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Over and done with - At last

European Policy Centre

Date: 22/10/2007

EU leaders breathed a collective sigh of relief when they struck a deal on the new Treaty at the October informal European Council - and immediately switched their focus to policy issues with a debate on globalisation. The EPC analysis argues that, amid all the talk of “moving on” from this painful chapter in the EU’s history, this summit may mark the end of an entire phase of the European integration process in which progress has chiefly been made through institutional ‘giant leaps forward’.

As the champagne flowed in the early hours of the morning after the conclusion of the negotiations on a new EU treaty to replace the ill-fated Constitution, EU leaders breathed an almost audible collective sigh of relief.

The deal brokered by the Portuguese Presidency brought an end to an institutional reform process which began shortly before the June European Council and continued in the Intergovernmental Conference (IGC) of the past three months, with a series of compromises on the last outstanding issues.

The new Treaty, which amends both the Treaty on European Union (TEU) and the Treaty on the European Community (TEC), will be officially signed on 13 December in the Portuguese capital just before the ordinary European Council in Brussels that concludes its term. This will crown Portugal’s ambition to follow its success in masterminding the 2000 Lisbon Agenda during its last Presidency with the delivery of a new ‘Treaty of Lisbon’ this time around.

However, this may not be the end of the story - yet. For all the talk of an “historic” agreement at the informal summit, and the emphasis on “moving on” from this painful chapter in the EU’s history, the new Treaty still has to be ratified in all 27 EU Member States before it can enter into force on 1 January 2009.

Although previous experience shows that this is not a foregone conclusion, EU leaders appear determined to go for a speedy parliamentary approval wherever possible. Indeed, the January 2009 deadline set for completing the process - which came as something of a surprise after all the previous talk of an effective June 2009 deadline to coincide with the European elections - demonstrated a shared willingness to concentrate minds by squeezing the process into one year.

So far, only Ireland - which is obliged by its constitution to do so - will definitely hold a referendum on the new Treaty. Denmark - which requires a 5/6 vote in favour to approve the Treaty through parliament if it involves a hand-over of sovereignty as defined by the country’s constitution, or a simple majority if not - is still wavering, although Prime Minister Anders Fogh Rasmussen seems determined not to submit the issue to a popular vote this time.

Of the two ‘Nay-Sayers’ of 2005, France will certainly proceed though the National Assembly and the Netherlands is very likely to follow suit. The UK is the only other country seen as posing a threat to the goal of ratification through parliaments, although new Prime Minister Gordon Brown is standing firm in the face of heavy pressure from the Conservative opposition and much of the media to call a referendum.

Terms of agreement

The Portuguese Presidency handled the very last stage of the negotiations quite cleverly. Following the publication of the draft text of the Reform Treaty (as revised by the EU legal experts) on 5 October, very few contentious issues remained open. Some were solved in the run-up to the Summit and the rest were settled on Thursday evening, after the Presidency announced that the first session of the European Council would be entirely devoted to the IGC and last as long as it took to reach a deal.

This helped concentrate EU leaders’ minds, while a package of balanced concessions helped smooth the path towards the final agreement. As a result:

  • Austria obtained a five-year suspension of any infringement proceedings by the European Commission over the application of quotas for foreign students at its medical schools.
  • Bulgaria won the right to call the EU single currency “evro” (rather than euro, as the European Central Bank had insisted) in its Cyrillic alphabet.
  • Italy was granted an extra seat in the 2009-2014 European Parliament, thus equalling the UK at 73 but remaining one behind France. To maintain the previous commitment to have just 750 MEPs overall, the President will not be counted in the total.
  • Poland’s demand for the ‘Ioannina compromise’ to be anchored in the Treaty was indirectly satisfied - it remains a non-binding Declaration, but a special Protocol now states that it can be changed only “by consensus”. It does not specify the length of the “reasonable time” a decision can be delayed by a qualified minority.$Poland was also given the same right as Germany, France, the UK, Italy and Spain to have a permanent Advocate-General in the European Court of Justice (ECJ), with the overall number raised from eight to 11.
  • The European Parliament obtained an ad hoc Declaration concerning the possible temporary appointment of the High Representative of the Union for Foreign Affairs and Security Policy - from January 2009 until the current Commission’s term ends in the autumn - with the promise of “appropriate contacts” on the candidate chosen by Heads of State and Government for the post.

While some of these issues were of limited scope and never looked likely to derail the conclusion of the IGC, those raised by Italy and Poland were potentially more dangerous.

Italy’s dilemma

The Italian government found itself in a particularly difficult position. Just a few days before the Summit, the European Parliament had approved (by a majority) a new distribution of the seats in the assembly which the Italian Senate attacked, in a resolution supported by an overwhelming majority, for penalising the country disproportionately.

