A rift in Europe

Published : Jan 16, 2004 00:00 IST

E.U. Commission President Romano Prodi looks at the draft of the Constitution during a press conference in Brussels. - DOMENICO STINELLIS/AP

E.U. Commission President Romano Prodi looks at the draft of the Constitution during a press conference in Brussels. - DOMENICO STINELLIS/AP

The European Union finds itself divided into two groups - the big and small nations - after the Brussels summit failed to adopt the draft Constitution.

MOVES to adopt a Constitution for the European Union (E.U.) suffered a major setback when member-states failed to agree on the sensitive issue of individual voting rights. At a summit in Brussels, Belgium, some nations refused to surrender the disproportionate powers acquired under a treaty signed in Nice (France) in 2000. The Nice Treaty gave Spain and Poland, which have a combined population of 40 million, 27 votes each. Instead Germany, the E.U.'s largest member with a population of 82 million, and France, Italy and the United Kingdom have 29 votes each. A draft Constitution proposes to correct the situation by a system based on a simple majority, whereby a vote would be passed if it has the support of 50 per cent of the countries, representing at least 60 per cent ("double majority") of Europe's 450-million population.

Thus what was to have been a decisive move towards European integration was halted by deep-rooted attitudes, where national interests prevailed over the spirit of united Europe. Events in the past year have thrown up deep divisions within the Union. Faced with intractable positions, European leaders attended the two-day summit in December without much hope of reaching an agreement. German Chancellor Gerhard Schroeder felt on arriving that "the summit could fail". At the end of the first day of talks, Italian Prime Minister Silvio Berlusconi declared dramatically: "We will not accept an accord that does not allow Europe to function, but to reach an agreement at this point would be a miracle." That miracle eluded Italy's six-month tenure of the rotating presidency, which ended in December. Ireland assumes the presidency from January 2004.

Recriminations followed for the summit's failure to win an approval on the draft Constitution. Berlusconi, as the President of the Council for Europe, was an obvious target of blame for not having exerted enough pressure to prepare the ground during Italy's presidency. The work now passes on to Ireland, which has been entrusted to hold fresh consultations to evaluate the "progress possible" up to the next meeting of the Council in March.

The draft Constitution, an 18-month effort by a convention of 108 delegates led by former French President Giscard D'Estaing, had been presented to an inter-governmental conference and was being scrutinised for the past six months. The members are drawn from representatives of governments, Parliaments and the E.U.'s executive, the European Commission. All 25 governments must agree on the text before the treaty can be put into effect. A welter of national egos, rivalries between big and small nations and between old and new member-states, all clashed in the backdrop of competing national interests. It is also not surprising that the nationalist vetoes in this case originated from Spain and Poland, which emerged recently out of prolonged authoritarian rule.

Germany and France contend that the voting strength should correspond to the population of each country. Smaller countries are wary of permitting the exercise of dominance by larger nations. Spain and Poland, which extracted favourable terms through the Nice Treaty, refused to accept the changes proposed by the draft Constitution.

The European project now finds itself divided into two camps - between those who want to maintain veto rights and others who wish to see Europe move as one unit, so as to be counted as an entity in a world shaped by globalisation. In fact, the Constitution is designed to prepare the E.U. to respond to the rapid changes and to adapt the E.U. institutions to its largest expansion. Ten new member-states will be admitted on May 1, 2004, raising the total number of members to 25. Most of the new members have been part of the former Soviet bloc in east Europe. The way things are shaping, the E.U. risks starting work as a larger, more complex entity without adequate institutional framework.

There is no deadline for adopting the Constitution. The E.U. can continue working with the existing rules, albeit in cumbersome ways that its institutions have sought to streamline in the recent past. The Nice Treaty was a part of the preparations for enlargement, but its complicated allocation of voting rights has failed to resolve the imbalances. The terms of Nice would remain in operation for some time, although they are quite likely to cause delays in decision-making. Even if the inter-governmental conference sticks to the timetable of agreeing on a final text for the Constitution, it would not come into effect in the near future.

The functioning of the E.U. is regulated by a number of earlier treaties. The Constitution will replace these with a single document.

Another matter of discord has been the number of commissioners each country should have in the European Commission. The draft Constitution proposes 10 voting commissioners in all, and the posts to be held by turns by the 25 member-countries. Many of the smaller countries, however, have insisted on the `one commissioner a country' principle for the European Commission even after the expansion in 2004.

The disputes extend to other areas, including the powers of a new E.U. President. The draft Constitution proposes that the President of the Council be elected by the heads of state or government for "a term of two-and-a-half years, renewable once". The idea is to end the current system by which the presidency rotates through the member-states every six months. Designed to provide a central figure who could become the focus for the E.U. over a longer period, the proposal is favoured by bigger countries such as France, Germany and the U.K. But smaller countries like Belgium, Spain, Holland and Finland, are reluctant to give up their turn at the post. They also have reservations that an elected, more powerful President may erode the powers of the European Commission, which they consider a guarantor of their interests.

