – until 2014, for the issues that matter most to Poland. These issues would include talks on reforming the EU’s budget, and funding to develop the EU’s poorest regions. It is true that the overall agreement on the EU budget requires unanimity. But Poland fears losing its bargaining power over the legislative acts which translate the budget agreement into practice, and which are subject to majority vote. The EU has done this kind of deal before. During the negotiation of the Maastricht treaty, the member-states agreed to continue using old voting rules on controversial environmental issues for a transition period.
There are other possible concessions that could be offered to the Poland. The government’s mathematicians have calculated that Poland’s influence on EU votes would increase if the number of countries needed for an agreement was lowered below 55 per cent; or if the population requirement was raised above 65 per cent. Hence an adjustment these thresholds could help. Warsaw could also be compensated with extra seats in the European Parliament – that is an issue on which it was badly treated in the initial deal on the constitutional treaty.
Finally, Germany could offer to restrain its own position in the new voting system by accepting a cap on its population estimate – say at 70 million. This would seal Polish-German reconciliation inside the European Union (and help take some of the sting out of the enlargement debate and the eventual accession of Turkey). After all, it took many years for France to feel comfortable with the notion that Germany would gain a greater voting weight than itself in the Council of Ministers.
Angela Merkel is on the right track in trying to forge an agreement at the Brussels summit. Her leadership has been impressive thus far. But she should not underestimate the dogged determination of Poland’s leaders or make the mistake of thinking that they will fold under enough pressure. They will not.
By Paweł Świeboda, director of DemosEuropa, Warsaw
Behind the scenes, Angela Merkel has striven to get agreement on a mandate for treaty change ahead of this week’s EU summit. She has by now dealt with concerns of most of the key players in the debate – France, the Netherlands and the UK. But Poland, and its objections to a new EU voting system of ‘double majority’ voting, seems immovable.
Warsaw’s ruling Kaczyński brothers are a unique political phenomenon. Some of their thinking comes straight from the 19th century and their rhetoric can be aggressively nationalist. Their negotiating position is rigidly negative, even going against the grain of public opinion in Poland itself. They seem undecided as to whether they want Poland to be a confident big member-state or a claustrophobic one that is stuck in a fortress mentality.
The Kaczyńskis are wrong to oppose the introduction of the double majority voting rules, according to which a measure would pass if it wins the support of 55 percent of the member-states, representing 65 per cent of the EU's population. This system would make the EU more democratic and more transparent. Their alternative voting proposal, based on a formula linked to the square root of member-state populations, is pure political fiction. Only the eurosceptic Czechs support it, and then only tentatively. Poland’s real intention is to delay discussions on the treaty in the hope that the process gets derailed at a later stage.
Do not dismiss the twins’ stance as hopelessly irrational. Votes matter in the EU. While countries almost never formally cast their vote, the allocation of votes represents a balance of power that counts from the very beginning of the law-making process. When an EU presidency tries to strike a deal in the Council, it is well aware whether it carries a qualified majority with it. The double majority system, originally agreed in the constitutional treaty negotiations, is a sensible expression of the EU’s nature as a union of states and citizens. But it does disproportionately favour bigger member-states, and could lead to them dominating almost all EU business. The combined votes of the three bigger member-states, with a smaller companion, can block any legislation and hence control the EU’s agenda.
The Kaczyński brothers are also right to point out that other member-states have asked for and are getting concessions in the treaty debate. So why deny Poland the right to have problems with the current deal that the Germans are presenting? True, the double majority voting system lies at the core of a delicately balanced compromise that took years to negotiate and finalise. And the Poles’ aggressive tactics and almost palpable desire for a stand-off with Germany are hardly conducive to building the alliances they need to achieve their goal. On the other hand, Berlin’s plan to isolate Warsaw and place it under insurmountable pressure will not work. Better to offer Poland a sensible compromise instead.