The proposed new share-out had been masterminded by French MEP Alain Lamassoure on the basis of recent Eurostat data on the number of ‘residents’ in each Member State - a definition (or status) that is applied differently in each country, and on which the data are not always entirely reliable. On that basis - and in the context of a broader reallocation of seats that compensated, in particular, Spain - France ended up with 74 seats, the UK with 73 and Italy with 72 (they currently have 78 each). The difference was largely symbolic, of course, but that was precisely the point.

On the one hand, relatively minor differences in the ‘resident’ population of the three countries translated into a differential in seats that seemed to highlight a political hierarchy (or it was perceived that way): there are even more significant differences in the ‘resident’ population within other groups of countries, but these groups still kept an equal number of MEPs. In other words, two opposite political logics seemed to be applied to different groups of countries of roughly the same size.

On the other hand, the new Treaty (following on the previous Constitutional Treaty) establishes that the European Parliament represents the EU ‘citizens’. The available data on citizenship suggests this would produce an entirely different picture, especially among the three big countries concerned and, more generally, regarding those EU Member States with a large ‘diaspora’ (e.g. Greece, Ireland, Poland, and Portugal). Some Italian MEPs went so far as to point out that the ‘residence’ principle factors in millions of immigrants who are not ‘citizens’ and do not vote in European elections anyway.

This means that the new allocation of seats will only apply to the 2009-2014 assembly, as the following one (provided the new Treaty is ratified) will have to be reorganised on the basis of a completely different principle. Still, the Italian argument that the new share-out of seats should take into account what Member States had just agreed on in the new Treaty - i.e. actual ‘citizenship’ rather than ‘residence’ - was legally unjustified and therefore politically untenable.

As a result, the Prodi government was caught in a grave political dilemma: in an EU in which the overt defence of ‘national interests’ and ‘red lines’ is increasingly the rule, Italy did not want to appear as the only one to sacrifice them for nothing, especially when confronted with what it considered an ‘unfair’ decision. Moreover, in a country fraught with extreme internal political fragmentation and litigiousness, this was a point on which a rare bipartisan consensus had formed, backed up by massive media support.

At the same time, Mr Prodi did not want to seen as fighting a purely ‘national’ battle or to threaten a veto that risked derailing the painfully negotiated deal on the new Treaty. Both the instrument (the veto being a quintessential manifestation of conduct that Italian federalists have always condemned) and its possible repercussions, in other words, would have created an unsustainable situation for the Italian government, which insisted until the last minute on ‘decoupling’ the approval of the new Treaty from the decision on the European Parliament and postponing the latter.

The Portuguese Presidency’s determination to get a comprehensive deal in Lisbon, however, made it possible to make Italy an offer it could not refuse and allowed all sides to save face. The extra seat enabled Rome to declare victory (or avoid defeat), while the exclusion of the President from the 750 total enabled everyone to maintain that the agreed ceiling had been preserved.

In a few years, the allocation of seats will have to be revised anyway - if and when Croatia joins the EU, for instance, and if and when the ‘citizenship’ principle is applied. Appropriate rules will have to be set to this end, in view also of the new ‘double majority’ rule for voting in the Council that takes into account the Member States’ population.

Poland’s gamble

Ever since the opening of the IGC in July, the biggest uncertainty was how far the Polish government would go to obtain more concessions. This cast doubt over the likelihood of a deal in Lisbon, and the uncertainty grew after the Sejm voted in late July to hold snap parliamentary elections on 21 October; i.e. in the immediate aftermath of the informal EU summit.

After the drama of the June European Council, the fear was that the Kaczynski brothers would exploit the occasion to maximise their visibility and play the ‘national’ card in order to win extra support at home. This did not happen, although the Polish electoral campaign was used implicitly to pile on the pressure and extract further concessions from EU partners (a tactic which was certainly not invented by Poland).

This time round, however, the Kaczynskis refrained from intemperate attacks on Germany of the type which soured the atmosphere in June, and kept their language and tactics within acceptable limits - although they could not resist the temptation to criticise the Charter of Fundamental Rights as too liberal and to veto a Council proposal to establish a European Day against the death penalty, claiming that the defence of “life” also implied condemning abortion and euthanasia.

At any rate, their request for equal treatment with the other bigger EU countries regarding the Advocates-General in the ECJ was entirely legitimate, and has been met. Even on the Ioannina issue, the final agreement seems reasonable and workable after all, not least because the initial Polish demand for the reference to searching for a consensus “within reasonable time” to be translated into a specific timeframe was not met.

