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In preparation for the annual “Autumn onslaught” – or perhaps to take your mind off it –Grayling Brussels is pleased to present you with its latest edition of Espresso.
In this week’s publication:
On the run from the BRICs;
A preview of the Cypriot Presidency;
How health policy is affected by the financial crisis; and
An interview with Grayling Consultant Charlotte Ryckman.
You can access Espresso here.
This articles comes fromt he Grayling Brussels Espresso May 2012 edition.
The Commission is proposing that Member States place a minimum tax of between one-tenth and one-hundredth of one
percent on a range of financial trades.
Although these proportions seem tiny, the sheer volume of trades that occur every day means that the Commission anticipates raising up to €57 billion in revenue from the move.
One Member State attempting to cash in on these high stakes is France. A one-time opponent of the tax, then President Sarkozy became its standard bearer, pressing ahead with a light French version of the tax when frustrated with the slow pace of progress in Brussels.
On the other side of the Channel, David Cameron has adopted a more pragmatic approach, insisting the tax is unworkable unless it is applied on a global scale, and expressing fears that the City of London would be hit disproportionately which would send investors packing.
Having already wielded his country’s veto on the fiscal compact, he has demonstrated his willingness to block proposals that he perceives as a threat to the UK’s interest.
With unanimity required for decisions on taxation and deep divisions within the Council, there is little hope of a speedy agreement. Nine Member States have already formally requested to be allowed to press ahead on their own, with the Lisbon Treaty’s Enhanced Cooperation procedure providing a framework for a core group of countries to do so.
The Commission is reluctant to go down this road, however, not least because they would then lose control of the proposal.
This may partly explain the recent push to advocate for the FTT on the basis of the cash savings that the tax would bring about for Member States contributing to the EU budget.
Earlier this month, EU Budget Commissioner Janusz Lewandowski claimed the measure could reduce by over €80 billion the direct contributions from Member States over the course of next 7-year budget cycle.
Although there is little evidence that his arguments have gained much traction in key opposing Member States, if the Commission did manage to bring the naysayers around, it would not only score a major political victory on financial regulation, but also reach the promised land of generating independent “own resources”, of serious significant value, a goal it has held dear for decades.
However, an EU-wide, or even Eurozone-level, agreement seems optimistic. With negotiations on the next financial cycle due to conclude by the end of the year, time is not on the side of Barroso and his band of Commissioners in his attempt to emulate Robin Hood and his Merry Men.
The latest BigPictureBrussels from Grayling looks at the political priorities of the Danish Presidency of the EU and the likely impact Denmark will make during its 6 month term. Denmark takes on the Presidency of the European Union at a time of crisis and uncertainty. Only days after the highly-charged and bad-tempered Summit in Brussels, the Danish Government unveiled its list of priorities for the Presidency. Amid signs of the inter-governmental agreement on fiscal co-ordination and budgetary surveillance unravelling, Denmark is prioritising the Eurozone with the aim of keeping the show on the road. Read More
As the second so-called “new” Member State to take over the EU Presidency after the much-maligned Czechs in the first half of 2009, Hungary was eager to showcase itself and demonstrate its leadership potential.
However, due to circumstances both inside and outside its control, it is hard to assess the Hungarian Presidency as anything other than a slight disappointment.
The big story of the last six months – indeed the last year – has been the Euro crisis, but as a non-Eurozone member Hungary was forced to retreat to the shadows whilst the two Jean-Claudes (Juncker and Trichet) hammered out a series of provisional solutions together with the big-hitters in the Council, President Sarkozy and Chancellor Merkel.
This, in addition to the degrading of the rotating EU Presidency following the entry into force of the Lisbon Treaty, also prevented Hungary from taking leadership on the issue of fiscal governance, which has divided both the EU and the Eurozone.
Yet Hungary also managed to shoot itself on the foot on several occasions, particularly at the beginning of its tenure, insodoing calling to mind their Czech predecessors.
The now infamous “media law”, which is causing concern for the Commission regarding its treatment of the press, the imposition of emergency taxes on foreign companies in Hungary, and an ill-judged carpet placed in the Council building which appeared to reference the idea of a much larger “Greater Hungary”: all emphasised the gap between established core European values and a Hungary that in recent months has been treading on dangerous ground.
But what of the successes?
It is true that Hungary has been key in supporting Croatia’s accession process, which now looks likely to take place on 1 July 2013, and has also successfully pushed through EU strategies on the Danube region and the Roma people – both of which give a distinct Hungarian flavour to this particular EU Presidency.
And yet, in these areas too, Hungary has been found somewhat wanting. Whilst Croatia was indeed a success, particularly given the supposed “enlargement fatigue” plaguing the EU today, the much heralded “Eastern Partnership” Summit has been pushed back for the Poles to organise in September, the Danube Strategy lacks teeth and does not bring any new funding to the table, whilst the Roma Strategy only affects a handful of Member States, as worthy as it may be.
Since the Lisbon Treaty came into force, EU Presidencies have had to focus even more on compromises. However, decision-making in the EU has always been centred on so-called “horse-trading” between various interests, and as ever the devil is in the detail.
