Wishful thinking?

16 December 2006

The European Council which concluded Finland’s EU Presidency on 14-15 December 2006 was one of the most uneventful and colourless of the past few years.

The really controversial issues on the agenda had either been settled in advance - most notably the decision to ‘freeze’ up to eight chapters in the accession negotiations with Turkey while keeping the process going; or passed on to the German Presidency - most notably, the future of the Constitutional Treaty.

Ergo, by the current standards, the summit was successful, at least by default: no crisis, no drama, no public clashes and no juicy anecdotes. So does this mean that the much-vaunted “Europe of results” is on track at last, as European Commission President José Manuel Barroso claimed triumphantly at the end of the summit?

What is unquestionable is that, after a very difficult 2005 marred by crises over the Constitutional Treaty and the Financial Perspectives for 2007-13, in 2006 the Union’s legislative work resumed effectively and delivered a number of results: the Inter-Institutional Agreement on the EU budget and the final deals on the Services and REACH Directives, the 7th Research & Development Framework Programme, the Global Adjustment Fund and the European Fundamental Rights Agency. Virtually all were prepared during Austria’s Presidency and finalised during Finland’s.

Furthermore, important decisions have been taken regarding Slovenia’s entry into the euro as well as Bulgaria’s and Romania’s accession to the EU, both from 1 January 2007 - although the latter was greeted with a degree of resignation linked to the actual readiness of the newcomers for membership.

Finally, significant progress has been made on extending the Schengen Information System to all the new Member States (in a year or so) and the management of the Union’s external borders - mainly through the Frontex agency and the possible establishment of a European Surveillance System for the southern maritime borders.

Yet other initiatives in important common policy areas - from energy to migration - are still at the stage of announcements, headings and blueprints - and no agreement has been reached on enforcing the so-called passerelle clause on Justice and Home Affairs issues, despite the efforts made by both the Commission and the Presidency.

On the one hand, mainly due to Germany’s stance, this issue has become part and parcel of the broader discussion over the future of the Constitutional Treaty. On the other, there is no mention of the latter whatsoever in the relevant paragraphs (18-20) of the Presidency Conclusions, which sound rather generic and allusive in speaking of “the options that have been presented” (an explicit reference to the Constitutional Treaty enshrined in a previous draft was deleted during the summit).

On the other big Justice and Home Affairs issue discussed at the summit - immigration - the Presidency Conclusions focus on the need for further work on developing a “Global Approach to Migration” and steps to “strengthen cooperation” between Member States in the fight against illegal immigration (with the Commission invited to table proposals to deal with illegal employment by April), as well as on the EU’s external border controls. Far less attention is devoted to legal migration and integration.

Overall, it seems fair to say that while the Union’s performance has certainly improved over the past year, there is still ample room for improvement. Moreover, the general mood across the EU remains somewhat bleak and some controversial issues have been set aside or just postponed.

Ever wider Union?

After the June 2006 European Council, it became evident that the second semester would be largely devoted to a broad reassessment of EU enlargement policy. The Commission had been mandated to produce a paper on the rather unfortunately termed concept of the Union’s “absorption capacity”; and a review of Croatia’s and Turkey’s progress one year after the opening of accession negotiations was also planned.

The paper delivered by the Commission in early November contributed significantly to putting the intra-EU debate on this issue on a clearer track.

First of all, it implicitly discarded the questionable notion of “absorption” (which appears only once in both the paper and the Presidency Conclusions from the summit) in favour of that of “integration capacity”.

Secondly, it defined the latter through a number of indicators - ranging from the institutional to the budgetary dimensions - but without creating a new stand-alone ‘criterion’ for admitting new members. Last but not least, it explicitly stated that no new accession is possible in the absence of “a new institutional arrangement” among the Member States on the most appropriate set-up for a Union of more than 27 partners.

Cleverly enough, the Commission paper did not mention the Constitutional Treaty as such and used, instead, more generic language. But the message was - and is - clear: no more accessions until some institutional reform is in place.

This may sound unfair, especially to Croatia, which seems already well advanced in its convergence efforts (and is, according to some, already on a par with Bulgaria and Romania) - and it probably is. On the other hand, Croatia has also received good news in that its negotiations with the EU are now clearly decoupled from Turkey’s and can therefore proceed more speedily and smoothly.

On the whole, the Commission paper helped to diffuse this potential explosive issue and offered a compromise approach that is balanced and acceptable to all sides within the Union.

As a result, its main points were incorporated into the Presidency Conclusions, which refer inter alia to the need for the EU institutions “to function effectively”, on the one hand, and on the other for negotiations with applicants to address “at an early stage � difficult issues such as administrative and judicial reforms and the fight against corruption” - seen as an indirect reference to the recent experience with Bulgaria and Romania - and to prepare “impact assessments” on a regular basis.

