As I mentioned previously, the main tone I could detect within the European press in reaction to the announcement last week of the specific personnel and assignments of the new Juncker Commission team (to take office – barring any problems with confirmation before the Parliament – on NOV 1) was along these lines:

And with that I thought that the topic was exhausted. Not quite, though: one of the Brussels correspondents of the leading Dutch business daily Het Financiële Dagblad, Ulko Jonker, points out a particular aspect of that “fox guarding henhouses” syndrome that I had not realized, and that is too full of import to be left unmentioned. (Link is behind a paywall with a limited number of articles free per month for non-subscribers.)

Right then, Jonker’s list of EU Commissioner oddities includes:

• The British commissioner in charge of bringing London to heel with Brussels’ financial regulations;
• “[T]he Greek who has to carry out migration policy” (Actually, this was very smart: Greece is one of the main EU member-states charged with holding the line against illegal immigrants – principally along its short border with Turkey – so why not put the Greek Commissioner in charge?);
• “[T]he Hungarian who can explain about citizens’ rights” (Aha, I did note this puzzling paradox in my previous post, it seems at least some elements of the Fourth Estate are taking note of Hungary’s creeping authoritarianism.);
• “[T]he German illiterate who is responsible for the digital economy” (Harsh, but again this is essentially what I remarked on in that previous post.); and
• “[T]he Cypriot who will do ‘crisis management'” (That would be Christos Stylianides, of Humanitarian Aid; I don’t get why he would not be up to the job.)

Jonker’s explanation for all this is up top in his lede: “The biggest difference between him and his predecessor José Manuel Barroso is that Jean-Claude Juncker has a sense of humor.”

Frenchman’s Collision Course with France

It’s not always so funny though, because surely the biggest paradox among the new Commissioners is France’s Pierre Moscovici, put in charge of “Economic and Financial Affairs, Taxation and Customs” – otherwise known as the “budget czar” since Moscovici’s DG is in charge of monitoring member-state budgets to ensure they adhere to the 3%-of-GDP-or-less standard – and to start proceedings for fining the EU government in question when its budget does not. And yes, it is France that looks set to be the greatest offender along these lines, with a projected 4.4% deficit for this year. (more…)

The scoop ultimately belonged to the Financial Times, but that article is ensconced behind their semi-porous paywall. So here at €S we had to get the news from Lidové noviny, from the Twitter alert by @cznews (Oh no! Not Rozpočtoví hříšnici!):

Rozpočtoví hříšnici v eurozóně zaplatí pokutu ve výši 0,2 % HDP: Země eurozóny, které v budoucnosti po... http://bit.ly/9X8tCn #czech #news

September 24, 2010 9:09 am via twitterfeedReplyRetweetFavorite

@cznews

Czech Business News

And a scoop it truly is, for the FT journalists (Peter Spiegel and Joshua Chaffin) have unearthed proposed “legislation” set to be officially unveiled by Economic and Monetary Affairs Commissioner Olli Rehn next Wednesday, which their article terms “the EU’s most ambitious attempt to reorder its economic governance since this spring’s debt crisis that nearly destroyed the single currency.” Basically, the Commission would step up to take up a role in examining the national budgets of the 16 Eurozone member-states in a big way, with the authority to impose fines of 0.2% of GDP on governments which “consistently fail to bring down their public debt levels” – or “fail to control their annual spending,” or “fail to reform their economies to improve their competitiveness.” Once having decided to fine a member-state, the Commission under the proposal could only be stopped by a qualified majority vote from the European Council within 10 days of the decision. (Similar rules for member-states still outside the Eurozone will apparently be forthcoming later.)

Even just ignoring recommendations about how to improve national competitiveness (from the Commission presumably; and so how can they really be described as “recommendations”?) could make a government liable to a 0.1% of GDP fine. And, somewhat ludicrously, the Commission would also maintain a productivity data “scoreboard,” sort of like the running list of grades on an elementary school classroom wall.

Pretty amazing – especially when those of us with any sort of historical memory (it need not go back any further than ten years or so) recall the Stability and Growth Pact that was a key component to the introduction of the euro at the end of the 1990s. That also prescribed monitoring of (Eurozone) member-states’ public finances by the Commission; and it also prescribed “sanctions” (initially fines) for those governments who continued to violate the fiscal rules (budget deficit less than 3% of GDP, national debt less than 60% of GDP or getting there) after repeated warnings.

