European Foundation Intelligence Digest

Issue No. 179                                                                                               		                          		30th  October 2003

I.  

Turkey begins to have its doubts
The Turkish Foreign Minister, Abdullah Gül, who is also Deputy Prime Minister, has seemed to row back on Turkey’s commitment to send troops into Iraq.  Gül said that Turkey was not in a hurry to send troops, and that even the US had its own reservations about the idea.  The Iraqi Governing Council has unanimously rejected the idea of a presence in Iraq of the army of the country which used to be the colonial power there until the First World War and the creation of the Iraqi state.  Gül added that he thought the Americans had acted clumsily because they had made the request for troops directly to Turkey without consulting the Iraqi Governing Council.  [Salih Boztas, Zaman, Ankara, 29th October 2003]
	In a separate development, the leader of the Christian Democrats in the European Parliament, Hans-Gert Pöttering has said there are no circumstances under which he would favour the admission of Turkey to the EU, not even if it fulfils all the “Copenhagen criteria” on human rights.  He claimed that his opposition was not based on religion but culture.  “A farmer from Anatolia does not have a similar culture or identity with a farmer from London, Paris or Rome.  The question of women, your education system, your openness to other religious beliefs ... these are all problems. There is still need for developments but it is not a religious question.”  [Interview with Zaman, Ankara, 23rd October 2003]

Swiss People’s Party wins landslide
The general election in Switzerland has resulted in huge gains for the Swiss People’s Party (SVP) known for its robust anti-Socialist and Eurosceptic policies.  The SVP polled 27% of the national vote, making it the largest party in the country:  the Socialist Party obtained the next best score at 23%.  For the first time, moreover, the SVP has extended into the French-speaking West of Switzerland:  previously, it had been confined mainly to the German-speaking part.  The elections have seen a corresponding defeat for the centrist, pro-European forces in the Swiss political establishment.  The centrists have been losing popularity since the 1992 referendum on Europe, when a majority of Swiss people voted against closer ties with the EU.  Although the Swiss subsequently voted to negotiate a trade agreement with the EU, they remain fiercely hostile to actually joining it.  Now that the SVP has emerged as the biggest party, it is likely that the so-called “magic formula” which has given the same number of seats in the federal cabinet to the same political parties since the 1950s (what a democracy!) is in danger.  The SVP currently has only one seat, the other main parties two each.  The leader of the SVP, Ueli Maurer, has demanded that the new seat go to Dr Christoph Blocher, the leader of the Zurich party, and the SVP’s most prominent member.

Czechs offer compensation to Germans
The Czech government has begun to bow under the incessant pressure from German expellees.  The Deputy Prime Minister, Petr Mares, has suggested that a small one-off payment of €1,700 might be paid out to Germans and members of other minorities who were used as forced labourers after the war.  Mares says that “a few hundred people” might be compensated in this way.  Although this falls far short of what many German expellees want – they want the whole issue of expropriation and restitution to be opened – the proposal is being understood as a gesture of reconciliation towards the EU, which forbids any discrimination on the basis of nationality.  But even this proposal is opposed by members of the governing Social Democratic Party, as well as by the opposition ODS (Civic Democratic Party) founded by President Václav Klaus.  Communists will also oppose it.  The deputy leader of the ODS, Jan Zahradil (a member of the European Foundation’s International Advisory Board) said that the proposal was “a very risky game”.  He said that it would only open the door to more and more demands for compensation.  
Further ructions have been caused in German-Czech relations by the head of the Association of Victims of the Nazis, Oldrich Stransky.  Stransky had written a friendly letter to the head of the Sudeten Germans’ organisation, the Christian Democrat MEP Bernd Posselt, welcoming the opening of the Sudeten German office in Prague.    Posselt said that Stransky’s dismissal from the organisation was “a targeted operation by nationalist and communist forces to mob the process of reconciliation.”  [Hans-Jörg Schmidt, Die Welt, 25th October 2003]