This is why, when looking to influence the decision-making process within the Council, it is critical to focus on the Presidency as well as the other 26 Member States.
Building consensus across national boundaries is, after all, what EU decision-making is all about.
Greetings and Happy New Year! (Can we still wish people Happy New Year on 19 January? Oh well, who cares!)
Apologies for the rather long Lobby hiatus. It’s been a very busy few months, culminating in an exciting office move of 100 metres which now sees us sitting above the junction of Avenue des Arts and Rue Belliard.
The Lobby has never seen so many cars whizz by its office window, yet paradoxically the number of crashes appears to have decreased from that of our former base on the Rue du Luxembourg. (Fewer buses, taxis, cyclists – who knows?)
Not only has this first post of 2011 been a rather sly way of informing you about our move, we would also like to champion our rather marvellous Grayling Update on the Hungarian Presidency, written largely by The Lobby and our friends at Grayling Hungary. You can view it in all it’s glory here.
We hope you enjoy reading it and that it gives you some food for thought (Hungary – geddit!) for the coming six months.
Like its Central European neighbour the Czech Republic, the Hungarian Presidency has got off to a rather rough start, with EU Member States criticising its recently adopted media law.
The Lobby’s understanding of both the intricacies of media law and the Hungarian language being somewhat limited (the law has only just been translated), we dare not comment on this – merely recall that the Czechs got off to a bad start a few years ago and never recovered. We hope the Hungarians don’t go the same way.
That’s all – happy reading! And it’s good to be back…
Which will it be?
At the beginning of this month the Belgian State Secretary for European Affairs Olivier Chastel is known to have stated that Belgium will mark a “rupture”, or a break, from current practice following the changes introduced by the Lisbon Treaty that, to an extent, give the EU Presidency a backseat role to President Van Rompuy and Baroness Catherine Ashton.
One does wonder however whether the Belgians are not taking this backseat role too literally.
With the full programme and website for the Presidency only having been unveiled today, less than a week before the Presidency is due to begin, it is perhaps not surprising that a certain anxiety has been felt in the air.
While these delays could be explained in light of Belgium’s recent political troubles, and Belgian leaders have tried to reassure everyone that these will not affect the Presidency, the lack of ambition with which certain key political figures reassure still gives ground for concern.
Talking to Mr Barroso this week, for example, Bart De Wever, the Flemish nationalist who claimed victory in the recent election, said he aims “to have a government in place before October, when the really important work of the Presidency will begin”.
It may well be that the groundbreaking work will occur in the autumn months, and having a government in place is not as crucial for ensuring the smooth running of a Presidency.
However, in just six months it is clear that the Presidency has to deliver at a time when fears of a double-dip recession are in the air, and any lack of ambition for the first three of these months could prove fateful.
We might be faced with this situation sooner than we think: on Thursday Belgian Prime Minister Leterme handed in his resignation to the Belgian King due to his five-party coalition government being about to collapse with the Flemish Liberals and Democrats pulling out over the “BHV” affair with less than three months left before Belgium takes over the reigns of the EU Presidency on the 1st July.
Moral-political question: should they be allowed to run the EU Presidency? I have heard all three answers in the last 24 hours:
- Yes, of course, because with the new institutionalised troika system, Belgium will be supported by Spain and Hungary and/or in any case the country holding the Presidency is simply following the Union’s priorities so their input is minimal. Also, Belgium is known to work particularly well when there is no government in place and, hence, they will probably even do a better job with a “Caretaker government”!
- No, because how can Belgium lead from the front, find compromise solutions, broker deals and demonstrate leadership – fair point!
- Don’t know: is the majority view because most citizens are clueless about what the EU Presidency is, let alone what it is supposed to do – a sad state of affairs.
Then I heard someone comment on the radio – no fear Herman Van Rompuy – a Belgian – will come to the rescue as the President of the European Union!
The reality is that Belgium will most probably muddle through with the support of the Spanish and the Hungarians and with a structure and system which seems to just keep rolling, despite institutional upheavals such as the “NON” to the EU Constitution or the Irish No to the Lisbon Treaty.
But do we simply want to push through and hope that the institutional snowball takes us forward? Clearly not and, hence, this latest possible scenario demonstrates that Europe still has a long way to go and needs to mature…
Blaming it on the Belgians though would be unfair as other Member States like the Czech Republic have been in the hot seat without a Government.
– Russell Patten
Is it Barroso, Ashton, Buzek, Van Rompuy, or Farage – or someone else entirely? We want to know what you think, so vote in our poll by clicking here.
– The Editors
Once upon a time, there was a great leader of the new world who had a vision of creating a bilateral arrangement with the old world, and so he asked his political advisors whom he should speak to in Brussels.
His advisors usually responded to his questions in a flash, but this time around they looked at each other perplexed and informed the great leader that they would have to research the matter in great detail. Having investigated the matter quite thoroughly, the advisors returned and, instead of giving him the answers he sought, suggested that their young European intern from the European Commission would be best placed to explain the complex web of people and procedures…and so the nightmare began.