But it didn’t work: among the first to break these rules were the giants making up the EU’s “axis,” namely Germany and France, and no one ever dared to try to punish them in any way. Besides, there was always the fundamental bit of illogic in such arrangements of trying to punish by means of a monetary fine a government which has gotten into trouble because it doesn’t have enough money available.

So Why Now?

What’s the difference this time, that makes Commission staff think that these sorts of proposals will be accepted, and that they even will work if enacted to influence member-state government behavior? Obviously it’s the big Greek/Spanish/Portuguese/Irish/etc. debt crisis of 2010, which in May prompted the panicked assembling of a €700 billion+ support fund for states in trouble with their sovereign debt. It’s by no means clear that that will be enough to head off trouble; it’s by no means clear, for example, that Greece will in fact be able to avoid default (or, probably, the same thing camouflaged as debt “restructuring”).

Neither is it clear that member-states will be at all receptive to these latest Commission proposals as they are formally presented next week (together with similar ones from Council President Herman van Rompuy). It’s hard to avoid the thought that this sort of supervision of their budget processes from an external, super-national body of experts, backed up by sanctions with financial teeth, was not what most if not all of them thought they were getting into when they joined the EU and then the Eurozone. That historical process of European integration is likely about to face a decisive “gut check” moment, coming up next week.

Greece has been having its well-known fiscal problems, but there’s no way that it should resort to going to the International Monetary Fund for money to help out. Quite apart from some technical problems with that approach (e.g. the IMF generally tells you what to do with your monetary policy, in exchange for getting its money; as a member of the Eurozone, Greece has no control over its monetary policy), that would simply be an intolerable political gesture showing the world that the European Union is incapable of cleaning up its own financial problems.

But then what is the EU to do in light of continuing Greek fiscal weakness? Why, set up its own version of the IMF! Call it, for now, the EWF (Europäische Währungsfonds) – yes, using the German term, since it was German Finance Minister Wolfgang Schäuble who got the whole idea started with remarks he made this past weekend. But the idea was further endorsed (at least in a vague way) yesterday by the EU’s man-on-the-spot Olli Rehn, the new EU Commissioner for Economic and Monetary Affairs. For now, it is still nothing but an idea, but that also means it can go in any of a number of directions, something pointed out in the very title of an analysis in the German commentary newspaper Die Zeit: The Fund can be a savior or a bankruptcy-administrator. (more…)

I have to assume that my Euro-savvy readers will be quite aware of the growing financial crisis involving the euro and the so-called “PIIGS” countries that are in fiscal trouble (“Portugal, Ireland, Italy, Greece, Spain,” though these days Italy is usually left out). Greece is at the center of attention now, and the main issue when it comes to its fiscal problems – combined with its government’s dishonesty in reporting these in the past – seems to be the conflict between the emotional impulses to bail it out from EU or European Central Bank funds or punish its sins instead by simply letting the country suffer. The EU summit in Brussels on Thursday (11 February) is shaping up to be decisive in deciding which way things will go – assuming that the assembled EU heads of government discuss the problem in the first place, as I understand that that is not really on their formal agenda!

The dominant EU country within the governing structures of the EU and the European Central Bank is of course Germany, which is also the main economy in an opposite fiscal situation to that of the PIIGS states and so theoretically able financially to provide much of the aid that Greece needs. That is why it has been interesting to read coverage of this problem in Die Welt, the mainstream German paper not quite as authoritative as Die Zeit (and the latter is more of a pure opinion-publication anyway), but still with a respected reputation as a daily that is distributed nationwide. (more…)

Die Zeit today brings doleful news: Germany has a relapse! What the unnamed journalist (no by-line) is referring to here specifically is what he calls the “Maastricht Criteria,” according to which EU member-states are supposed to keep their government budget deficits to 3% of GDP or less. (That’s OK as a name, but it would be more accurate to call this requirement part of the Stability and Growth Pact that was agreed to as a pre-condition for the establishment of the euro.) Sure enough, the European Commission now calculates (in a report released today) that the German debt this year will amount to a full 3.9% of GDP – and next year even 5.9%! And all this, the Die Zeit article notes, just two years after Germany had managed to get itself out of the Commission’s bad graces (actually, out of a full-scale official EU “penalty process”) for violating this rule!

