August is the traditional month for invasions. Foreign politicians are on holiday, much of the harvest is finished and there is time to consolidate before winter sets in. So this time it was Georgia.
None of us who were around at the time will forget the August day in 1968, when Soviet bloc troops invaded Czechoslovakia to scupper the Prague Spring. On that very evening Mstislav Rostropovich and the USSR Symphony Orchestra gave a deeply moving performance of Dvorak’s cello concerto at a London Promenade Concert – a poignant memory indeed!
Has nothing changed after all? Russian troops moved into Georgia on August 8 2008, 40 years almost to a day later. But it’s not at all clear whether this was the launch of a more aggressive Russian foreign policy and reversion to an earlier model, or a justifiable response to Georgian military action in South Ossetia, an echo of the NATO campaign in Kosovo with different characters, as the Russians claim. The facts are always murky in these circumstances.
The OSCE seems to have serious doubts about Georgia’s role and there are even suggestions that the conflict was provoked by Vice President Cheney in order to boost McCain’s cause in the US elections.
Rash initiatives by the Georgian government in South Ossetia were almost certainly the trigger for the Russian action, but a trigger which Moscow had long been anticipating. The campaign was surely a far-reaching and thoroughly planned operation to damage the regime of President Mikhail Saakashvili, to assert Russia’s right to dictate political developments in its near abroad and to block NATO expansion in Ukraine and the Caucasus.
The tensions had been building for some time, apparently including a mounting level of cyber attacks on Georgian official websites similar to those previously experienced by Estonia, and reprisals against Russian sites by so-called “hacktivists” who specialise in DDOS – Distributed Denial of Service, where websites are sabotaged by swamping.
It is the scale of Russian actions in Georgia which may prove deeply counter-productive for Moscow. It seems likely to strengthen the US presence in the region and will raise the level of scepticism about Russia’s good faith in its international dealings. It will no doubt give quite a boost for those who wish to build new oil and gas pipelines which bypass Russia. Much will depend on how quickly the Russians withdraw from occupied Georgian territory and engage with OSCE and EU. There is no denying, though, that NATO expansion now looks much more challenging than it was before August 8. European members of the Alliance will have no enthusiasm for extending the guarantees of Article 5 to the Caucasus.
The European Union has acted quickly with its ceasefire proposals, some strong words and convening of a special summit in Brussels, where deep divisions of opinion were papered over and a united Franco-German position carried the day.
Europe is at pains to stress that the EU makes common cause with the Americans, but its rhetoric has been much more cautious. Sanctions have been rejected and dialogue sustained. If President Sarkozy and his colleagues can make real progress in their talks with the Russian leadership, even to the extent of launching a programme to resolve the “frozen conflicts” of South Ossetia and Abkhazia, then that would be a very considerable achievement
Russia needs the EU quite as much as the EU needs Russia, if only to counterbalance and moderate American policies in the region. While keeping the pinch of salt to hand (and remembering the black belt), it’s interesting to see what President Medvedev had to say to Euronews in defending the Russian position and expounding on the EU-Russia relationship.
Collapse of the Doha Round after seven years of negotiation must have been a major disappointment for the European Commission. As the Barroso team moves towards the twilight year of its five year term a positive result in Geneva would have somewhat alleviated the gloom following the Irish referendum, the suspension of the Lisbon Treaty process and the stormy economic environment facing Europe.
For Commissioner Peter Mandelson it was a bitter personal blow, since negotiation of a new global trade agreement was almost the raison d’être of his five years in Brussels.
Doha was named the WTO’s Development Round. It was intended to reflect the change in priorities which gave more recognition to the needs of developing countries and acknowledged the emergence of new economic powers. Unlike previous rounds, this was not a private party between the European Union and the United States. The powerhouse economies such as Brazil, India and China were major players and the poorer developing countries were expected to be major beneficiaries.
The talks apparently foundered on Indian and Chinese demands for a high level of protection against surges in food imports. The United States was fiercely opposed to these safeguard arrangements. So was Brazil and other agricultural exporters among the developing countries.
