The European Foundation Intelligence Digest November/December

I. Europe’s new President

Czechs to invite US President to EU summit
There has been an outpouring of Obamania in the European press. The American President-elect’s every move is reported in the papers; European politicians compete with one another to express their delight at his election; everyone is talking of a new era in trans-Atlantic relations. The Bush years, indeed, have been very difficult for the EU’s fundamentally pro-American elite. They have wanted to have friendly relations with Washington but even they found George W. Bush too much to stomach, and in any case they knew he was hated by their electorates (and by the American electorate too). Now that is all in the past and America can once again stand for all the values the EU leaders hold dear – youth, progress, even ethnic diversity.

For example, the Czech government has indicated that it will invite President Barack Obama to the EU summit in Prague at the beginning of April. [Der Standard, 13 November 2008] This invitation follows an invitation, issued before the election, to the future American President to address the European Parliament. The EU summit takes place one day before a NATO summit in Strasbourg and Baden-Baden and Obama will presumably be attending that. The Czechs are also planning to use the EU summit for meetings with six Eastern neighbours of the EU – Ukraine, Moldova, Georgia, Armenia, Azerbaijan and even Belarus. The purpose of these invitations, which is an initiative of Sweden and Poland, is to reduce yet further the importance of France’s Mediterranean initiative by beefing up the current fledgling arrangements with these states. The big absentee in this list is obviously Russia, even though it is a direct geographical neighbour of the EU (unlike the Caucasus states) and even though it is (also unlike them) an unquestionably European country.

US to participate in EU foreign policy
The US government has announced that it will participate in the EULEX mission which has set itself up to govern Kosovo. EULEX’s presence in Kosovo is contested by the Serbian government, which does not recognise the independence of its Southern territory and which insists that only the United Nations has the legal right to administer it. Now the Americans have said that they will participate in this, one of the main initiatives taken under the auspices of the EU’s common foreign and security policy. Some 80 American policemen, and eight judges and prosecutors, will assist the 1,900 administrators from the 27 EU states. The US has said that it too has an interest in “the development of democratic standards in Kosovo” – the official line of both Brussels and Washington, even though experts agree that the human rights situation in the province has been catastrophic, and getting worse, for many years now since the province was wrested from Belgrade’s control in 1999. The situation with ethnic minorities is particularly shocking. [Handelsblatt, 22 October 2008]

Berlusconi calls Obama “tanned”
Not all European politicians have joined in the Obamania unequivocally. The irrepressible Italian Prime Minister, Silvio Berlusconi, has once again caused outrage in Italy and the rest of Europe by referring to Obama as “tanned”. Speaking in Moscow, where he had met the Russian President, Dmitri Medvedev, Berlusconi was asked whether he thought the new American President would be able to work well with his Russian counterpart. Berlusconi replied, “Well, he is young, handsome… ” - here he paused and smiled so that the joke would be understood – “and tanned, so I am sure that he a good cooperation will be able to develop.” [www.youtube.com] Medvedev joined in the joke, as did the journalists in the room, but numerous politicians in Italy have expressed outrage at the remark, which they have dismissed as another “gaffe” by the colourful Prime Minister.

One person who says she was very shocked at Berlusconi’s remark is Carla Bruni-Sarkozy, the wife of the French President. Madame Sarkozy has only recently become a French citizen: following her marriage to the President, she abandoned the Italian passport with which she was born. Following Berlusconi’s remark, she said that she was very glad that she was no longer an Italian citizen, a comment which itself elicited a sharp rebuke from the former President of Italy, Francesco Cossiga, who retorted that that the Italians were delighted too that Carla Bruni was no longer one of them: she recently intervened with her husband to prevent the extradition to Italy of a former Red Brigade terrorist, Marina Petrella, wanted in Italy for the murder of a policeman. “Who knows?” Cossiga mused, referring to Bruni’s notorious sexual adventurousness, “with her eventful life, Carla Bruni might one day be forced to ask for her Italian citizenship back again.” [Le Figaro, 12 November 2008]