Well, to offer a quick bit of economic analysis: No sh–, Sherlock! (more…)

I wrote in this space almost a week ago about economic policy chaos in the German government, and a new piece in Berlin’s Der Tagesspiegel confirms that that bunch has become little more familiar with actual economic reality in the interval. Steinmeier warns EU-partners about turning away from the Stability Pact is the headline; the lede: “Germany’s Foreign Minister is worried about finances. Not in connection with the current crisis, but the stable euro. He takes the other EU-lands to task – they need to follow the euro-rules again soon.”

Don’t recall the Stability Pact (more properly, the EU Stability and Growth Pact)? That’s too bad, since it was a favorite topic of this weblog back in the day, especially in 2003. It’s the agreement that underpins the euro, and in fact preceded the formal establishment of the euro, by which all EU states (but especially those using the euro as their currency) pledge to keep their budget deficits to 3% of their GDP or less, and to either keep their national debt below 60% of GDP or – if it already is above that level – to make steady progress in getting it so that it’s below. The idea is to prevent euro-using states from taking advantage of the euro’s benefits (e.g. lower interest rates for their government debt) while at the same time undermining its stability through profligate government spending. All that commentary back in 2003 mostly had to do with the revelation of the ugly political reality that Germany and France – the Union’s heavyweight countries – could violate the Pact whenever they wanted, without facing adverse consequences, all while lesser states (Portugal, the Netherlands) were still forced to take it seriously. Ironically enough, this was a German initiative in the first place, required in exchange for their willingness to give up the deutsche mark, to keep those profligate Latin countries (like the Italians) from ruining the common euro-project. (more…)

One thing you can say about Czech president Václav Klaus, he’s never loath to let people know his opinions. Perhaps that’s good for a head-of-state, you might say – we don’t want any slippery focus-group-pandering politician in that top office, even if it’s mostly ceremonial! – but there’s a better case to be made that, in fact, it’s not so good. Consider this: heads-of-state generally carry the title “president,” but only in that major subset of the world’s countries which call themselves (in one form or the other) “republics,” having at some point in their histories discarded the king/queen/prince/duke representative of the hereditary, unelected system of rule that emerged in most places out of the mists of history. But a lot of other countries have still kept their king/queen/prince/duke around; so they’re not republics, although by now the sovereign generally has only a fraction of the political power he/she once wielded. (more…)

Lately in EuroSavant we’ve been reviewing articles complaining over economic slowdowns in the Netherlands and in Germany – “complaining” from outsiders’ points-of-view, that is, so perhaps you can assume some element of Schadenfreude. Now comes a piece in the German opinion newspaper Die Zeit (United in Stagnation) advising us not to count too much on the European Union to pull such countries out of their economic problems, not if the draft EU Constitution is any guide. At least when it comes to economic policy, author Petra Pinzler writes, that Constitution is “as superfluous as a bicycle for a fish.” (more…)

The issue of that proposed European Constitution – remember that thing? – simply will not go away, probably because it is said to be essential to ensure that the EU can continue to function after that 67% expansion (15 expanding by 10) that is due to happen on the upcoming May 1. Indeed, we’ve already passed the point at which it is inevitable that, even in the best-case scenario, that Constitution won’t be fully adopted and in-place until some time after the EU has expanded to 25. Fortunately, as The Economist recently reported (subscription required), some signs have arisen recently to give hope that that agreement over the Constitution and its adoption will happen sooner rather than later.

“Fortunately”? Actually, it’s useful to keep in mind the fact that the whole constitutional process is not just a matter of smoothing out the potholes and bumps along the way to a common goal everyone can agree is worth attaining. No, some folks out there just wish the whole thing would be canned, once and for all. Among these is in fact The Economist, which last June supplemented its article on Where to File Europe’s new constitution (subscription required) with a starkly eloquent cover-illustration (at least in its European edition): a filled-to-overflowing trash can. But The Economist is the English-language press, of course; and you rather look mainly to EuroSavant for the foreign-language press (although long-time readers will know that I dip into the British press on occasion).