To understand why this issue eventually lost salience, it is important to recognise that its implementation could also turn to the advantage of other big Member States: indeed, the Ioannina compromise was initially introduced in 1994 mainly as a concession to Spain and the UK, and now Germany is the country that could benefit from it the most.

Whether all this helped the Kaczynskis domestically remains a moot point. During the election campaign, they were sharply criticised, especially by the liberal opposition (Civic Platform) led by Donald Tusk, for having isolated Poland from the EU ‘mainstream’ and for unnecessarily antagonising Russia. Tusk’s triumph and the defeat of Jaroslaw Kaczynski’s Law and Justice Party in the 21 October elections - coupled with the exclusion from the Sejm of both his coalition partners, the League of Polish Families and Self-Defence - shows that the twins’ less assertive tactics in the final stages of the IGC were probably a typical case of ‘too little too late’.

As a result, Poland will now go through another period of ‘cohabitation’, this time between the populist President Lech Kaczynski and, in all likelihood, a moderate liberal-conservative coalition between Tusk’s Civic Platform and the Peasants’ Party. The new government is expected to play a more constructive role inside the EU and help defuse some tensions with Russia, by, for example, toning down the rhetoric on the thorny issue of meat exports (which can be solved at the technical level) and, possibly, by postponing any decision on missile defence - although this may come too late to have an impact on the EU-Russia summit scheduled for 26 October in Portugal.

Appointing the new EU ‘troika’

Having solved the Italian and Polish problems relatively smoothly, the Portuguese Presidency was forced to display some swift and nimble footwork to settle a last-minute dispute over the possible appointment of the new High Representative of the Union for Foreign Affairs and Security Policy in January 2009, as soon as the new Treaty enters into force (assuming, once again, a successful ratification process).

This issue was raised by the European Parliament representatives at the IGC, who insisted on two things: first, that they should be appropriately ‘consulted’ on the appointment of the new ‘double-hatted’ foreign policy chief, if that happens before the new Commission takes office in autumn 2009. Secondly, the appointment of the new Commission President (taking into account the outcome of the European elections) should be combined with that of the High Representative (who will also be one of the new Commission’s Vice-Presidents) and the new President of the European Council, also foreseen by the new Treaty.

This ran into fierce opposition from, among others, the Council Secretariat, which was determined to avoid giving the Parliament any say over the appointment of the European Council President, and to contain its role in the appointment of the new High Representative. As a result, the Presidency declared after the talks that the choice of the double-hatted High Representative would be subject to “appropriate contacts” (as distinct from “consultation”) with the Parliament - a form of words which is open to interpretation and suggests this argument is far from over.

It would indeed make more sense to try to reach a comprehensive ‘package deal’ on this new EU ‘troika’ in June 2009, taking into account a number of political realities: the outcome of the European Parliament elections and the need for some balance among the Member States; i.e. between big and small, old and new, North and South.

This could well transform the June 2009 into a sort of big horse-trading jamboree, with the media speculating for months over possible candidates and secret trade-offs, not least because other plum jobs will also be up for grabs by then. The President of the European Parliament itself, to start with, but also the new Director of the London-based European Bank for Reconstruction and Development (EBRD), a post currently held by a Frenchman. In addition, Pascal Lamy’s mandate as head of the World Trade Organisation is due to expire at roughly the same time.

In other words, it will be difficult enough to accommodate the demands and ambitions of all 27 Member States - but at least trying to do this in one go, through a comprehensive agreement guided by some shared criteria, might prove to be easier (and fairer) than a separate negotiation on each and every post.

However, France is understood to be keen to cap its EU Presidency in the second half of 2008 by completing the Treaty ratification process, putting in place the first transitional measures and getting agreement on at least some of these first holders of the newly-created posts.

That could explain why the argument over the appointment of the new High Representative suddenly became important in Lisbon, with both France and the UK apparently keen to assert the Council’s role in this process by appointing the new ‘double-hatted’ High Representative from January 2009, even though the mandates of both Javier Solana and the current Commission are not due to expire until autumn 2009.

Their hurry may or may not also conceal an interest in appointing specific individuals to the job (and in doing so before and outside an overall ‘package deal’). The Parliament’s pre-emptive strike, demanding the right to be ‘consulted’ on the choice of the new High Representative (as it will be on all other members of the 2009-2014 Commission) produced the somewhat fuzzy final formulation - referring to “appropriate contacts” - which may well lead to a temporary appointment, thus postponing the real choice until June 2009.

This has not stopped EU leaders floating possible candidates for all three top EU jobs, much to the delight of the media. However, it also risks ‘burning’ good candidates well before time.