II. Pipeline politics and the relationship with Russia

Nabucco project on verge of collapse
Europe has been seeking to reduce its dependency on Russian gas pipelines by building yet another pipeline which bypasses the territory of its biggest supplier and transports gas from Central Asia via Turkey. This is known as the Nabucco pipelines – but it is on the verge of collapse. Kazakhstan and Azerbaijan have showed little interest in cooperating with the West on the project and that is why it is unlikely to get anywhere. The German Chancellor, Angela Merkel, has recently been trying to woo the President of Turkmenistan, one of the other supplier countries on the Caspian Sea, but with little success. While the EU is trying to set up a consortium of European buyers in order to strengthen Europe’s market power, Russia has instead negotiated agreements with the Caspian states to buy gas directly from them and then ship it to Europe through its own networks. Gazprom, for instance, has offered to buy the whole of Azerbaijan’s gas production and it seems that Baku is ready to accept the deal. Naturally, the events in the Caucasus over the summer have shown that American influence in the region is in fact a chimera and that only Moscow can protect the security of the pipelines. Azerbaijan does not apparently intend to supply any further Western pipelines which bypass Russia (there are currently two). Kazakh government sources (the economics minister) have also told Western newspapers (the Handelsblatt) that they are under great pressure from Moscow not to supply gas for the Nabucco pipeline. The same goes for Turkmenistan, where the EU energy commissar (a Lithuanian) was recently rebuffed in his request for Turkmen gas for Nabucco. The only way of making the gas pipeline viable is therefore now for Iran to supply it, but that is considered political undesirable. There are also problems within the Nabucco consortium itself. The Turkish gas company Botas, which is part of the Austrian-led consortium, does not want Turkey to be a mere transit country: it wants 15 per cent of the gas for itself, and it wants it at a special low price. Given the pipeline’s capacity, this represents some 4.5 billion cubic metres a year, two thirds of which Ankara will use and one third of which it will sell. Naturally, the other members of the consortium are not happy with this proposal, since it means they would have to subsidise the special Turkish prices. According to the Hungarian Nabucco delegate, the whole project would be simply unviable under such circumstances. The same EU energy commissar, the hapless Mr Piebalgs, also recently failed to persuade the Turks to change their minds on this. [Matthias Brüggmann & Gerd Höhler, Handelsblatt, 12 November 2008]

Baltic pipeline in question too
Russia has now also called into question the construction of the trans-Baltic pipeline which is supposed to bring gas directly from Russia to Germany by passing under the Baltic Sea. The Russian PrimeMinister, Vladimir Putin, has said that Europe must decide first whether it really needs as much gas as Russia can deliver through the pipeline. If it does not, he said, “Then we will not build the pipeline”. Russia, he said, would not force the decision. “We do not need these pipeline as much as Europe does,” said Putin. Moscow could just as easily convert the gas into liquid and transport it by tanker. The plan is for a 1,200 km pipeline to take gas from the Russian city of Vyborg to Greifswald in Germany. The plan is for the pipeline to deliver 27.5 billion cubic metres of gas by 2011. The plan was initially mooted by Putin himself when he was President, and the consortium is currently chaired by the former German Chancellor, Gerhard Schröder. Putin said that the tanker option would make the gas more expensive and that the two sides had to come to a common conclusion on the basis of responsible discussions about the best way to ensure Europe’s “energy security”. [Sonja Zekri, Süddeutsche Zeitung, 13 November 2008]

EU pumps money into Georgia
The EU’s bad relations with Russia are perhaps explained by the fact that the EU has rushed to pour money and troops into Georgia, whose President the Russian President has accused of being a war criminal following the attack on South Ossetia in August. At the end of October, a donor conference was held in Brussels at which 2.8 billion euros in state aid was pledged to Georgia. Never mind that the country has been awash with Western aid since the collapse of the Soviet Union and that much of it has been stolen while the victims of the country’s various wars languish in poverty.
Most of the money came from EU states and $1 billion came from the US. The EU foreign affairs commissar, Benita Ferrero-Waldner, said that these pledges were a “sign of true solidarity with Georgia”. Germany promised 34 million euros for 2008 and 2009, which will come from the existing aid budget. The total amount pledged exceeds the 2.7 billion euros which the World Bank has said is needed in Georgia. Mrs Ferrero-Waldner also said – and this is obviously the key – that the aid money should also be spent on the “reform process”, i.e. that it is not humanitarian aid at all but instead that it is money being spent for political purposes. [Frankfurter Allgemeine Zeitung, 22 October 2008]

Another reason why the EU is so keen to give money to Georgia is that it has deployed a military patrol there, thereby beefing up its foreign and security policy (rather as in the Balkans, where it has also constituted mini-colonies). Troops wearing EU armbands now patrol the border between South Ossetia and Georgia, in order especially to observe the Russian troop presence. The mutual suspicion with which the EU observers and the Russian soldiers regard each other is an eloquent symbol for the state of relations between the EU and its Eastern neighbour.

