For much of its history the European Union has specialized in noisy, bitter divisions. But these were however resolved with last minute compromises hammered out overnight by politicians and officials. That’s why the question begs whether the latest angry EU summit, which began last night, is going to be yet another over-hyped bare-knuckle bust-up that ends in intricate compromises, smiles and back-slapping or is the EU at last facing some differences that it cannot paper over successfully as it did in the past? The summit was primarily intending to address the consequences of the “No” votes on the proposed new constitution from the French and Dutch referenda. President Chirac clearly seeking a diversion from his domestic political setback, demanded the end of the British contributions rebate. The British quickly counter-attacked saying the UK paid 2.5 times more than the French into the EU budget and insisting that the rebate was not up for discussion unless the Common Agricultural Policy (CAP) from which French farmers are significant beneficiaries, was also reformed. Not only would London veto any change to its rebate but it might also veto the new EU budget.
Meanwhile Germany and the Netherlands want their contributions cut and, think ending the UK rebate could help achieve this. The new entrants to the EU are, for their part, despairing at the divisions and beginning to worry that the anticipated benefits from CAP are not going to be diverted to them from France, Germany and Italy. In both Poland and Slovakia, politicians now wonder aloud how the EU accession of Bulgaria and Romania in 18 months will be afforded when hardly any of the hoped for financial flows have yet come to the Union’s newest members. It would seem that there are more angry, accusing fingers than usual pointing in many more different directions. London’s relaxed approach as it assumes the six-month EU presidency therefore seems a trifle misplaced. It rather seems as if the contradictory social and market-driven policies of the Franco-German and so-called Anglo-Saxon models are finally coming into real conflict. The British joined what was then the European Economic Community for economic reasons. The Franco-German axis that created the precursor of the EU, did so primarily for social reasons and for unity.
The British may seem to have the strongest political position, in that they appear to have the greater leverage. Their rebate is the price of economic and social reform opposed by Chirac. The irony is that Chirac lost the referendum because French citizens believed it would herald unwanted reform. Now that he has aligned himself with his people, Chirac’s domestic position is rapidly being restored. No way will he risk further unpopularity by caving in to British demands for CAP or any other budgetary change. Blair for his part has an electorate which believes the proposed EU constitution is all about social and political, and not realistic economic, change, and so will reject it, if it is ever consulted. In this confusion of voter expectations and summit-level stand-offs, it is easy to see negotiations plunging right through the night, but harder to see the shattered politicians emerge blinking into the morning with anything positive to announce.
