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Vol. 8.1 A RETURN TO NORMALITY? The European Council of June 2010

admin — Mon, 13 Sep 2010 11:29:08 +0000

Vol. 7.7. and Vol. 8 The European Council and the euro crisis, Spring 2010

admin — Thu, 17 Jun 2010 10:15:56 +0000

The paper begins with a brief discussion of three fundamental points of reference: the bargain between Germany and its EU partners when EMU was first agreed: design faults and mismanagement of the system since then and the statement issued by the heads of state and government following the euro area summit of 11 February, in which the no-bail-out clause in the Treaty was modified, albeit on terms which excluded immediate intervention to assist Greece.

The second part of the paper analyses developments between 12 February and 10 May. The two key protagonists in a story which was at times extremely dramatic were the German chancellor, Angela Merkel, and the financial markets. The debate within the German government and between the chancellor and her EU partners between February and May was not about whether Greece’s partners could or should intervene on Greece’s behalf, but about how and on what terms they should do so. As far as Angela Merkel was concerned, intervention could only be justified, legally as well as politically, as ultima ratio, in the last resort. The definition of what this meant and when, still more importantly, the last resort had been reached was Chefssache, or more precisely, the chancellor’s business. Mrs Merkel has always been the leading figure in the politics of the European Council. Her dominance between February and May was nevertheless striking even by her standards. Even she could not however control the markets. The interaction between political time and market time is thus at the heart of the story.

The final section of the paper draws some conclusions. Several are positive. The EU has moved a very long way in the past three months. The political and economic costs have nevertheless been considerable. The principal responsibility for the difficulties that have arisen undoubtedly lie with those who designed the system in the 1990s and managed it during the first ten years. The euro area’s current leaders have in other words been obliged to pay for the past. In coping with these problems however, some of them have been stronger than others. Angela Merkel’s primacy has already been remarked upon. The roles played by Nicolas Sarkozy and Jean-Claude Trichet were also significant however. For Herman Van Rompuy, the past three months have exposed important flaws in the new regime, which hopefully he and his colleagues in the Task Force will address. The principal loser at EU level has however been José Manuel Barroso, whose role was marginal throughout and whose authority has been seriously weakened as a result.

The final pages focus on the future and more particularly on the work of the Van Rompuy Task Force, which ought to play the role in designing the post-crisis system that the Delors Committee played in devising the Maastricht Treaty regime.

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TABLE OF CONTENTS

INTRODUCTION	1
1. THREE FUNDAMENTAL POINTS OF REFERENCE	2
1.1 EUROPEAN MONETARY UNION ON GERMAN TERMS	2
1.2 AN IMPERFECT UNION	4
Two non-issues: political union and fiscal union	4
Real design faults	6
Mismanagement	8
1.3 RETHINKING THE SYSTEM: THE STATEMENT OF 11 FEBRUARY 2010	9
2. THE POLITICAL NARRATIVE	10
2.1 11 FEBRUARY TO 25 MARCH: ANGELA MERKEL SETS THE PACE	11
2.1.1 The Greek government’s handling of the crisis	11
2.1.2 Germany in the dock: export rich and vision deficient?	12
2.1.3 Germany and the politics of the ultima ratio or the last resort	13
2.2 THE STATEMENT BY THE EURO AREA’S HEADS OF STATE AND GOVERNMENT OF 25 MARCH	17
2.2.1 Angela Merkel lays down her terms	17
2.2.2 The statement	18
The IMF	19
Ultima ratio	20
Not a subsidy	20
Preventing future crises	20
The French trophies	21
Government or governance	22
The points that were not discussed	22
2.3 26 MARCH TO 24 APRIL: THE MARKETS TAKE OVER	23
2.4 24 APRIL TO 7 MAY: RESCUING GREECE AND COMBATING CONTAGION	26
2.5 THE EUROGROUP SUMMIT OF 7 MAY 2010 AND ITS SEQUEL	28
2.5.1 Preliminaries	28
2.5.2 The working dinner	30
2.5.3 The extraordinary ECOFIN on 9-10 May	35
Support for Greece	35
Fiscal consolidation	35
The creation of a European stabilisation mechanism	36
2.5.4 The European Central Bank breaks new ground	37
3. AN INTERIM ASSESSMENT	38
3.1 COSTS AND BENEFITS	39
3.1.1 Five plus factors	39
3.1.2 Four negatives	41
3.2 EXPLAINING THE CRISIS	42
3.2.1 Paying for the past	42
3.2.2 Imbalances and slow growth	43
3.2.3 The role of the markets	45
3.2.4 Angela Merkel and the politics of the ultima ratio	47
3.2.5 Leadership and non-leadership elsewhere in the EU	50
3.3 LOOKING TO THE FUTURE: THE EU’S ‘EXISTENTIAL TEST’	55
3.3.1 A permanent crisis management structure linked with the European Council	56
3.3.2 The Van Rompuy Task Force as a new Delors Committee	57
ENDNOTES	59