Two Belgian MPs accuse Georgia of war crimes
Before the BBC Newsnight programme raised the issue, two Belgian parliamentarians accused the Georgian President, Mikheil Saakashvili, of “war crimes” during the invasion of South Ossetia he organised in August. An ecologist senator, Josy Dubié, and his colleague Christine Defraigne, have called for an international enquiry into the matter, saying that they believe that war crimes were indeed committed by the Georgian forces. They made their statement after a five-day mission to South Ossetia. “We have concluded without any ambiguity that the Georgians were the aggressors,” they said. [Belga, 25 September 2008]

Ukraine closes down Russian TV
The Ukrainian authorities have banned the transmission of Russian TV channels which are allegedly not adapted to Ukrainian television. The ban took effect on 1 November. The Ukrainian state requires that all broadcasts be in the national language, Ukrainian, even though huge swathes of this historic Russian territory naturally speak Russian. The Russian Foreign Minister has promised to work to restore what he called the rights of the Russian speakers in Ukraine. The ban is the latest in a long series of problems which have bedevilled the relationship between Kiev and Moscow. Some circles in Russia are calling for the reclamation of the Crimea, a predominantly Russian-speaking part of the old Soviet Socialist Republic of Ukraine which was transferred from the Soviet Russian Federation to Soviet Ukraine by Nikita Khruschev in 1954 – and where Russia’ Black Sea fleet continues to be housed. [RIA Novosti, 1 November 2005]

III. Other EU news

Eurozone in recession
A victim of the worldwide financial crisis, the euro zone has entered recession for the first time since it came into being in 1999.
According to Eurostat, the GDP of the euro zone countries shrank by 0.2 per cent in the third quarter of 2008 with respect to the same period in 2007. For the time being, this counts only “technically” as a recession because normally there has to be economic contraction for at least six months. In some countries, however, this is already the case: Germany and Italy contracted in both the second and third quarters of 2008. In Germany’s case, the figures are -0.5 per cent for the third quarter and –0.4 per cent for the second quarter. France and Spain are also contracting but only in the third quarter. The Netherlands has had zero growth for two consecutive quarters but the Dutch government thinks that the economy could well enter recession in 2009. Funnily enough, the EU as a whole is not in recession – no doubt because the noneuro countries are less badly off than the euro ones. The EU as a whole shrank by 0.2 per cent in the third quarter after zero growth in the second. [Le Monde, 14 November 2008; Eurostat http:// epp.eurostat.ec.europa.eu]

EU wastes billions
The yearly report on the activities of the European Union submitted by the Court of Accounts is the usual litany of complaints about the massive amount of money wasted and stolen from the EU’s vast budget. There are also many mistakes, especially in the administration of the structural funds. Out of the 42 billion euros in the structural fund budget, some 11 per cent should not have been paid out. Some of the mistakes are relatively harmless – people who have received EU subsidies without having filled in the forms properly. Others are more structural and therefore more serious: where the agricultural budget is concerned (51 billion euros a year) the Court of Accounts has again said that there is a “substantial level of mistakes”. Unreliable data about olive groves are one of the key areas which lead to excess payments. [Frankfurter Allgemeine Zeitung, 10 November 2008]

‘Joke’ earns man 100,000 euros from Brussels
A man who filed a joke application to create a ski slope on the Danish island of Bornholm was surprised when his application was accepted and he found 100,000 euros in his bank account. He used the money as required and built the ski slope but since the island is flat and known mainly for its sunny beaches, it has been used only for one and a half days since it was created in 2007. Ole Harild decided to make the application one year because he was cross that he and his girlfriend could not go ski-ing in the Alps. But he comments, “I never though that they would ever support anything so absurd.” This is just one example of the way in which structural funds are wasted. Other examples include the millions given to the renovation of a luxury hotel in Slovenia – on the basis that the structural funds are supposed to support tourism and that the hotel in question is a historical monument. [Christoph Schlitz, Die Welt, 21 October 2008]