Poland should first of all accept that the double majority voting system is here to stay. It remains the best available compromise on an extremely sensitive issue for the member-states. To undo it would risk triggering interminable arguments over the institutions, which no country wants and which the EU cannot afford. But the Germans should offer the Poles a way out of their problem. Germany could accept that the EU retains the old Nice rules – which give Poland a particularly good deal – until 2014, for the issues that matter most to Poland. These issues would include talks on reforming the EU’s budget, and funding to develop the EU’s poorest regions. It is true that the overall agreement on the EU budget requires unanimity. But Poland fears losing its bargaining power over the legislative acts which translate the budget agreement into practice, and which are subject to majority vote. The EU has done this kind of deal before. During the negotiation of the Maastricht treaty, the member-states agreed to continue using old voting rules on controversial environmental issues for a transition period.
There are other possible concessions that could be offered to the Poland. The government’s mathematicians have calculated that Poland’s influence on EU votes would increase if the number of countries needed for an agreement was lowered below 55 per cent; or if the population requirement was raised above 65 per cent. Hence an adjustment these thresholds could help. Warsaw could also be compensated with extra seats in the European Parliament – that is an issue on which it was badly treated in the initial deal on the constitutional treaty.
Finally, Germany could offer to restrain its own position in the new voting system by accepting a cap on its population estimate – say at 70 million. This would seal Polish-German reconciliation inside the European Union (and help take some of the sting out of the enlargement debate and the eventual accession of Turkey). After all, it took many years for France to feel comfortable with the notion that Germany would gain a greater voting weight than itself in the Council of Ministers.
Angela Merkel is on the right track in trying to forge an agreement at the Brussels summit. Her leadership has been impressive thus far. But she should not underestimate the dogged determination of Poland’s leaders or make the mistake of thinking that they will fold under enough pressure. They will not.
By Paweł Świeboda, director of DemosEuropa, Warsaw
Friday, June 15, 2007
Turkey before the election
by Katinka Barysch
I have recently come back from Turkey, where the mood is a mixture of relief, hope and anxiety: relief that the army has remained in the barracks; hope that the early election in July will result in a workable compromise between the AKP and the secularists; and anxiety that the crisis that started in April has done lasting damage to Turkish society and its political system.
As far as elections go, the parliamentary poll on July 22nd will be fairly momentous. Even seasoned political observers cannot predict the outcome. There have been no reliable opinion polls since the Erdogan government was forced to abort the presidential election and call an early parliamentary one. Moreover, Turkey’s electorate is fickle at the best of times, and recent dramatic events may have swung millions of voters. Finally, the smaller parties are merging, or trying to do so, to increase their chances of overcoming Turkey’s 10 per cent threshold for parliamentary representation.
Few people doubt that the AKP will once again be the strongest force. Its share of the vote could even slightly exceed the 34 per cent it received in 2001. However, its ultimate political strength will depend on how many parties manage to overcome the 10 per cent threshold. Only two did so at the last election (the AKP and the centre-left Republican People's Party, or CHP), while 45 per cent of votes were ‘wasted’ on parties that did not enter parliament.
The CHP has performed badly in opposition, and its leader, Deniz Baykal, has few friends. But the party will benefit from people’s determination not to waste their votes again and from its recent merger with the other centre-left party (Democratic Left Party, DSP). The centre-right parties – Motherland (Anap) and the True Path Party (DYP) – also tried to merge, unsuccessfully. Even if they get their act together before July, the unedifying spectacle of squabbling party leaders will have put off their supporters. Instead, there could be up to a dozen MPs from the Kurdish South-East in the new parliament. Although their party (the Democratic Society Party, or DTP) will not get 10 per cent of the vote nation-wide, its candidates stand a good chance as independents. Another wild card is the ultra-nationalist MHP (Nationalist Action Party) which may gain from blaming any future terrorist attacks on the AKP. If, as seems likely, the Erdogan government does not give the Turkish army the mandate it wants to move against PKK guerrillas in northern Iraq, the MHP will portray the government as weak on security issues.