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Vol. 7.6. VAN ROMPUY SAVES THE DAY – The European Council of 11 February 2010

admin — Wed, 03 Mar 2010 09:53:54 +0000

Herman Van Rompuy’s first European Council as President turned out to be Van Rompuy’s Council. This was in some respects rather surprising, because the Greek crisis hijacked the meeting and reduced the time available for discussion of the Council’s original agenda to little more than two hours. It was precisely the crisis that made both the meeting and the man however. When Angela Merkel rejected the eurogroup finance ministers’ draft declaration barely fifteen hours before the Council was due to begin, Van Rompuy was faced with the prospect of a disaster, both in the Council chamber and on the markets. He therefore mounted a well camouflaged rescue operation. The schedule was altered- ostensibly because of snow in Brussels- and he and his team set about producing a finely crafted statement, which satisfied Mrs Merkel’s political and constitutional reservations, but at the same time offered the Greek prime minister a glimmer of hope. The statement- which Merkel, Papandreou and Sarkozy accepted without amendment on the following morning- was much more than a mere stop-gap solution however, since It redefined the terms of the debate about what could or could not be done and added fresh momentum to the European Council’s increasingly intense discussion about economic government in Europe. Above all, it demonstrated that Van Rompuy was in charge. In a remarkable display of leadership which was totally devoid of charisma, he listened before he acted and led because he had listened. It was not a bad start for somebody who in his own words is ‘still learning’.

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TABLE OF CONTENTS

INTRODUCTION	1
1. THE GREEK CRISIS	1
1.1 AN ACCIDENT WAITING TO HAPPEN	2
1.2 THE CRISIS INTENSIFIES: NOVEMBER 2009 TO THE END OF JANUARY 2010	2
The break-up of the euro area?	3
EU options in the event of a Greek default	4
The IMF option	5
A question of leadership	6
1.3 FIRST STEPS TOWARDS A STRATEGIC RESPONSE	7
1.4 VAN ROMPUY TO THE RESCUE: THE MAKING OF THE 11 FEBRUARY STATEMENT	9
1.5 THE STATEMENT OF 11 FEBRUARY 2010	10
2. TOWARDS AN ECONOMIC GOVERNMENT OF EUROPE?	13
2.1 VAN ROMPUY’S SEVEN STEPS	13
Concentration on a limited number of key quantitative EU targets supported by national targets	14
Identification of bottlenecks or barriers to growth at EU and national levels	14
Strengthened EU and national programmes	14
Better monitoring and surveillance	14
Taking into account the euro dimension	14
The international dimension	15
The role of the European Council	15
2.2 VAN ROMPUY IS GIVEN THE GREEN LIGHT	16
3. SOME CONCLUSIONS	17
ENDNOTES	19
ANNEX	21
EXECUTIVE SUMMARY	23

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Vol. 7.5. BRUSSELS AND COPENHAGEN The European Council and the new global disorder

admin — Tue, 16 Feb 2010 12:57:06 +0000

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TABLE OF CONTENTS

1. INSTITUTIONAL ISSUES (PARAGRAPHS 1-5)	2
1.1 A EUROPEAN COUNCIL WITHOUT FOREIGN MINISTERS	2
1.2 HERMAN VAN ROMPUY	2
1.3 CATHERINE ASHTON	5
1.4 UWE CORSEPIUS	8
2. THE ECONOMIC, FINANCIAL AND EMPLOYMENT SITUATION (PARAGRAPHS 6-24)	9
3. THE COPENHAGEN CONFERENCE ON CLIMATE CHANGE (PARAGRAPHS 34-38)	14
4. OTHER BUSINESS: THE STOCKHOLM PROGRAMME, ENLARGEMENT AND EXTERNAL RELATIONS	18
4.1 THE STOCKHOLM PROGRAMME (PARAGRAPHS 25-33)	18
4.2 ENLARGEMENT (PARAGRAPH 39)	18
4.3 EXTERNAL RELATIONS (PARAGRAPHS 40-44)	19
5. THE END OF A PRESIDENCY	19
ENDNOTES	21
EXECUTIVE SUMMARY	22