Klaus annoys his Irish hosts
The President of the Czech Republic, Václav Klaus, has annoyed his Irish hosts during his recent state visit to the Republic of Ireland by attending a private dinner at the Shelburne Hotel in Dublin hosted by the anti-Lisbon campaigner, Declan Ganley. Ganley is determined to create a pan-European anti-Lisbon political party and his alliance and friendship with the French anti-EU campaigner, Philippe de Villiers, is for instance already quite advanced. Klaus was happy to accept an invitation to the dinner, which was attended by other anti-EU campaigners including Anthony Coughlan of Trinity College, Dublin. He was attacked for this the next day by the Irish Foreign Minister, Michael Martin, who described Klaus’ reported comments at the dinner as “inappropriate”. However, Dublin has made no official protest at this use of Mr Klaus’ free time.

In any case, it is quite possible that it will be the Czech Republic, and not just Ireland, which prevents the ratification of the Lisbon treaty. Klaus is certainly determined to do all he can to prevent its ratification. The Czech senate has already asked the Czech constitutional court to rule on ratification and this has already resulted in a delay. The way that Klaus might be able to engineer the end of Lisbon is by getting rid of the current Prime Minister, Mirek Topolánek. Topolánek recently led the ODS into severe defeat in regional elections and it is quite possible that he will be replaced as Prime Minister by a more pro-Klaus and anti-EU politician. [Der Standard, 7 November 2008]

Köhler approves Lisbon
The President of the Federal Republic of Germany, Horst Köhler, has said that he approves of the content of the Lisbon treaty, even though there are currently several appeals against it before the German federal constitutional court. (These have been lodged both by conservative anti-EU campaigners and by the new left-wing political party led by Oskar Lafontaine, Die Linke.) Normal constitutional etiquette requires that the Federal President await the ruling of the court before signing the treaty – this is what happened with Maastricht and the European Constitution, which Germany never ratified. Indeed, he will also wait until the court rules on Lisbon before formally signing it, and there is almost no chance that this will occur this year. Nonetheless, the Presidential spokesman said that the President had studied the treaty very thoroughly and that he saw no serious constitutional implications. The purpose of this statement is obviously to influence the court itself, which will now have to take into account the approval of both houses of the German parliament and now the federal President himself. Köhler has already spoken of Germany’s “responsibility to lead in Europe”. (The text of his address on the day of German unity [3 October] this year was wrongly translated on the Presidential web site: unsere Führungsverantwortung in Europa does not mean “providing responsible leadership” as the web site says [www.bundespraesident.de].) No doubt he means that this leadership should apply to the Lisbon treaty too, which was of course an invention of the German Chancellor, Angela Merkel. [Frankfurter Allgemeine Zeitung, 8 October 2008]

Euro even more unpopular in Scandinavia
Leading politicians in Denmark and Sweden have used the financial crisis as an excuse for starting a new campaign in favour of the euro. Public opinion, however, is unimpressed and the single currency remains as unpopular as before. More people remain opposed to abolishing the national currencies in both countries than those who support this. Both countries would need to have a referendum before adopting the euro; neither country now seems likely to hold one. In Denmark the polls show 42 per cent against the euro and 40 per cent in favour but that is not enough for the government to win a referendum, at least according to the current Prime Minister, Anders Fogh Rasmussen, who is trying to hold out the prospect of a new euro referendum by 2011. In Sweden the latest figures are 53 per cent against. (as opposed to 56 per cent when the Swedes voted against the euro in 2003). The reason for the continuing opposition to the euro is not difficult to discern: it is that Sweden and Denmark have continued to fare better outside the euro zone than inside it. [Helmut Steuer, Handelsblatt, 12 November 2008]

EU fights pirates
The European Union is sending soldiers and battleships to try to fight pirates off the coast of Somalia. The decision to deploy these armed forces was taken by the EU foreign ministers at a meeting in Brussels on 10th November 2008. The operation goes by the name of “Operation Atlanta” and it is to start in the middle of December with the deployment of one frigate. “Operation Atlanta” will start in mid-December. Germany will send one frigate. The total deployment will be of between five and seven frigates and several sea-reconnaissance aircraft. Nine European countries have said that they will participate: they include the United Kingdom, France, Spain and Germany. The intention is not only to fight the pirates but also to prosecute them as criminals. The deployment is in reaction to a sharp increase in attacks by pirates against cargo ships trying to dock at Mogadishu. The EU has decided that force should be used if necessary. The force is to be under the command of a British admiral. NATO ships are already patrolling the coast off the Horn of Africa and the EU wants to demonstrate that it can cooperate with the alliance. [Frankfurter Allgemeine Zeitung, 10 November 2008]