No problem: There’s plenty of anti-EuroConstitution rhetoric there, too, especially if you want to be lazy (OK, I admit it) and head straight to the tried-and-true anti-Euro talking-shop as the housewife heads out for cuts of meat to her local butcher-shop. I refer here, of course, to Le Monde Diplomatique, the monthly sister publication to the leading French daily Le Monde. (more…)

Bernard Bulcke, writing for Belgium’s main Flemish-language newspaper De Standaard, of which he is editor, makes some interesting observations in an editorial sub-titled Europe and Its Unknown Harbor (subscription required) regarding the whole attempt to give the European Union something at least approximating a Constitution. (I use the article’s sub-title because its title is straightforward and boring.)

(By the way, if you want intelligent comment in Dutch about that upcoming Brussels summit, you’ll have to look to Flanders. The Dutch press is all in a tizzy because Crown Princess Máxima just had her baby, a girl, who is now second-in-line to the Dutch throne behind her father, Crown Prince Willem Alexander. There has even been a poem written by unofficial Dutch poet-laureate Gerrit Komrij; its first line is “There is a little child. Everyone is happy.” Let’s hope Premier Balkenende and his staff can regain their focus on Brussels and the draft Constitution in time.) (more…)

It looks like I’ve gotten my comeuppance for my recent preoccupation on these pages with next summer’s European Cup football championship – and with clam penises (yes, sad but true). Edward over at “A Fistful of Euros” has scooped me on the prospect that has now arisen that the even the Netherlands government’s budget deficit might slip above the Stability Pact’s 3% limit – this when it is the Dutch finance minister Gerrit Zalm (apparently known in internal EU circles as Il Duro, or “the hard-assed one” in Italian) who is raising the biggest stink about Germany and France not meeting that obligation for three years in a row now. He scooped me when I’m the one who lives in Holland!

Fortunately, our division of labor still holds – I can take a look into the Dutch on-line press to see what is being written locally about this predicament. (Frans Groenendijk, in comments to Edward’s post, already examines what Zalm has written on the subject in his own (i.e. Zalm’s) weblog. Frans has one, too.)

Coverage in the NRC Handelsblad is extensive, while in some of the other, more down-market papers it is missing entirely – this is a complicated financial affair that risks making Dutch eyes glaze over in boredom, I guess. For those interested nonetheless, a good place is to start is in their lead article. (more…)

Now that the EU foreign ministers’ meeting in Naples of last weekend – part of the Intergovernmental Conference (IGC) for ratifying the draft Constitutional Treaty – is in the past, we transition to after-the-fact assessments. For this, why not go to Poland, one country that had a clear issue at stake at Naples, namely the retention it desires (together with Spain) of the voting-weights for the European Council set down in the 2000 Nice Treaty? Yes, this was one of the two big, knotty issues that was to be deferred for handling at the Brussels summit coming up on the 12th and 13th of December – but, to hear the Polish press tell it, there were plenty of developments at Naples on the “Nice question” nonetheless.

For once let’s start out with a contribution from Zycie Warszawy, entitled Lucky Thirteen. (more…)

Let’s now go to the reporting of the run-up to that EU IGC in Naples (and its early going) in the Danish press. If you want championship coverage of just what was contained in that omnibus compromise proposal distributed last Tuesday by the foreign ministry of the current-EU president, Italy, the piece to turn to is Politiken’s article Denmark Concerned over Italian Proposal for Constitution. (more…)

We’re back “in the groove” now, as you’d expect we would be, since there are big things going on. Yesterday and today in Naples there has taken place a meeting of EU foreign minsters constituting the latest step in the process of formal negotiations over the proposed European Constitution collectively termed the “Intergovernmental Conference” (IGC). The French press covers the run-up to this meeting well. (Coverage of what is actually accomplished – if anything – will probably be available by Monday.) (more…)

Today we’re back to the €S bread-and-butter – interesting articles in the European press on political subjects – and in fact we resort to a long-time favorite source, Die Zeit. That newspaper’s latest assessment on the situation in Iraq is in an article entitled A Victory Without a Victor, and sub-titled “If America fails in Iraq, Europe loses as well,” by Matthias Naß.