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Vol. 7.3. and Vol. 7.4. The European Councils of September to November 2009

admin — Fri, 11 Dec 2009 17:09:14 +0000

TABLE OF CONTENTS

INTRODUCTION	1
1. 17 SEPTEMBER: PITTSBURGH, BARROSO’S RE-ELECTION, THE LISBON TREATY AND CLIMATE CHANGE	2
1.1 THE PITTSBURGH G20 SUMMIT	2
1.2 THE RE-ELECTION OF JOSÉ MANUEL BARROSO AS PRESIDENT OF THE COMMISSION	4
1.3 THE CZECH REPUBLIC AND THE RATIFICATION OF THE LISBON TREATY	5
1.4 CLIMATE CHANGE AND THE COPENHAGEN SUMMIT	6
2. A GERMAN INTERMEZZO: THE RE-ELECTION OF ANGELA MERKEL AS CHANCELLOR	7
3. THE OCTOBER EUROPEAN COUNCIL: LISBON AND CLIMATE CHANGE	10
3.1. INSTITUTIONAL QUESTIONS (PARAGRAPHS 1-3)	10
3.1.1 The Czech problem	10
3.1.2 The implementation of the Treaty	13
3.2 CLIMATE CHANGE (PARAGRAPHS 4-25)	15
3.2.1 The EU at the forefront of efforts to combat climate change	16
3.2.2 Financing the fight against climate change	17
Burden sharing	18
The costs of the climate change package and the EU’s willingness to pay	19
Russia, Ukraine and the new member states	20
3.3 ECONOMIC, FINANCIAL AND EMPLOYMENT SITUATION (PARAGRAPHS 26-34)	21
3.4 OTHER BUSINESS: THE BALTIC, IMMIGRATION & ASYLUM & EXTERNAL RELATIONS (PARAGRAPHS 35-43)	22
3.4.1 EU Strategy for the Baltic Region	22
3.4.2 Immigration and asylum	23
3.4.3 Afghanistan and Pakistan	23
4. 19 NOVEMBER: CHOOSING THE EU’S NEW LEADERS	25
4.1 SPECULATION APLENTY AND THE IMPLAUSIBLE TALE OF TONY BLAIR	25
4.2 DEVELOPMENTS IN THE MARGINS OF THE OCTOBER EUROPEAN COUNCIL	26
4.3 GORDON BROWN, THE UNWILLING KINGMAKER	27
4.4 THE EUROPEAN COUNCIL OF 19 NOVEMBER: A MAN, A WOMAN AND THE MISSING THIRD MAN	30
4.5 HERMAN VAN ROMPUY AND CATHERINE ASHTON	31
5. SOME CONCLUSIONS	36
5.1 THE EROSION OF THE AUTHORITY OF THE CONCLUSIONS	36
5.2 THE IMPACT OF GLOBAL GOVERNANCE ON EUROPEAN SOLIDARITY AND COHESION	37
5.3 CO-OPTING THE BIG THREE	39
5.4 THE BRITISH CHALLENGE	39
5.5 THE MEDIA	40
ANNEXE 1	43
ANNEXE 2	50
ANNEXE 3	50
ENDNOTES	52
EXECUTIVE SUMMARY	55

Vol. 7.2. THE EUROPEAN COUNCIL OF JUNE 2009

admin — Mon, 12 Oct 2009 11:25:55 +0000

TABLE OF CONTENTS

EXECUTIVE SUMMARY	1
INTRODUCTION	5
1. INSTITUTIONAL ISSUES (PARAGRAPHS 1-10 AND ANNEXES 1-4)	5
1.1 IRELAND AND THE TREATY OF LISBON: THE PROCESS	6
1.2 IRELAND AND THE TREATY OF LISBON: CONTENT, FORM AND TIMING	6
A matter of substance: security and defence policy	7
Ireland’s need for a Protocol: a question of form	8
The timing	10
1.3 IS THE TREATY OF LISBON NOW SAFE?	11
1.4 NOMINATION OF THE PRESIDENT OF THE COMMISSION	11
2. ECONOMIC, FINANCIAL AND SOCIAL SITUATION (PARAGRAPHS 11-27)	13
2.1 THE EU AND THE ECONOMIC CRISIS: VARIATIONS ON A WELL-ESTABLISHED THEME	6
General strategy	14
Latvia	15
Milk quotas	16
2.2 THE FINANCIAL MARKETS	16
Restoring the stability and functioning of the financial markets	16
Financial market reform	17
The international dimension	22
2.3 EMPLOYMENT AND UNEMPLOYMENT	23
3. CLIMATE CHANGE AND SUSTAINABLE DEVELOPMENT (PARAGRAPHS 28-35)	24
4. ILLEGAL IMMIGRATION (PARAGRAPHS 36-39)	25
5. EXTERNAL RELATIONS (PARAGRAPHS 40-43 PLUS ANNEXES 5-8)	25
6. SOME CONCLUSIONS	25
ENDNOTES	31