Impending elections played their part, certainly as far as the US was concerned, but also in India – see Carl Mortishead’s analysis in the London Times of the Indian political situation.
Failure in Geneva marks the end of an era when policy-makers across the globe pushed to open up trade and when vast numbers of people across the world benefited from rising living standards as a result.
There will be attempts to rescue something from the wreckage, but there are big dangers ahead. Protectionism is a real risk in a time of economic downturn. A new US president could be tempted down the same path as was taken by Bush in his early years, when he rushed to protect US steel and agriculture. Bilateral deals are likely to increase.
Europe has a crucial role to play in this uncertain environment. At least the EU maintains its commitment to an open world trading system and it must play to its considerable strengths to defend it. The fact that European trade policy is set at one remove from the pressures of national politics is a great advantage: even an irritable Sarkozy can be resisted. The Barroso Commission must keep up the good fight through the rest of its term of office.
As Brussels goes on holiday, so does this blogger. Back in September!
Serbia really has chosen the path to EU membership. Last week’s arrest of Radovan Karadzic was the clearest evidence yet of the new coalition government’s commitment to a mainstream European destiny for their country. Significantly, the move followed the appointment of a new chief for the Serbian intelligence services.
Commissioner Olli Rehn wanted to send a quick and positive signal to Belgrade following the arrest. He urged EU foreign ministers to speed up ratification of the Stabilisation and Association Agreement, but the Council of Ministers would not go so far, encouraging the Serbians to keep up the good work, but making no promises.
It seems that the Dutch were particularly cautious in their approach, as Netherlands radio made clear. The Srebrenica massacre remains an especially awful memory for the Dutch (although it was actually an indictment of the whole UN operation). They stress that the arrest of Ratko Mladic and Goran Hadzic is the vital next step.
Notwithstanding these reservations, the developments in Serbia must be a great satisfaction for Commissioner Rehn and the Commission as a whole. A few weeks ago it looked as if the Socialists might throw in their lot with the nationalist Radicals and take Serbia down a more easterly path, but the formation of the coalition with President Boris Tadic’s Democratic Party was reminiscent of that period in the late1970s when a fledgling Portuguese democracy was under threat and rescued by the determination of Portugal’s social democrats to join the European mainstream.
It seems unlikely that there will be any turning back for Serbia, but for a view from closer to home see Antal Dániel’s blog.
There is no doubt that the successful easterly expansion of the European Union is the EU’s greatest achievement of recent years. Its influence continues to spread among candidates, associates and partners. Of course the introduction of the acquis freed up trade and stimulated economic growth, but its impact has been much more profound:it has introduced a system of ethics into business and even into personal relationships for countries where communist regimes had totally eliminated any such standards.
But old habits die hard. Joining the EU is not an automatic guarantee of change and I suppose that the latest European Commission reports on Rumania and Bulgaria are evidence of that. By the way, Italy is also in the spotlight for the corruption in Naples.
The Commission has been tougher in its reports than many people expected, especially in relation to Bulgaria, but given the pressure it is under for managing the EU budget it had little choice. What’s more, the Commission has an obligation to give maximum support to those local forces seeking fundamental reform. And that includes the vast majority of the people themselves.
So a new Club Med is born! More than 40 presidents and/or prime ministers turned up in Paris on July 13 for the launch of the Union for the Mediterranean. It was a welcome diplomatic triumph for President Sarkozy, embattled as he is by a disillusioned and critical French public opinion.
When asked many years ago what was the collective term for a gathering of political leaders, British Prime Minister Callaghan suggested it was a “Lack of Principals”, and of course everybody is highly sceptical about the purpose and the prospects of the new body. It embraces all 27 member countries of the EU, the Balkans, the countries of the Maghreb and the Middle Eastern countries bordering the Mediterranean – 44 states in all including the Palestinian Authority. There are a few conflicting interests among that lot!