Berlusconi calls for quick accession of Turkey
The Italian Prime Minister has said that he is in favour of Turkey quickly becoming a member of the European Union. Turkey, Berlusconi said, was a member of NATO and played a “very important role” in the Middle East. For this reason, the accession of Turkey was in the EU’s own interests, he claimed. He was speaking after a meeting in Izmir with the Turkish Prime Minister, Recep Tayyip Erdogan, and he said that the process by which states become EU members needed to be speeded up. He added that the two next holders of the EU presidency, the Czech Republic and Sweden, were supporters of Turkish accession and that they too would want to make quick progress. So far, Turkey has closed 8 out of the 35 so-called “chapters” of the EU accession process: the pace is very slow, since the talks have been going on since 2005. The talks are currently stalled over Cyprus. Ankara however remains determined to become a member of the EU by 2013. [Der Standard, 13 November 2008]

Hungary “like a third world country”
All of Europe has suffered in the financial crisis but no country more so than Hungary, which has been forced to the International Monetary Fund for a bailout. Normally this is something one associated with Third World states, not members of the European Union. The recourse to the IMF is very humiliating for the Hungarian government, not least because only two weeks beforehand the head of the Hungarian national bank was saying that the country did not need any special credit lines from anyone. More importantly, in a recent advertising campaign, he government of Ferenc Gyurcsány boasted of the country’s strong economy. (Gyurcsány famously boasted in 2006, albeit in private, that he and his colleagues had lied brazenly about the state of the economy in order to get re-elected.) Now Hungary has taken 20 billion euros in credit from the European Central Bank, the World Bank and the IMF, and the country is facing a severe recession. Salaries will be frozen or even cut; pensions will be slashed. Thus will the conditions be fulfilled which the IMF has attached to its loan. [Reinhard Olt, Frankfurter Allgemeine Zeitung, 30 October 2008]

Switzerland rejects Kosovo envoy
The Swiss government has informed Kosovo that its newly appointed ambassador is not welcome. Mr Naim Mala is one of ten envoys sent to European states after they recognized Kosovo’s independence but he has been rejected by the Swiss authorities because he has a police record in the country, i.e. because he is a criminal. [Focus Magazine, 25 September 2008]

The race for jobs in Brussels
A dozen top jobs are up for grabs in Brussels as Commission President José Manuel Barroso prepares to appoint new people at the head of the European Commission. The Germans feel that they are short-changed and that they do not get enough of these top posts. (The nationality of the commissars themselves is regulated by treaty; the same is not true for all the other jobs in the Brussels bureaucracy.) Chancellor Merkel has made it clear that she wants this to change. For instance, she has told her colleagues that she wants the next General Director of the Environment Directorate to be a German. But the Germans have a funny way of going about it: two Germans have applied for the job, whereas the British and the French, when they want one of their nationals to get a post, generally support only one candidate who is in turn supported by all sides of the political spectrum. Not so the Germans, whose government is itself composed of two opposing parties in coalition for the time being but in fact both looking to the next elections in 2009. Worse for this particular job, neither of the two German applicants has much experience in environmental policy. And worse still, the commissar, Stavros Dimas (Greece) does not want either of them. As a result, the Germans are convinced that their influence over the Commission is quite inadequate, particularly in comparison with … that of the British. This is in spite of the fact that no fewer than seven directors-general are Germans, more than any other member state. The Germans argue that their jobs have little influence, however – even though the holders of them are paid 16,000 euros a month – since they involve things like humanitarian aid or research. At director level, there are 29 Germans against 39 Brits and 34 French. There are 24 Germans as political advisers in the cabinets of commissars but not in the important ones like energy, the economy and consumer protection. It is only over foreign policy (especially enlargement) that the Germans feel they have the clout they deserve. [Christoph B. Schiltz, Die Welt, 13 November 2008]