This new approach is summarised in the new formula for enlargement coined by President Barroso: the “three Cs”: Consolidation (of the latest entrants); Conditionality (strict criteria for all candidates); and Communication (with the European citizens about the merits of expansion).

Frozen Turkey?

The Commission has played a similarly positive role - alongside the Presidency - in handling and temporarily solving the mounting crisis over Turkey.

In this respect, it is worth noting that Finnish Foreign Minister Erkki Tuomoja’s personal engagement in this process, first in searching for a last-ditch compromise over Cyprus and then in forging an intra-EU consensus, and the excellent lines of communication with the (also Finnish) Enlargement Commissioner Olli Rehn, produced an effective concerted effort to finding an acceptable solution to an apparently intractable problem.

The partial and open-ended ‘freeze’ on trade-related chapters in the negotiations with Ankara - following Turkey’s failure to comply with the 2005 Protocol to the Custom Union - was proposed by the Commission in November, then agreed upon by the General Affairs and External Relations Council on 11 December, just a few days before the summit. In the end, all the EU’s current Member States accepted the compromise and this prevented a potentially disruptive confrontation at the European Council.

Despite the official rhetoric and public outrage in Ankara, this compromise may also be acceptable to Turkey, as it does not prejudge either decisions on opening other chapters or the future ‘unfreezing’ of those linked to the Cyprus issue, while fully preserving the initial legal framework. It could also allow Turkey’s political forces to concentrate entirely on the difficult domestic challenges ahead - including the presidential and parliamentary elections set for 2007 - without any external constraints or distractions.

Between Riga and Belgrade

The ‘enlargement semester’, so to speak, came to an end with a last-minute discussion at the summit over the exact wording of the Presidency Conclusions regarding the Western Balkans, especially Serbia.

Along with a general reaffirmation of the Union’s firm commitment to integrate the Western Balkan countries came some additional pressure from countries such as Italy, Hungary and Greece to revisit the decision taken last May by the EU to suspend negotiations with Belgrade on the Stabilisation and Association Agreement (SAA), following its lack of cooperation with the International Criminal Tribunal on former Yugoslavia (ICTY) in tracking down indicted war criminals Ratko Mladić and Radovan Karad�ić.

Such pressure was indirectly reinforced by NATO’s decision - taken last month in Riga - to open the doors of its Partnership for Peace programme (an antechamber to eventual membership of the Alliance) to a number of Balkan countries, including Serbia itself. NATO’s opening came as a partial surprise, as the Alliance - and the Americans in particular - had traditionally been very strict on the issue of indicted war criminals, for instance with Croatia over the capture of Ante Gotovina.

The discussion at the EU summit, however, was mainly about tactics and timing rather than strategy and substance.

Early parliamentary elections are taking place in Serbia on 21 January, and a majority in the EU prefer to delay any new possible opening to Belgrade until after the vote, not least in the hope of having new democratic interlocutors in office. Thus, the final wording of the Conclusions was only marginally improved: it now says that the EU is confident that “Serbia will be able to accelerate its preparations [instead of “to catch up rapidly with the other countries of the region”, as in the initial draft] on the road towards the EU once the SAA negotiations are resumed”.

Yet it is widely expected that the General Affairs and External Relations Council set for 22 January - the day after the elections - will review the situation, and that some move will be made by the EU shortly afterwards, possibly in connection with a likely move to address the highly sensitive issue of the final status of Kosovo.

And from Helsinki�

It is now customary, at the end of each Presidency, to give a general assessment of the performance of the country in charge. In doing this, it is only fair to try to separate those dossiers that pertain to the broader EU legislative agenda and policy machinery, which involve the Commission and the European Parliament as well, from those that, instead, emerge (often unexpectedly) during the term – the ‘wild cards’ which come mainly from outside of the Union.

In the first area, Finland has demonstrated professionalism and a steady hand. Some of the compromises might not have made everyone happy (as in the case of the Working Time Directive), but the overall conduct of EU affairs has been balanced and effective. Praise for this must, however, be shared with the other institutional players.

There is only one dossier, lying halfway between the internal and the external arenas, on which Finland has been seriously challenged during its tenure - relations with Russia.

This is a particularly thorny issue for both Finland itself - which has always had a peculiar relationship with its big Eastern neighbour - and for the Union at large, especially after its recent expansion to 25/27 members. During the past few months, Moscow has also become an ever more assertive interlocutor for the EU-25/27 on a number of issues, ranging from energy to trade, not to mention specific regional problems (Kosovo, Georgia, Iran).