The young intern turned to the great leader and asked what kind of bilateral arrangement he had in mind? He replied proudly that he wanted to urgently create a new arrangement where the US and Europe would pool their knowledge and resources to eradicate all forms of the flu once and for all, and that both regions would equally donate US$25 billion to the initiative.
The advisors all looked at each other, some raising their eyebrows; others were heard to sigh deeply, whilst others scratched their heads and looked confused, realising that the night would be long.
The young intern turned to the great leader and said:
“You should probably first speak to the President of Europe, sometimes referred to as the Head of the Council of Ministers, because he is the top guy in Europe. This is a new job, so he has only been in power for a few months – a lovely chap called Van Rompuy who is very keen to engage on the world stage, but since he does not have any real powers, I would advise that you contact José Manuel Barroso because he has been around for a long time and is President of the European Commission which is responsible for policy and legislation. But there again, Sir, as you know the Commission is a weakened institution, and I am not sure that they would be able to push your great idea without the support of some important people!”
The great leader interjected and asked how many other important people there were in Brussels that he should consider meeting as he was very busy and needed to speak to the most important leader.
The intern blushed and explained that there was another President, namely that of the European Parliament, the only democratically elected institution representing the interests of European citizens. At this point the great leader said that this was the man! But then the intern began to look agitated.
“Well go on then,” the great leader enquired of the intern, “explain to me if I should not see him, what other President should I consider?”
The intern went on to explain that it was not so much other Presidents as other Prime Ministers, such as Mr Brown and Ms Merkel, although she is a “Chancellor”, and, of course, there was Mr Sarkozy who was actually another President.
The great leader looked him in the eye and said: “But this Mr Sarkozy, is he more or less important that the other Presidents?” Now there was a question…
The intern was by now fully engaged and explained that this President and those Prime Ministers were really very important indeed because they were the leaders of the three most important countries in Europe and that they were actually more important than the President of the Commission, the Parliament, and the so-called Council of Ministers, and that if he really wanted to conclude this agreement he would definitely need their support.
The great leader reflected on what he had just learnt and finally proclaimed that he understood that he had to speak, not to one, but to six Presidents, and that in many ways he thought this very original and democratic, albeit it a little exaggerated. But he was nonetheless willing to give it a go, so he ordered his advisors to set up these meetings and told them he was going to Brussels the next day.
Upon hearing this news, the most senior advisor grew paler by the second and eventually asked the great leader to consider some additional factors. The great leader, pleased with his earlier solution, managed to grunt “What else now!?”
The advisor explained that he would not be able to visit all six at the same time or in the same place. The great leader looked more perplexed than ever and asked exactly how many places he would have to visit in order to meet them all. Having studied the calendar of the EU institutions the intern stated proudly that the great leader would have to first go to Brussels, then Strasbourg because it was Parliament plenary week, and finally to London, Paris and Berlin.
“Anything else, I should be considering?” asked the great leader.
A dead silence reverberated around the room as the advisors gathered their courage to explain that there were indeed a few more people to consider, such as the EU Health Commissioner John Dalli, but that he was on business in Malta next week, and then there was Baroness Ashton, the Commissioner responsible for foreign affairs and security policy who was also Vice-President of the Commission and a great ally of America, and then of course there was the Commissioner for International Cooperation, Humanitarian Aid and Crisis Response who would have to be considered. And why not the head of the WHO in Geneva?
The great leader, known for his composure, sat back, put his head in his hands and was heard mumbling.
“So I have to see six Presidents/Prime Ministers/Chancellors in five locations, three Commissioners, one in Malta and two in Brussels, and some leader in Geneva – so that makes 10 people in seven cities.”
Surveying his advisors he asked: “So if I see all 10 people in 7 cities all will be fine?”
By then he knew the answer and challenged his intern to surprise him. The intern, knowing that he was coming to the end of his work placement, provided a very pragmatic answer.
“They will most likely all agree with you, Sir, but at the same time they all disagree with each other, and reaching an agreement could take literally years as the EU decision-making process is based on full stakeholder participation and consultation and is therefore very time consuming!”
Itching to speak, but not daring to, one of the other advisors finally mustered up all his courage and explained that as far as he knew there was also the Prime Minster of Spain whom the great leader should meet, because his country currently holds the EU Presidency.
“In fact”, the advisor continued, “you should also speak with the Prime Ministers of Belgium and Hungary because they share the Presidency with Spain in this new troika system.”
His fellow advisors were astonished at their colleague who had neglected to mention the role of the national parliaments which have now been given the power to reject EU proposals if they feel the issue could be dealt with better by them.
“How many of these are there?” the great leader asked.
“Oh, only 27 for the moment,” replied his advisors. “But there could be 30 very soon…”
The great leader, who by then was lost in deep thought, very quickly came out of his reverie to claim that he would abandon his initiative with the EU altogether and instead would propose it to the UN, as this would definitely be quicker and would resolve the problem at a global level.
All looked at each other, and for the first time that morning smiles appeared on all their faces. The perfect solution had been found!
“No wonder the EU was not at the final table negotiating the climate change no-deal!” reflected the great leader that evening.