If the CHP plus more than one other party get into parliament, the AKP would fall short of an absolute majority. Speculation about possible coalitions is already rife. A government led by the AKP and including a centre-right party would probably be good news for economic reforms and EU accession. But mutual distrust and disagreements over the issue of secularism would leave it fragile. An alternative scenario is a left-right (and maybe nationalist) coalition designed to keep the AKP out of power. Many Turks already fear a return to the bad old days of policy paralysis and political infighting.
That would be very bad news. Turkey needs a strong and focused government, to navigate through possible tensions with the EU, to deal with the PKK terrorism threat and to consolidate and build on the impressive economic achievements of recent years.
The first test for the new parliament will be the presidential election. Erdogan’s government wants to shift this election from the parliament to the people. But the required law is now stuck in the constitutional court and will eventually go to a referendum. Meanwhile, following constitutional court ruling in May, the first round of the presidential ballot in parliament now requires a two-thirds quorum to be valid. That means that any party in parliament (or a coalition of parties) can hold the government to ransom. Under these circumstances, Abdullah Gul’s presidential bid looks doomed.
The AKP may face the choice between putting forward a candidate who looks more acceptable to the secularists, or risk yet another round of elections. Or worse. The army has not withdrawn its threat of intervention in case the AKP insists on Gul as their presidential candidate.
Some people say that the current stand-off has done too much damage to Turkey already. It has revealed how deep the divisions still run in Turkish society. The Kemalists accuse the AKP of using the education system, the courts and local administration for a ‘slow motion’ Islamist coup. AKP supporters, in turn, accuse the army of doing much the same.
The fact that there is no trust in Turkish politics makes checks and balances all the more important. It seems that this – not Gul’s personality or faith – was the reason why so many people were upset about his presidential candidacy. The president has traditionally been a counter-weight to the government, so was the army. Neither seeks to run the country but both have intervened at times – be it through vetoing laws or rattling sabres – when they thought that the government was crossing a ‘red line’. Erdogan’s single-party government – so much stronger and more effective than most of its predecessors – did not look like a threat as long as the president and the army retained their independence. The nomination of Gul as presidential candidate raised the spectre of an unusually strong prime minister and a popular president both coming from the same political camp. And since the president is also (nominally) the head of the army and (practically) signs off on senior army appointments (as well as those in the judiciary and education), the army itself feared that it could be ‘infiltrated’ by Islamists.
The army argues that it is needed in politics as long as Turkey’s institutions are weak. But democratic institutions cannot prove their resilience as long as the army sees itself as the ultimate arbiter in Turkish politics. The generals probably took May’s mass demonstrations in Istanbul, Ankara and Izmir (according to some counts, 10 per cent of the electorate marched in the streets) as a sign of approval and support. They are probably wrong. It may just be a sign that Turkish democracy is vibrant, and Turkish voters are willing and able to defend their preferred way of life. Most Turks want neither an Islamist government nor a military one. Democratisation, EU negotiations, reforms and economic growth mean that the Turkish people have a lot to lose if things go wrong now.
Katinka Barysch is chief economist at the Centre for European Reform.
I have recently come back from Turkey, where the mood is a mixture of relief, hope and anxiety: relief that the army has remained in the barracks; hope that the early election in July will result in a workable compromise between the AKP and the secularists; and anxiety that the crisis that started in April has done lasting damage to Turkish society and its political system.
As far as elections go, the parliamentary poll on July 22nd will be fairly momentous. Even seasoned political observers cannot predict the outcome. There have been no reliable opinion polls since the Erdogan government was forced to abort the presidential election and call an early parliamentary one. Moreover, Turkey’s electorate is fickle at the best of times, and recent dramatic events may have swung millions of voters. Finally, the smaller parties are merging, or trying to do so, to increase their chances of overcoming Turkey’s 10 per cent threshold for parliamentary representation.
Few people doubt that the AKP will once again be the strongest force. Its share of the vote could even slightly exceed the 34 per cent it received in 2001. However, its ultimate political strength will depend on how many parties manage to overcome the 10 per cent threshold. Only two did so at the last election (the AKP and the centre-left Republican People's Party, or CHP), while 45 per cent of votes were ‘wasted’ on parties that did not enter parliament.