Germany’s borrowing highest ever
At €43.4 billion the budget deficit which Germany is running this year is the highest in the country’s history.  The deficit was originally supposed to be €18.9 billion.  The largest budget deficit before this was the €40 billion which Theo Waigel borrowed in 1996.  The Brussels Commission, moreover, has predicted that Germany will not benefit fully from the economic upturn which it is predicting for the euro zone in autumn.  It expects euro zone growth this autumn to reach 1.8% but expects Germany to grow at only 1.6%.  The Commission also expects Germany to break the Maastricht criteria for the third year running in 2004, when the deficit is estimated at 3.9%.  For 2003, the Brussels experts expect the deficit to be 4.2% of GDP.  [Die Welt, 29th October 2003]

Raffarin says he can deal with Brussels
The French prime minister has said that he thinks a solution can be found to the argument which has broken out between Paris and Brussels over the size of France’s budget deficit.  He attacked the “heavy procedures” of Brussels but said that he thought an agreement could be reached on the deficit.  “Let’s just say that this ‘Europe of procedures’ is not the one I prefer.”  He said that he thought “a new and profoundly different Europe” would emerge in 2004, by which he meant that the new constitution would be ratified.  He also said that he was pleased to see the Franco-German relationship going through such a good phase.  He said that it was “a motor to which new cylinders can be added” – a reference to the recent inclusion of Tony Blair in the three-way summit in Berlin, at which the new EU military capability was discussed.  [Le Monde, 26th October 2003]

Verheugen says Stability Pact might be reformed
It does indeed seem to be true that the Commission is giving ground on the Stability Pact.  Günter Verheugen, the commissar for enlargement, said that within the Commission “justified discussions” were taking place, “about whether the Pact is sufficiently flexible to be able to react to situations which perhaps could not be foreseen ten years ago”.  According to Verheugen, a re-writing of the Pact cannot be ruled out.  “Perhaps we need a reform of the Pact,” he said, adding for good measure that he wanted the euro to remain “strong and stable”.  He indicated that Germany, which has broken the terms of the Pact for three years in a row, could count on understanding in Brussels.  He said that Germany was “simply in an extraordinarily difficult budgetary and financial situation.”  The Commission, he said, would take into account the fact that the budget deficit in Germany was indissociable from the continuing weak growth in the economy.  [Handelsblatt, 25th October 2003]

Berlusconi says deficit limit should be 4%
The Italian prime minister has added his pennyworth to the debate on the Stability Pact by saying that the rules should be changed to allow countries to borrow up to 4% of GDP instead of the current 3%.  He said that the 3% rule should not been seen as absolute – and then appeared to row back on his own statements.  He said that in times of growth the limit could be 1% or 2% but that in times of stagnation or recession it could be raised to 4%.  He also said that there could be exceptions “for individual states”.  When he realised this effectively meant that he did not think there should be a Stability Pact at all, Berlusconi said that he had been misunderstood and that he supported the Pact fully, including the 3% limit.  “My opinion is that the Stability Pact must remain as it is.  It is good as it is, and the 3% rule should not be thrown open for discussion.”  [Handelsblatt, 22nd October 2003]

Chirac says referendum decision “premature” 
The French President has received the heads of the various political parties represented in the National Assembly to discuss the new European constitution with them.  The first person in was Marie-George Buffet, the head of the Communist Party, who said the President considered that it would be “premature” to decide now to hold a referendum on the constitution, even though he allegedly had not ruled it out.  The next person in was Jean-Pierre Chevènement, the Eurosceptic socialist, who specifically called on the president to hold a referendum.  “The constitution is a dangerous document,” said Chevènement, “as for what it omits as for what it contains.”  Chevènement said Chirac was waiting to see how the negotiations turned out.  [Le Figaro, 27th October 2003]
	The prime minister, Jean-Pierre Raffarin, has also started to row back from his earlier commitment to a referendum [see Digest No. 178].  It is obvious the Government now fears that a referendum could turn against it.  While admitting that “no true Europe cannot want a referendum”, Raffarin said that he was worried about the risk of giving those French people who feel betrayed by their elites an opportunity to take their frustrations out on the Government by voting No.  [Judith Waintraub, Le Figaro, 28th October 2003]
	Jean-Pierre Chevènement used an interview after the meeting to denounce the euro once again.  He criticised “the absurd Stability Pact, a central bank which is always late in cutting interest rates, a suffocating euro”.  He said that the Maastricht criteria were dragging the economy down, not helping it up. [Béatrice Gurrey, Le Monde, 29th October 2003]