(By the way, give a half-second of pity in passing here for Herr Naß who, because of a recent spelling reform in Germany, is really supposed to have changed the spelling of his name to “Nass.” But this here is EuroSavant sovereign territory, and the authorities in charge of this chunk of cyber-space intend to respect the family name Naß was born under, even though it also means “wet, damp” in German.) (more…)

You know that has to be true when the hardest-liner on the side of making France pay a fine for its flouting of the 3%-of-GDP budget deficit limit, Dutch finance minister Gerrit Zalm, finally throws in the towel. That he is now doing so is clear from an interview published in today’s Het Financiële Dagbald (subscription required). The scheduled meeting next Monday evening of EU finance ministers, long thought to be a setting for confrontation, will now merely be a formality as the lenient stance proposed by EU Economic and Monetary Affairs Commissioner Perdo Solbes is approved. Even though for him personally Monday’s meeting is sure to be, as the article puts it, “a long and unpleasant session,” in the end Zalm himself might even vote to approve Solbes’ proposal, if only to head off even more-lenient treatment of the French that some may use that occasion to advance. (more…)

Can I write some more about that last week’s “European Council” (i.e. summit of European heads-of-state/government) in Brussels? There is at least one loose end to tidy up – interesting enough in itself to prompt an essay from Die Zeit.

There were a few other things that happened in Brussels, besides Jacques Chirac representing Germany for a day, and everybody reciting for the umpteenth time their stand on the draft Constitution. For one thing, the assembled leaders also approved the creation of a new European agency to coordinate immigration controls at the EU’s expanded borders. But of greater interest is the “growth initiative” that also constituted part of the summit’s business. That was mainly what the EU leaders talked about Thursday afternoon, after their no-progress talks on the draft Constitution of that morning. (more…)

As varied as the individual details may have been, one theme clearly predominates the preceding accounts on this website, from the French, Dutch, and the Czech press, of the progress of the EU draft Constitution Intergovernmental Conference (IGC) so far. And that is, of course, that there has been virtually none – indeed, that there is even considerable dissatisfaction over the process currently being used to try to gain common agreement on an EU Constitution. (more…)

Now that we’ve already covered German reporting and commentary on Jacques Chirac acting to represent German interests during the second day of the European summit in Brussels (today, in fact), let’s look at the French side. Another day’s passing has even allowed the time for more detailed, nuanced coverage to spring up in the French press, and so I concentrate on these recent articles. (more…)

Today’s topic for a press review is of course the summit held yesterday in Berlin between the leaders of the EU’s “Big Three” – Germany’s Schröder, France’s Chirac, and Britain’s Blair. The subject on the table (but, as it turned out, not the only subject) was Iraq – where to go with regard to that country’s rebuilding process, what posture to take going into the crucial meetings around the opening of the UN General Assembly to occur this following week, and how to respond generally to the Americans’ patent need for a bit of assistance there.

You remember from our past discussion, here, that two of those three (Schröder and Chirac) already met last week, also in Berlin. Now, that occasion was supposedly not for the express purpose of meeting one-on-one per se, but rather to mark the first-ever joint session of the combined German and French cabinets in the German capital. That event had been planned in advance, but nonetheless it gave the two heads-of-cabinet a convenient opportunity to confer in advance of their meeting yesterday with Tony Blair, and confer they did.

What’s going on when there’s to be a three-way meeting, but two of the three have their own little meeting ahead of time? In such a case the suspicion has to arise that the thing has really metamorphosed into, in effect, a two-way meeting, between the already-met (in a posture of solidarity forged during their previous get-together) and the third, late arrival. And don’t forget yet another meeting still, that huge meeting later this week at the UN General Assembly, which will be attended by most of the involved heads of state, and which will be marked by meetings between Chirac and Schröder on the one hand and President Bush on the other – separate meetings with each. This three-way meeting in Berlin looks an awful lot like a training-session for those all-the-marbles meetings in New York. A by-now-common preparatory technique among politicians preparing for a big debate is to find a preliminary sparring partner who can best imitate the opponent that politician will face when he is later debating for real – could Tony Blair have unwittingly been fooled into assuming this role for Messrs. Schröder and Chirac, ahead of their one-on-one conversations with George W. Bush in New York?