I must declare some sympathy with Colonel Gadhafi of Libya, who refused the invitation to Paris and gave a speech explaining why. It was the word Union which really got to him, given his lifelong experience in striving to create unions which failed, between Arabs, the Africans, the Maghreb countries, Libya and Egypt, Libya and Tunisia etc etc.
For example, he said, how could one possibly envisage a union between the countries of North Africa and those in Scandinavia “where it is common to see people walk around naked”. Quite so. It’s those Danish summer beaches!
Let’s agree with the Libyan leader that this is not a Union. But that doesn’t mean that it has no potential value. When Sarkozy originally floated the idea following his election it had the marks of a personal ego trip.He saw its membership confined to countries bordering the Med, quite firmly under French leadership, albeit with some financial support from the EU budget and widely perceived as a half-way house for Turkey in place of EU membership.
This formulation was well calculated to upset the Germans and everyone else, which it duly did, but with the help of Angela Merkel, Sarkozy’s brainwave has been transformed into a full-fledged EU initiative under the Barcelona process. See Stanley Crossick’s blog.
The Paris launch seemed to have a far more substantial political dimension than the Barcelona meetings ever did, so maybe the organisation can provide a valuable new forum for engagement between Europe and its neighbours and between the neighbours themselves. It is certainly conceived as a more balanced relationship, with a joint presidency and a secretariat outside the EU.
Europe needs to find traction for its role in advancing peace in the Middle East and the Paris meeting was notable for constructive comments made by the Israeli prime minister and the Syrian leader – see Mark Mardell’s blog - although a commitment to deal with weapons of mass destruction in the region had rather a hollow ring. If the new Union could really tackle problems of that scale it would be something special indeed.
But let’s look at some of the more practical long-term aims, which could offer major benefits to the region, such as cleaning up the Med, managing water resources (which is one of the conflict triggers in the Middle East), developing solar energy capabilities, improving transport links and tackling natural disasters. Really effective action in these areas could be a major contribution to the wellbeing of the region as a whole – and an experience in working together.
One issue of fundamental importance to the non-EU participants is better access for their food exports to European markets, but I saw no mention of that in the communiqué or reports of the Paris meeting. Given Mr Sarkozy’s attacks on Commissioner Mandelson for his stance on Doha it looks like deliberate avoidance, yet must surely be a fundamental element in helping to build the economies of our southern neighbours.
As the Doha Round reaches its climax (or anti-climax) perhaps this issue will be decided in another forum.
The immediate challenge is to decide where the secretariat is to be based, with the aim of having a fully operational organisation by the end of 2008. Let’s hope some of the high-flown rhetoric can be translated into tangible results and above all that the Union of the Mediterranean will provide a mechanism for the EU to make a substantive contribution to peace in the Middle East.
I see that the French National Assembly has agreed a compromise proposal on the accession referendum, which will give the President the power to opt for the people or the parliament to approve Turkish membership.
The clause requiring a popular vote for any new accession increasing the EU population by 5 per cent will remain in the French constitution, but the President will now be able to choose decision by parliament instead, as long as he gets the support of a three-fifths majority in both the Senate and the National Assembly.
Final decision on this formula is expected at the Versailles Congress on July 21, when various constitutional changes should be confirmed.
Mr Sarkozy has meantime confirmed to the European Parliament that further enlargement cannot be contemplated before the Lisbon Treaty has been implemented.
I may be sceptical about the timetable for EU enlargement of the European Union following Ireland’s referendum, but there has been one welcome development as France takes over the presidency: the French Senate has voted by 297 votes to seven to scrap the obligation to hold a national referendum over Turkish membership.
The issue is scheduled for final decision on July 7, when the National Assembly will be asked to revoke a recent bid to retain the clause.
Of course Turkey was not named in the legislation, which was introduced into the constitution by President Chirac in 2005. It applied to any candidate country representing more than 5 per cent of the EU population, but nobody doubted its target. It has seriously damaged relations between France and Turkey and cast a shadow over France’s chairmanship of the enlargement negotiations for the next six months.