The combination of a more divided Union - epitomised by the Polish veto on the mandate to be given to the Commission to negotiate the Partnership and Cooperation Agreement with Moscow - and a more assertive Russia has made it particularly difficult for Finland to act effectively as EU President.

What is more, the Finnish decision to invite President Putin to be the guest of honour at the Lahti European Council in October proved somewhat unhelpful: although no major incident occurred during the meeting, the Russian leader ended up stealing the show and made it virtually impossible for the Finns to give adequate emphasis to the issue they specifically wanted to address: economic innovation. That bit of the Finnish Presidency agenda, in fact, pretty much disappeared from the EU radar screens from then on, although there was a reference to its importance in the Presidency Conclusions from the December summit.

Among the other ‘wild cards’, the conflict between Israel and Hezbollah in South Lebanon needs to be recalled too. Despite the tensions of those weeks in early summer and the occasional displays of intra-EU differences over Middle East policy, it is fair to say that “Europe” came out of the crisis very well, increasing its engagement in the region - also militarily, although not with a specifically EU operation but in the framework of the existing United Nations mission - and showing the wider world that it is willing and able to shoulder its responsibility when push comes to shove.

In a broader perspective, at any rate, one can well argue that the 2006 Finnish Presidency has been a good one, although probably not as good as its previous (and first) one in 1999. The same applies, in many ways, to Austria’s tenure in the preceding six months.

Do we have a pattern here? It is very difficult to assess, as circumstances have changed markedly since 1998/99 inside as well as outside the EU.

Yet two observations deserve to be made in this respect. One is that the first (“maiden”) EU Presidency by a new Member State tends generally to be welcomed and supported by the older ones: nobody wants to give a newcomer too rough a ride, but everyone tends to behave more ‘normally’ second time around. The crucial test of this hypothesis will probably come in a year’s time, when Slovenia moves into the Presidency hot seat.

The second observation is that - ‘wild cards’ apart - it is becoming very complicated to run a Union with 25 (soon 27) different national agendas to combine and harmonise. EU business may, in other words, become ever harder to manage.

It is no coincidence that the major achievements of the past two Presidencies owe a lot to inter-institutional cooperation and convergence. Without a little help from the Commission and the Parliament, no single country - however big and resourceful - can probably count on a successful stint at the head of the enlarged Union.

� to Berlin - and beyond

The German Presidency (its 12th so far) starts with - à la Dickens - “great expectations”, especially with regard to the future of the Constitutional Treaty. In fact, the semester will probably be split in two distinct halves.

The first, up to the Spring European Council, will be primarily devoted to an issue - energy policy - which has climbed up the EU agenda over the past year and is particularly sensitive for Germany itself, for both EU-internal (market liberalisation) and external reasons (relations with Russia).

The second half will be largely dominated by the debate over European integration and the future of its institutions, starting with the celebrations of the 50th anniversary of the Treaty of Rome in late March (which are set to culminate with the ‘Berlin Declaration’) and continuing with the preparation of a “roadmap” for institutional reform to be presented at the June European Council.

The actual debate may start a bit earlier, however, as Spain and Luxembourg (the only two EU countries to have ratified the Constitutional Treaty by popular referendum) have announced a series of initiatives in the first months of 2007 to revive the spirit of the deal signed by the EU 25 in Rome in October 2004.

A first meeting of the 18 countries which have already ratified the text (16 current EU members plus Bulgaria and Romania) is set for 26 January in Madrid, with the aim of supporting Germany’s expected efforts to preserve the “substance” of the new Treaty.

However, this initiative and the broader EU debate will be heavily conditioned by the French presidential and parliamentary elections, with the last round set for early June, a few days before the summit. The timeframe available to try to forge a consensual approach among the 27 may be very short indeed, although Berlin will probably try to use the G8 summit in early June to ‘test’ a few ideas informally on some EU partners.

A further political unknown - or ‘wild card’ - is the expected change of occupant at No. 10 Downing Street in the late spring or early summer, casting additional uncertainty over the possible timing (and content) of institutional reform.

For these and other reasons, it is likely that at least some of the “great expectations” will be transferred to the following holder of the EU Presidency, Portugal. It may therefore not be a coincidence at all that Germany, Portugal and Slovenia have established a sort of new ‘troika’ with a shared agenda and pre-set lines of communication.

It is also to be expected that the likely new President of the European Parliament (a fellow German) and the Commission President (a fellow Portuguese) will both try to play an important role in this process.

EU leaders’ relief that the December European Council passed off without incident is understandable, but they are not out of the woods yet.