Vol. 7.1. The Spring Council of March 2009

caroleludlow — Tue, 07 Jul 2009 15:59:56 +0000

TABLE OF CONTENTS

EXECUTIVE SUMMARY	1
INTRODUCTION	4
1. THE EUROPEAN PARLIAMENT AND THE ELECTION OF THE COMMISSION PRESIDENT	5
2. THE LISBON TREATY (PARAGRAPHS 34 AND 35)	8
3. THE ECONOMIC, FINANCIAL AND SOCIAL SITUATION (PARAGRAPHS 1-23 PLUS ANNEX I)	8
3.1 RESTATING A CONSENSUS	8
The financial markets	8
To stimulate or not to stimulate	9
The single market	10
Solidarity within and beyond the euro area	11
3.2 THE COMMISSION’S €5 BILLION CONTRIBUTION TO EUROPEAN RECOVERY	12
3.3 THE LISBON STRATEGY	15
3.4 THE SOCIAL IMPACT OF THE CRISIS AND THE EMPLOYMENT SUMMIT IN PRAGUE	16
3.5 PREPARING FOR THE G20 SUMMIT	17
4. ENERGY AND CLIMATE CHANGE (PARAGRAPHS 24-28)	19
4.1 ENERGY SECURITY (PARAGRAPH 24)	20
4.2 PREPARING THE COPENHAGEN CONFERENCE ON CLIMATE CHANGE (PARAGRAPHS 25-28)	21
5. EUROPEAN NEIGHBOURHOOD POLICY (PARAGRAPHS 29-32)	24
6. THE EU AND PRESIDENT OBAMA (PARAGRAPH 33)	27
7. BEYOND THE SPRING COUNCIL: CONCLUSIONS AND CONSEQUENCES	28
ENDNOTES	32

Vol. 6.2. IRELAND, FOOD AND OIL – The European Council of June 2008

admin — Wed, 03 Jun 2009 18:34:41 +0000

TABLE OF CONTENTS

EXECUTIVE SUMMARY	1
IRELAND, FOOD AND OIL	6
1. THE LISBON TREATY AFTER THE IRISH REFERENDUM (PARAGRAPHS 1-5)	6
1.1 MR PÖTTERING IS INVITED TO DINNER BY MISTAKE	7
1.2 THE MAKING OF THE CONCLUSIONS ON THE TREATY OF LISBON	8
1.3 THE CONCLUSIONS REGARDING THE LISBON TREATY (PARAGRAPHS 1-5)	11
1.3.1 Interrupted business: the implementation of the Lisbon Treaty	11
1.3.2 Why the Irish voted ‘No’	14
1.3.3 The Irish government is given ‘more time’	15
1.3.4 The ratification process goes on	15
1.3.5 A rendezvous in October	16
1.4 THE PROSPECTS FOR THE LISBON TREATY FOLLOWING THE EUROPEAN COUNCIL	16
1.5 RECASTING THE TERMS OF DEBATE ABOUT THE EU	18
2. FOOD AND OIL (PARAGRAPHS 25-40)	22
2.1 THE PROBLEM	22
2.2 THE EUROPEAN COUNCIL AS A LIGHTNING CONDUCTOR: THE PRELIMINARIES	24
2.3 THE HEADS OF STATE AND GOVERNMENT HAVE THEIR SAY	26
2.4 TWEAKING THE CONCLUSIONS	28
2.4.1 Short-term measures to mitigate the impact of the rise of food prices (paragraph 29)	28
2.4.2 Support to agriculture in developing countries (paragraph 32)	28
2.4.3 The social and economic consequences of the surge in oil and gas prices (paragraph 37)	29
2.4.4 Climate change, energy efficiency, energy savings and the diversification of the EU’s energy supply (paragraphs 38 and 39)	30
3. OTHER BUSINESS	30
3.1 SLOVAKIA AND THE EURO	30
3.2 THE CONCLUSIONS OF THE EUROPEAN COUNCIL	30
3.2.1 Freedom, security and justice (paragraphs 6-24)	31
3.2.2 Economic, social, health and environmental issues (paragraphs 41-51)	31
3.2.3 Western Balkans (paragraphs 52-56)	31
3.2.4 External Relations (paragraphs 57-78)	33
4. THE POLITICS OF THE COUNCIL OR A TALE OF THREE PRESIDENCIES	34
4.1 DIFFICULT TIMES FOR THE COMMISSION PRESIDENT	35
4.2 REQUIEM FOR THE SLOVENIAN PRESIDENCY	36
4.3 THE ‘INCOMING PRESIDENCY’ SEEKS THE LIMELIGHT	38
ENDNOTES	40