Mr Sarkozy no doubt remains sceptical about Turkish membership, but this move would restore an element of good faith while talks continue. Chirac’s 2005 gesture did seem a somewhat cynical response in the face of opinion polls of the time.
August is the traditional month for invasions. Foreign politicians are on holiday, much of the harvest has finished and there’s time to consolidate before winter sets in. So this time it was Georgia.
None of us who were around at the time will forget the August day in 1968 when Soviet bloc troops invaded Czechoslovakia to scupper the Prague Spring. On that very evening Mstislav Rostropovich and the USSR Symphony Orchestra gave a deeply moving performance of Dvorak’s cello concerto at a London Promenade Concert – a very poignant memory.
So has nothing changed? Russian troops moved into Georgia on August 8 2008, 40 years almost to a day later. But it’s not at all clear whether this was the launch of a more aggressive Russian foreign policy and reversion to an earlier model, or a justifiable response to Georgian military action in South Ossetia, an echo of the NATO campaign in Kosovo with different characters, as the Russians would claim. Truth is always the victim in these circumstances.
The OSCE seems to have serious reservations about Georgia’s role in the whole affair and there are even suggestions that the conflict was provoked by Vice President Dick Cheney in order to boost McCain’s cause in the US elections.
Rash initiatives by the Georgian government in South Ossetia were almost certainly the trigger for the Russian action, but a trigger which Moscow had long been anticipating. Its campaign was surely a far-reaching and thoroughly planned operation to damage the regime of President Mikhail Saakashvili, to assert Russia’s right to dictate political developments in its near abroad and to block NATO expansion in Ukraine and the Caucasus.
The tensions had been building for some months, apparently including a mounting level of cyber attacks on Georgian official websites similar to those previously experienced by Estonia, followed by reprisals against Russian sites by other so-called “hacktivists” who specialise in DDOS – Distributed Denial of Service, where websites are sabotaged by swamping.
It is the scale of Russian actions which may prove deeply counter-productive for Moscow. It seems likely to strengthen the US presence in the region and will raise the level of scepticism about Russia’s good faith in its international dealings. It will no doubt give quite a boost for those who wish to build new oil and gas pipelines which bypass Russia. Much will depend on how quickly the Russians withdraw from occupied Georgian territory and engage with OSCE and EU. However on NATO membership for Ukraine and Georgia the Russians may well have made their point. To offer NATO protection for these two countries under Article 5 would be to play for very high stakes.
The European Union has acted quickly with its ceasefire proposals, some strong words and convening of a special summit in Brussels, where deep divisions of opinion were papered over and a united Franco-German position carried the day.
Europe is at pains to stress that the EU makes common cause with the Americans, but its rhetoric has been much more cautious. Sanctions have been rejected and dialogue sustained. If President Sarkozy and his colleagues can make real progress in their talks with the Russian leadership, especially to the extent of launching a programme to resolve the “frozen conflicts” of South Ossetia and Abkhazia, then that would be a very considerable achievement
Russia needs the EU quite as much as the EU needs Russia, if only to counterbalance and moderate American policies in the region. While keeping the pinch of salt to hand it’s interesting to see what President Medvedev had to say to Euronews in defending the Russian position and describing Russia’s relationship with the EU.
The worst fears of Europe’s leaders have been realised: Ireland’s voters have scuppered the Lisbon Treaty, with 862,415 votes against and 752,451 in favour on a turnout of 53.4 per cent in the Irish referendum. Politicians can complain till the cows come home about small countries and slim majorities. After all, the Irish “no” voters represent maybe one in 300 of the EU’s voting population. But the people have spoken and Ireland cannot ratify. The treaty will not come into effect at the start of 2009.
There will be no quick and easy solution. The vote was surely another demonstration of popular disdain of the political elites, which is widespread across Europe. It was not enough for all the major parties, the business organisations and the trade unions to argue for a “yes” vote. Their leadership was widely rejected.