Enhanced cooperation enhances suspicion
A meeting between the Interior Ministers of the five biggest countries of the European Union, convened to discuss co-operation in justice and home affairs, has raised eyebrows in the European Commission and among other member states.  Officially the Commission says that the meeting between the ministers of Germany, France, the United Kingdom, Italy and Spain could show the way towards future meetings of this kind, in which sub-groups of states meet to decide common policies, which the others are then invited to follow.  Unofficially, however, people are concerned that the procedures of the EU might be usurped by deals agreed between the biggest players.  The French Foreign Minister justified the meeting by saying that it was already difficult enough to take decisions with 15 countries, and that it would get only more difficult with 25.  The worry is all the greater because the issues discussed by the ministers are already on the table in Brussels.  Austria and Denmark said they welcomed the meeting, Austria because it wants a common list of third countries to be established, to which illegal immigrants can be deported; Denmark because it says the biggest countries are the ones most affected by immigration and asylum.  But the Commission did get irritated when the five ministers said they might take back responsibility for negotiating repatriation agreements with certain countries (Russia, China, Ukraine, Pakistan and Turkey). The Commission believes that these countries can be made to co-operate with emigration issues only if quotas are established for legal immigration from those countries into the European Union.  [Frankfurter Allgemeine Zeitung, 22nd October 2003]
	Concerns have also been raised by the visit to Tehran of the foreign ministers of France, Germany and the United Kingdom.  Acting without any specific mandate from the EU, the three ministers appeared to be doing what “variable geometry” specifically allows them to do – to take common actions on a multilateral basis, even in the EU’s name.  But people are concerned that it will lead to the unravelling of the Brussels institutions.  The visit seems to have undermined the role of the High Representative for Common Foreign and Security Policy, Javier Solana.
	Moreover, the day before the summit in Brussels (16th – 17th October), France, Germany, the United Kingdom and Belgium met in a small committee to prepare their common position before the dinner for all 25 participants.  The meeting followed the trilateral summit in Berlin last month (France, Germany, the United Kingdom) which was called to discuss “European” defence policy.
	Scandinavian countries have also started the habit of meeting to hammer out common positions before summits, and they have recently asked the Baltic states along to their meetings too.  As one ambassador says, this is an inevitable trend as the EU expands to include 25 states.  “At meeting of the Council of Ministers,” says one ambassador, “there are so many of us that each minister has a screen in front of him to see who is speaking.”  Indeed, a special table has been built which is so long that you cannot see who is speaking without the special in-built screens!
	Now the smaller countries are beginning to worry that the general principle of “reinforced co-operation” will always mean that big countries decide among themselves first what all the others are expected to do.  The Tehran trip was certainly understood that way in many capitals.  They are unlikely to be reassured by the Belgian foreign minister, Louis Michel, who has said that any common initiative is welcome, so long as all countries are free to join it if they wish.  [Laurent Zecchini, Le Monde, 30th October 2003]
	Such “variable geometry” already exists, of course, in monetary union.  It is also provided for by the Treaties of Nice and Amsterdam, as well as by the draft constitution which has been proposed by the European Convention.  That document proposes that the Council of Ministers vote by qualified majority as to whether a normal common EU initiative can be launched in a reasonable time.  Only if it cannot will enhanced co-operation be allowed.  The draft also proposes that the initiative must have at least one third of member states behind it.  Some want this to be raised to 50%, while yet others want it to be lower, for fear that if it is too high, then initiatives will go ahead anyway outside the framework of EU law.  Whereas Nice said that such initiatives could not include military matters, the proposed constitution has removed this proviso and extended enhanced co-operation to military and diplomatic matters.  The British and the Swedes opposed this move in the Convention but are still negotiating on it in the Intergovernmental Conference.  [Thomas Ferenczi, Le Monde, 20th October 2003]