Among the many English-language dispatches covering the summit, the Washington Post’s report ends by recounting the “embarrassing question” the three leaders encountered at their joint news conference: Was Blair seen by the other two as simply “Bush’s envoy to the talks.” Oh no, no, they hastened to answer – Chirac even magnanimously said “I want to pay tribute to the vivid imagination of the last journalist,” i.e. the poser of the question. The other common elements you’ll be able to read about in most all the coverage were that all three agreed that the UN must be given a “key role” in Iraq, but disagreed on how long it should take to do that, Chirac demanding that this take place “within a few months”; and they all at least agreed that “we all want to see a stable Iraq,” in Blair’s words. Nothing very radical there.

But the English-language press – usually – is not EuroSavant’s happy hunting-ground, nor are the common elements that everybody is reporting the usual grist for its mill. Let’s take a look at reporting and commentary from the host nation – Germany – to see what wrinkles and unique aspects of the summit are presented there. (more…)

Today is “Holland Day”! (To read why, see my previous post for today, below.) And this time I have a fairly serious subject to treat, namely the seeming determination on the part of highest Dutch government officials that the Stability and Growth Pact (hereafter just “Stability Pact”), which was added to European law in 1997 and whose key provision is that governments are not allowed to run budget deficits of more than 3% of their GDP, be enforced. When governments violate this rule, they’re supposed to be fined millions of euros by the European Commission; Germany and France are about to violate it for the third year in a row (Italy is also apparently a violator), and, as we’ll see, the Dutch together with some of their friends within the EU want to see those fines applied, even if it happens to be the two most influential countries against which that would happen, the very “motor” of EU development. (more…)

The votes are in, the Swedish people have spoken: 56% of the voters said “No,” and so they prevail, for a while at least.

I had hoped to find something interesting to tell you about the referendum’s result in the national press of Germany: the nation that, after all, was once the guiding power behind the idea of one single currency for all of the EU, yet which now, by its misbehavior in getting its own fiscal house in order and staying under the 3%-of-GDP limit for government budget deficits, is quite possibly driving away those EU members (such as Sweden) who do not use the euro but are/were contemplating that. But the on-line German newspapers that I’ve looked at for today aren’t very on-the-ball: they’ll tell you little else than what you already will have been able to find out from your own newspaper of choice (with one exception, noted below). OK, they quote Bundeskanzler Schröder lamenting the continued absence of Sweden from the ranks of EU countries using the euro. Well, he would lament, wouldn’t he? I’d definitely file that bit of news under “dog-bites-man.” (more…)

That’s the title of an interesting commentary piece in the latest Die Zeit by Uwe Jean Heuser – a remarkable mea culpa for Germany from a German writer, which puts into stark relief the striking (if rather unfortunate) ironies attending the birth of the Euro and the current state of finances in Euroland (that is, in those twelve-out-of-fifteen EU countries that have adopted it as their common currency). (more…)

It’s July 1, so the half-yearly presidency of the European Union changes hands again (for possibly the second-to-the-last time, if the EU Constitution, which changes this system, is ratified within the first half of 2004 as planned). Good-bye to Greece; ciao to Italy, specifically to Silvio Berlusconi, the Italian prime minster. (more…)

Sorry, today I’m not going to cover the G8 summit on Lake Geneva, at Evian. From the press coverage you indeed get the impression, as Elisabeth Bumiller of the New York Times (registration required) puts it, of “a messy family reunion,” where the main thing people are interested in is who avoids whom, who smiles at whom, who shakes whose hand and how enthusiastically, etc. This even in the German press, as in Die Welt’s Versöhnlicher Handschlag (“handshake of forgiveness”), or the FT Deutschland’s Bush schenkt Schröder drei Minuten (“Bush grants three minutes to Schröder”). Then, on the other side of the police barricades, you just have whatever credibility the arguments of the “anti-globalists” retain being trashed along with the cars and shop-windows that are the target of that minority of demonstrators who see the occasion as another chance to have some violent fun and quite likely get away with it, since the police can’t bash or arrest them all.

Apparently the summit continues on into today, so the press coverage will likely merit a better look later on. German Chancellor Gerhard Schröder didn’t even make it out to the lake until late last night, but he had a good excuse: He was busy at a special congress of his Social Democratic Party (SPD), gaining party approval for an ambitious program of retrenchment of Germany’s welfare state that he calls “Agenda 2010.” That, as even the Guardian points out in today’s leader, is the sort of major development that merits attention. (more…)