Vol. 6.1. THE 2008 SPRING COUNCIL – Not so boring after all

admin — Wed, 03 Jun 2009 18:33:02 +0000

TABLE OF CONTENTS

EXECUTIVE SUMMARY	1
1. A SENSE OF PERSPECTIVE	4
2. THE MAKING OF THE CONCLUSIONS	6
2.1 THE LISBON STRATEGY	6
2.2 ENERGY AND CLIMATE CHANGE	8
2.3 THE STABILITY OF THE FINANCIAL MARKETS	9
3. THE EUROPEAN COUNCIL OF 13 AND 14 MARCH: THE PRELIMINARIES (PARAGRAPHS 1-3)	9
3.1 HANS-GERT PÖTTERING	9
3.2 THE STATE OF THE EUROPEAN ECONOMY	10
4. THE LISBON STRATEGY FOR GROWTH AND JOBS (PARAGRAPHS 4-16)	10
5. ENERGY AND CLIMATE CHANGE (PARAGRAPHS 17-30)	12
5.1 DEFINING CONSENSUS (PARAGRAPHS 17 AND 18)	12
5.2 ENERGY INTENSIVE INDUSTRIES AND INTERNATIONAL COMPETITION (PARAGRAPH 19)	13
5.3 THE ETS BIS AND OTHER MATTERS (PARAGRAPHS 20-23)	17
5.4 THE INTERNAL MARKET IN GAS AND ELECTRICITY: SHAPING UP FOR A DEAL IN JUNE? (PARAGRAPH 24)	17
5.5 ENERGY SECURITY (PARAGRAPH 25)	19
5.6 THE IMPACT OF CLIMATE CHANGE ON OTHER EU POLICIES (PARAGRAPHS 26-29)	21
Climate change and international security	21
Coherent policies including the use of economic and fiscal incentives in the interests of a low carbon economy	21
Research, development and changing citizens’ behaviour	22
6. THE STABILITY OF THE FINANCIAL MARKETS (PARAGRAPHS 30-36)	22
7. A MEDITERRANEAN UNION OR BARCELONA BIS? (ANNEX I)	23
8. A VOICE FROM THE EAST	25
9. THE POLITICS OF THE SPRING COUNCIL	25
ENDNOTES	29
INTRODUCING EUROCOMMENT’S Briefing Notes	31

Vol. 6.3. The EU and the Georgian crisis: the making of the French Presidency

admin — Mon, 01 Jun 2009 05:04:30 +0000

TABLE OF CONTENTS

EXECUTIVE SUMMARY	1
INTRODUCTION	3
1. THE EU AND THE GEORGIAN CRISIS	3
THE BACKGROUND	3
THE EXTRAORDINARY EUROPEAN COUNCIL OF 1 SEPTEMBER 2008	6
THE SIGNIFICANCE OF THE EXTRAORDINARY EUROPEAN COUNCIL	11
THE SEQUEL UNTIL 10 SEPTEMBER	13
The withdrawal of Russian and Georgian forces	14
International observers	14
International talks on the security and stability arrangements in Abkhazia and South Ossetia	15
TAKING STOCK: THE EU AND THE GEORGIAN CRISIS ONE MONTH ON	15
A job well done	16
The loose ends in the agreements of 12 August and 8 September	17
The scope and composition of the international conference	17
The implications of the European Council’s pledge to ‘step up its relations’ with Georgia and the EU’s other eastern neighbours	17
Relations between the EU and NATO and the future of NATO itself	17
EU-Russian relations	18
2. THE GEORGIAN CRISIS AND THE MAKING OF THE FRENCH PRESIDENCY	19
3. THE EU AS A GLOBAL PLAYER: THE ROLE OF THE PRESIDENCY AND THE FUTURE OF THE LISBON TREATY	21
ENDNOTES	22