Eurostat scandal weakens Commission
A report sent by the Commission to the European Parliament on Eurostat has confirmed that irregular financial practices have been going on for at least ten years.  They include falsified tenders and the use of parallel accounting systems which fell outside of the control of the EU budget.  It is believed that several million euros disappeared into secret accounts in Luxembourg, Brussels and Madrid.  While revealing all these incriminating details, the report is also careful to exonerate the serving commissars.  The audit says, “There is no proof that these practices continued after 1999.”  The document also says that there was no personal enrichment involved in these irregular practices.  For the time being, the European Parliament seems happy to give the Commission the benefit of the doubt – employees of the European Union, whichever bit of it they work for, seem to know that they must hang together or hang separately.  Apparently, though, the atmosphere in the Commission is awful, with middle- and lower-level officials terrified that the boys from the anti-corruption squad will spring on them at any moment and ask to see the budget for their paperclips.  It is said that everyone is now too afraid to take any decisions, especially where putting contracts out to tender is concerned.  Also, internal reforms follow hard on the heels of one another.  The latest one is to insist that people change their jobs every five years, which apparently is too fast a pace for the Brussels bureaucrats.  Consequence:  in the words of one official, “the whole Commission is enfeebled.”  [Alexandrine Bouilhet, Le Figaro, 29th October 2003]
 
Franco-German common history book proposed
At a meeting in Poitiers on 28th October, the French regions and the German Länder have agreed on a programme of co-operation, designed to support the relaunch of the Franco-German relationship in recent months.  Six German regional prime ministers attended and nineteen out of France’s twenty-two regions were represented.  One of the main purposes of the initiative is to arrest and reverse the vertiginous drop in the teaching of French and German in German and French schools.  In future, the regions say they want to harmonise their education systems and encourage children from each country to study the language of the other.  The regions have therefore decided to support the project of writing a common history book which, they hope, will be the main textbook for secondary schools.  They also want to enable teachers to teach in either country.  [Henri de Bresson, Le Monde, 29th October 2003]
	The French Prime Minister and the German Chancellor, who attended the meeting, used the occasion to reinforce their common position against the attempts by Brussels to make them reduce their budget deficits.  Gerhard Schröder called on the Commission to show “intelligent reserve” on the matter of introducing anti-deficit procedures against Paris and Berlin.  He said that he hoped the Council of Finance Ministers meeting on 4th November would “be so clever as to avoid confrontation”.  In the present economic situation, he said, such a confrontation would be “negative for our economies and negative for Europe”.  Both countries claimed to be working for the good of Europe because, they said, growth in their economies would help growth in Europe generally.  [Henning Lohse, Die Welt, 29th October 2003]

Ministers try to clip Parliament’s wings 
New areas of discord have arisen in the Intergovernmental Conference.  The fifteen EU finance ministers have said that they do not agree with giving the European Parliament power to decide the EU budget, as the draft constitution proposes.  Meeting at Stresa in Italy, the fifteen finance ministers said they wanted the Parliament to have only a consultative role.  The Italian presidency has put their amendments onto the agenda for the IGC.  The attitude of the ministers infuriated the two representative of the European Parliament on the IGC, Inigo Mendez de Vigo and Klaus Hänsch.  Commissar Michel Barnier also protested, saying that no proposal made by the Convention should now be undone.  Several countries said that only foreign ministers had the right to propose amendments for discussion at the IGC, but the Italian presidency said it was normal that the concerns of the finance ministers should be discussed by it.  The representatives of Belgium, Luxembourg, Germany and France said that the balance achieved by the Convention should not now be disturbed by opening new negotiations and proposing new amendments; but the United Kingdom, Ireland, the Czech Republic, Lithuania and Latvia said they supported the finance ministers’ position.  Klaus Hänsch bitterly attacked this attempt to “sap the rights of the Parliament” and said the European Parliament would not abuse its powers.  The finance ministers also proposed that the Council of Ministers should have only an advisory role in deciding whether to launch an excessive deficit procedure; they also want to limit the powers of the Commission to lay down economic guidelines for the EU.  [Thomas Ferenczi, Le Monde, 29th October 2003;  Pierre Avril & Alexandrine Bouilhet, Le Figaro, 28th October 2003]
	There was confusion and embarrassment about this text in Austria, where the Finance Minister and Chancellor both denied the very existence of the document which had been agreed on at Stresa.  It was then published on the Internet site of one of Austria’s leading dailies.  [Der Standard, 27th October 2003]

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