I see that the Irish Taoiseach Brian Cowen says that this is Europe’s problem. That seems a bit of an understatement, also known as passing the buck. But since nobody can identify particular issues which led to the Irish rejection I suppose Mr Cowen is saying that the Irish government can think of no specific changes which could be made to the treaty which would make it more palatable for a second referendum. There is no appetite in Ireland to repeat the double.
We’re back to the old argument about representative democracy versus the popular vote. The referendum drew in all kinds of extraordinary allegations about the treaty. One poster said it meant that children would all have to be micro-chipped. Some campaigners claimed that abortion would be legalised under the treaty and others that Irish youngsters would be conscripted for a European army.
Yet people’s commonest complaint was that they simply did not understand Lisbon and they refused to vote for something they did not understand. It’s a classic situation where parliament does seem the right place to decide highly complex issues. But it has to be based on the assumption that politicians have the trust of the people. To win the support of the people requires a vision, and there was little sign of that in the Irish campaign.
When French and Dutch voters rejected the Constitutional Treaty in 2005 enormous efforts were made by Sarkozy, Merkel and others to get the reform process back on track. It will be difficult to find the political will to repeat such a massive exercise, especially in a period when public opinion across Europe is increasingly preoccupied with prices, jobs and immigration. Two-speed Europe, referendum by-pass, Irish opt-out: none of them seems to provide an answer.
Most likely is that the treaty will be put to sleep for the time being and with it the next phase of enlargement. Business can continue as usual (the EU has been functioning pretty well since the 2004 enlargement) and efforts will be made to strengthen common positions on global issues like climate change, energy and foreign affairs, but it could be quite a while before there is a president of the European Council and a foreign affairs supremo bestriding the rue Charlemagne between the Commission and the Council.
Without the institutional streamlining provided by the Lisbon Treaty we can expect membership for the Balkan countries and Turkey to be seriously delayed and even put in further doubt. The painful challenge of setting a course for the EU in the aftermath of the Irish vote will fall to the French presidency, which takes office on July 1. Although the French will be frantically seeking a solution, putting enlargement on the back burner might not go down so badly in Paris.
“That’s the only cut this year!” quipped a council member when European Central Bank president Jean-Claude Trichet took the knife to the ECB’s birthday cake in Frankfurt on June 2. The occasion was the tenth anniversary of the Bank’s establishment. Apparently the mood in Frankfurt was of genuine celebration tempered by concern at the conflicting challenges which the Bank currently faces over inflation and growth.
It has been a long journey since June 1998. It’s strange to think that the decisions on who would join the euro zone were taken under British presidency in May ‘98. In the chair was Prime Minister Tony Blair, who had won a landslide election just twelve months earlier. He had to praise the significance of the euro, although he had decided against taking Britain into the new currency, a decision regarded by many people as one of his biggest failures given the strength of his position, and no doubt strongly influenced by Gordon Brown at the Treasury.
The most interesting drama at the time was over the ECB presidency. President Chirac demanded that Trichet, who was then governor of the Bank of France, should be ECB president, whereas Wim Duisenberg from the Netherlands was the consensus candidate.
The crisis was resolved with a classic fudge. I will be far too old to serve two terms as ECB president, said Duisenberg, but any decision to resign “will be my decision alone”. There was, however, an understanding that Trichet would take over once Wim had taken that his solitary decision. Chirac conceded. Relief all round.
When the French president pressed for Trichet’s appointment in 1998 he no doubt hoped that a more relaxed French regime would prevail over Germanic discipline, setting interest rates with an eye to boosting growth. In the event Trichet has staunchly defended ECB independence and its key mission: to fight inflation. Trichet’s own appreciation of the ECB’s role, its record and the tasks ahead was summarised in his Frankfurt birthday speech.
The record of the ECB has surpassed expectations. Its handling of the sub-prime crisis since last August has impressed everyone and the euro continues to strengthen its position in global markets – as well as appreciating in value. It now accounts for around 25 per cent of foreign currency reserves across the globe and we can expect that to rise steadily. China, for one, is keen to increase its euro holdings.