The CHP has performed badly in opposition, and its leader, Deniz Baykal, has few friends. But the party will benefit from people’s determination not to waste their votes again and from its recent merger with the other centre-left party (Democratic Left Party, DSP). The centre-right parties – Motherland (Anap) and the True Path Party (DYP) – also tried to merge, unsuccessfully. Even if they get their act together before July, the unedifying spectacle of squabbling party leaders will have put off their supporters. Instead, there could be up to a dozen MPs from the Kurdish South-East in the new parliament. Although their party (the Democratic Society Party, or DTP) will not get 10 per cent of the vote nation-wide, its candidates stand a good chance as independents. Another wild card is the ultra-nationalist MHP (Nationalist Action Party) which may gain from blaming any future terrorist attacks on the AKP. If, as seems likely, the Erdogan government does not give the Turkish army the mandate it wants to move against PKK guerrillas in northern Iraq, the MHP will portray the government as weak on security issues.
If the CHP plus more than one other party get into parliament, the AKP would fall short of an absolute majority. Speculation about possible coalitions is already rife. A government led by the AKP and including a centre-right party would probably be good news for economic reforms and EU accession. But mutual distrust and disagreements over the issue of secularism would leave it fragile. An alternative scenario is a left-right (and maybe nationalist) coalition designed to keep the AKP out of power. Many Turks already fear a return to the bad old days of policy paralysis and political infighting.
That would be very bad news. Turkey needs a strong and focused government, to navigate through possible tensions with the EU, to deal with the PKK terrorism threat and to consolidate and build on the impressive economic achievements of recent years.
The first test for the new parliament will be the presidential election. Erdogan’s government wants to shift this election from the parliament to the people. But the required law is now stuck in the constitutional court and will eventually go to a referendum. Meanwhile, following constitutional court ruling in May, the first round of the presidential ballot in parliament now requires a two-thirds quorum to be valid. That means that any party in parliament (or a coalition of parties) can hold the government to ransom. Under these circumstances, Abdullah Gul’s presidential bid looks doomed.
The AKP may face the choice between putting forward a candidate who looks more acceptable to the secularists, or risk yet another round of elections. Or worse. The army has not withdrawn its threat of intervention in case the AKP insists on Gul as their presidential candidate.
Some people say that the current stand-off has done too much damage to Turkey already. It has revealed how deep the divisions still run in Turkish society. The Kemalists accuse the AKP of using the education system, the courts and local administration for a ‘slow motion’ Islamist coup. AKP supporters, in turn, accuse the army of doing much the same.
The fact that there is no trust in Turkish politics makes checks and balances all the more important. It seems that this – not Gul’s personality or faith – was the reason why so many people were upset about his presidential candidacy. The president has traditionally been a counter-weight to the government, so was the army. Neither seeks to run the country but both have intervened at times – be it through vetoing laws or rattling sabres – when they thought that the government was crossing a ‘red line’. Erdogan’s single-party government – so much stronger and more effective than most of its predecessors – did not look like a threat as long as the president and the army retained their independence. The nomination of Gul as presidential candidate raised the spectre of an unusually strong prime minister and a popular president both coming from the same political camp. And since the president is also (nominally) the head of the army and (practically) signs off on senior army appointments (as well as those in the judiciary and education), the army itself feared that it could be ‘infiltrated’ by Islamists.
The army argues that it is needed in politics as long as Turkey’s institutions are weak. But democratic institutions cannot prove their resilience as long as the army sees itself as the ultimate arbiter in Turkish politics. The generals probably took May’s mass demonstrations in Istanbul, Ankara and Izmir (according to some counts, 10 per cent of the electorate marched in the streets) as a sign of approval and support. They are probably wrong. It may just be a sign that Turkish democracy is vibrant, and Turkish voters are willing and able to defend their preferred way of life. Most Turks want neither an Islamist government nor a military one. Democratisation, EU negotiations, reforms and economic growth mean that the Turkish people have a lot to lose if things go wrong now.
Katinka Barysch is chief economist at the Centre for European Reform.
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