The only real success of the Brussels summit was the Council's approval of the project of defence cooperation, which would lead to the beginning of a European defence capability, enabling the E.U. to take on operations independently of the North Atlantic Treaty Organisation (NATO). The project involves Britain, France and Germany. The attempts to forge a capability independent of NATO, however, carries sensitive overtones for the trans-Atlantic relationship. The Council for Europe continues to emphasise that NATO remains the foundation of European security.

The E.U.'s relations with the United States came under considerable stress in the wake of the Iraq crisis. With France and Germany opposing the U.S.' war on Iraq, the fissures in Europe stood exposed. Britain, Spain and Italy backed the U.S. position. Many new members inducted from east Europe signed a declaration in support of the U.S. action, provoking a public rebuke from French President Jacques Chirac that their admission to the E.U. could be held up over this.

For a number of analysts, the fractures caused by the Gulf War have served to highlight the changing Europe - U.S. relationship. Europe, long the beneficiary of Pax Americana underpinned by U.S. military power, is now coming of age. Rivalry and competition are new elements in the relationship, which have already been in evidence since the Kosovo crisis at the end of the 1990s. Now that the euro, in a short span of three years, is holding its own against the U.S. dollar makes it a potential challenge to the pre-eminence of the American currency in world trade. American neo-conservatives had drawn attention to this European potential already in 2000. In a volume of essays by mostly neo-conservative scholars (Present Dangers, eds. Robert Kagan and William Kristol, Encounter Books, San Francisco, 2000), it is argued that the U.S. should regard Europe as among its "present dangers". The perception is based on the fact that European integration has proceeded in an autonomous way, without American involvement. The euro, according to analysts, represents irrefutable evidence of the European will to compete with the U.S., as also its own specific response to the globalisation process.

The failure to adopt the Constitution now is leading naturally to a search for ways out of the impasse. One alternative, as demonstrated by the decision on defence capability, is to push ahead on integration in the form of a core "vanguard" group of countries within the E.U. This has already given rise to the idea of a "two-speed Europe". France and Germany have shown the way in the past 18 months in trying to structure an independent foreign and defence policy. Schroeder remarked: "If the current E.U. member-states do not manage to reach a consensus, there will emerge a Europe of two speeds." Chirac has exhorted the "pioneer" group of E.U. founding countries to work together for closer European cooperation. The solution of a dual Europe, each governed by separate sets of rules, is, however, not without its potential complications - legal as well as institutional. The threat of a core group of countries going ahead and adopting the Constitution was expressed, but more as a negotiating ploy with Spain and Poland. But the failure of the summit could render this a reality.

Justice and economy are two other fields where member-states have joined in such "enhanced cooperation" in order to take dynamic initiatives. The core group went ahead with the launch of the European Monetary Union, followed by the introduction of the single currency. The Nice summit first allowed the possibility of "closer or enhanced cooperation" in all matters except defence, as a way of getting around the veto option. The rider, however, is that at least one-third of the members (that is, nine states) are essential for any project of closer cooperation.

Meanwhile, the crisis within Europe deepens. Germany, the largest contributor to the E.U. budget, has threatened to cut the flow of E.U. funds to Spain and Poland (which is slated to become a big recipient over the coming years). In fact, another way being considered to solve the impasse over the Constitution is to delay its implementation until 2014, thus allowing France and Spain to influence key decisions on future E.U. budgets under the Nice system.

In recent weeks, another pillar of European economic integration was undermined as France and Germany failed to keep up with the E.U. criterion on budget deficits. Under the Growth and Stability Pact, the 12 countries that use the euro have to keep their annual budget deficit at less than 3 per cent of the gross domestic product (GDP). The agreement was aimed to help limit inflation in the euro zone and buttress the currency on its introduction. Both Germany and France struggled in the meantime as economic growth and tax revenues declined. Germany has rejected calls by the E.U. to reduce its budget deficit. Under a compromise worked out in November, France and Germany escaped the prospect of sanctions for repeated failure to meet the criterion, and would also be exempt from making the deficit reductions agreed upon for the next two years if the growth in the economies is unexpectedly low. Spain, Holland, Finland and Belgium, which adhered to the Growth and Stability Pact, opposed the compromise. As if acknowledging the general state of crisis, the European Central Bank described the deal as "a serious danger". The European Commission expressed strong criticism. Pedro Solbes, the E.U. Commissioner for Economic and Monetary Affairs, declared: "The Commission regrets deeply that these proposals are not following the spirit and the rules of the treaty and the stability and growth pact."

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