May 1998 marked the creation of the Euro Group of ministers. This group of 11 countries was expected to become a potent force in European politics and it was Britain’s exclusion from the club which many of us thought would be the biggest penalty for not joining the euro zone.
I can’t say it has turned out like that. For a start, total disregard of the Stability and Growth Pact by some of the biggest members caused deep divisions within the group. Not much solidarity there!
There has also been real divergence in the performance of the euro zone economies, both in terms of their growth rates and their inflation. Maybe the interests of the euro zone countries (15 of them now) are so varied that they will never be able to take common decisions on such issues as international exchange rates and the value of the euro, economic management or taxation policy. President Sarkozy, for instance, has called for a cut in certain VAT rates across the EU to put the brake on rising prices, but his finance minister Mme Lagarde got short shrift from colleagues when she put forward the idea at the recent Frankfurt meeting.
On the international front the Euro Group president, Luxembourg’s Juncker, has bemoaned Europe’s failure to speak with one voice in the IMF. The question is, what should the voice say? A high level delegation to China was hyped as a first example of euro diplomacy, but it does not seem to have amounted to much. Maybe that could be a role for the soon-to-be-named Council president – provided he/she comes from a member of the Euro Group.
I see that Slovakia will be the next country to adopt the euro, as of January 1 2009, when it abandons the koruna. It has revalued its currency in advance as an anti-inflationary move. Political opinion in Denmark continues to move in favour of membership. A referendum would of course be needed, and Sweden is publicly stating that a positive Danish vote would open the way for Sweden to consult the people as well, at the earliest in 2011.
Which leaves the United Kingdom. Willem Buiter, former member of the Bank of England’s Monetary Policy Committee is in no doubt. In his view Britain should join now. The FT’s Martin Woolf strongly disagrees.
Buiter refers to the enormous external liabilities of the UK’s financial services industry – €400bn in foreign currencies in his estimate, which is four times the country’s GDP. The Bank of England, he maintains, could never act as lender of last resort for such liabilities. Joining the euro and depending on the resources of the European Central Bank is for him the only way to defend the UK from an Iceland situation, where vast liabilities have accumulated in proportion to the size of the domestic economy.
It’s a bit tough being compared with Iceland, but it does focus on some of the issues raised by the sub-prime banking crisis and the new perceptions of risk that we have to live with. But probably the biggest test for the ECB over the next 10 years will be how far the euro zone can handle its own internal tensions and the divergence of its national economies.
Allemagne quartorze points, Royaume-Uni 14 points, la Russie 272 points, Ukraine 230 points, la Grèce 218 points. So it was a runaway victory for the Russian entry in the Eurovision Song Contest, held in Belgrade on May 24, and oblivion for most west European entries. The centre of gravity moves further east. See you in Moscow in 2009!
Some (western European) commentators see the modern contest as a great conspiracy of political block voting, with the Nordics, the Balkans, the East Europeans voting for their neighbours and so swinging the results.
But it seems the reality is much more complicated. It reflects the complex ethnic mix in so many European countries. The fact that Estonia, Latvia, Lithuania and Ukraine each gave the full 12 points to the Russian entry (as did Israel) reflects the size of the Russian ethnic population in these countries rather than any political block vote.
Likewise for the former Yugoslavia, with its intermixing of Serbian, Bosnian and Slovenian populations. Bearing in mind that you cannot vote for your own national entry, what more natural than to vote for your ethnic identity? Douze points for the cousins. By the same token, Turkey always does well from the German voters, mirroring its population of 2.6 million of Turkish extraction, although I see that this year Greece took Germany’s 12 points and Turkey only 10.
If you managed to miss three hours of the actual final, then you can treat yourself to a (brief) taster of any of the finalists - and maybe decide that the outcome was not so unfair after all. There’s an amalgam of western pop and eastern music which can work rather well – and is maybe part of a changing European identity – an eastwards shift in our cultural centre of gravity.