Nevertheless, personalities will undoubtedly matter, as the boundaries between the precise competences of the European Council President, the Commission President and the High Representative/Vice-President are anything but clear in the new Treaty. Grey areas and potentially overlapping spheres of action abound, in fact, and the way in which each and every member of the new troika interprets and plays his or her role will contribute to establishing precedents and habits for the future.

The hope is that political expediency does not prevail over policy experience, and that an acceptable balance is struck not only between EU party ‘families’ and among Member States, but also between legitimate personal ambitions and overarching European interests.

Never again?

As soon as the final deal on the new Treaty was struck, the informal European Council moved quickly on to the next item on the agenda: the EU’s response to the challenges of globalisation. No decisions were expected - or taken - in this area, but the Portuguese Presidency’s intention was clear: to demonstrate that with the long institutional deadlock broken, it was time to concentrate on the issues of substance that are high on the agenda of officials and citizens alike.

This rapid shift in the Lisbon discussion - away from institutions and into policies - heralds a similar shift in focus at the EU level in the months to come. If no unexpected obstacles appear on the treaty ratification path (and it is a big ‘if’), attention will turn to concentrating the minds of both political leaders and citizens on concrete issues rather than symbolic ones.

This was the clear message from most EU leaders at their final press conferences at the conclusion of the informal European Council. Commission President José Manuel Barroso summed up the mood when he said that it was “time to move on”.

Indeed, this informal summit may have marked the end of an entire phase of the European integration process which started with the Single European Act and the Maastricht Treaty in the late Eighties and early Nineties.

It has been a phase characterised by efforts to push integration further mainly through successive reforms of the treaties setting ever more ambitious goals: institutional ‘giant leaps forward’ became the main tool for bringing about the ‘ever closer Union’ imagined by the founding fathers.

After encountering growing difficulties throughout the Nineties - neither the Amsterdam nor Nice negotiations proved very successful - this culminated with the Laeken Declaration, the Convention on the Future of Europe and the drafting of the Constitutional Treaty, before it was sunk by French and Dutch voters in the spring of 2005.

The new Treaty agreed in Lisbon represents, arguably, the best possible institutional deal that could have been reached in the current circumstances. Notably, it does not include any ‘rendez-vous’ clause - unlike the previous Treaties - for reviewing its provisions, and it is likely to regulate EU affairs for some time to come. Portuguese Prime Minister Jose Socrates said after the Summit that he hoped the new Treaty would have “a very long life-expectancy” and said it was clear that no one wanted institutional issues to be discussed by the committee of wise men which will be appointed at the December European Council to consider ‘Europe in 2030’.

The fact is that the Union has grown ever wider - not just in terms of membership but also of policies: suffice it to think of justice and home affairs, environment, international crisis management and, now, energy. It has also grown ever more diverse - once again in terms of both membership and policies.

For decades, in fact, European integration had advanced through the expansion (gradual and progressive, with occasional hiccups) of the so-called ‘community method’. Now, different modes - rather than models - of policy coordination and integration coexist and interact, sometimes even within the same area: from benchmarking and best practice to partial pooling of sovereignty; from the creation of voluntary codes of conduct to ever-more complex opt-in/opt-out arrangements, such as those adopted in Lisbon for the UK (and, to some extent, Ireland).

Does all this mean that there will be no more treaty changes for the foreseeable future? Of course not, but institutional reforms - as and when needed - will probably follow a different pattern.

On the one hand, they are likely to be put in place whenever new members join the ‘EU club’, starting with Croatia, whose Accession Treaty is already expected to address a number of ‘leftovers’ from the Reform Treaty itself. On the other, new policies and new ‘formats’ for existing policies are likely to be first tested and developed by a limited number of Member States (those willing and able to do so), then possibly incorporated in the Treaties - and possibly even ‘communitarised’ - at a later stage.

This is what happened with Schengen in the 1990s, and what is happening now with the Prüm Treaty. It is also the way in which ‘enhanced cooperation’ - as foreseen in the old and new treaties - and other forms of flexibility and variable geometry could be implemented in the future.

What is unlikely to happen - and that is why the 18-19 October Informal Summit may indeed mark the end of an era of European integration - is that EU leaders will agree to have ‘another go’ at the overall institutional design of the Union, triggered by a generic mandate for a new IGC.

The long crisis over the Constitutional Treaty and the secretive horse-trading that preceded the agreement on its successor have proved that: a) it is now not only extremely difficult to achieve unanimous consensus among a large number of Member States on far-reaching institutional reforms; but also that b) it is possible that reopening negotiations over the broader EU architecture could lead instead to ‘giant leaps backward’ in the integration process, as a side-effect of the emergence of populist and nationalist pressures inside some Member States. Hence the general willingness now to ‘move on’ and focus on policy delivery rather than institutional wrangling.

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