The absence of progress last Monday in the Council on the financial perspectives 2007-2013 did not surprise anyone; it was announced in advance. With the UK Presidency having set a special restricted meeting (“conclave”) for 7 December for which the numbered proposals are reserved, the ministers only had one new point for discussion this week. The point of the discussions can be summed up in two points: a) increasing the pressure on the Presidency. The European Commission and several Member States have stressed the need for an agreement before the end of the year, because failure would have disastrous consequences; b) gaining an overall view of the national positions, with results that are not at all reassuring, with divergences not only confirmed, but even deepened.
Here is a run-down of the state of play and the main national positions.
1. Tony Blair's position is extremely difficult. The Prime Minister might be disposed towards certain concessions, on the British rebate as well as the agricultural dossier, but he is obliged to take account of internal reactions within his own government and public opinion in his own country. The fundamentally euro-sceptic press and the convictions of Gordon Brown and other politicians have created an atmosphere which makes any concession problematic. Failure would give the UK free rein of action under the next presidency, which justifies the theory (put forward by the Belgian minister Karel de Gucht) that this was the aim of the British strategy. If that is the case, failure is guaranteed.
2. Twenty (or twenty-two?) Member States in favour of the Juncker compromise. The last compromise from the Luxembourg Presidency was supported in June by 20 Member States. They all confirmed that this should remain the basis of the final agreement. The European Budget Commissioner Dalia Grybauskaité spike of substantial support from 22 Member States, observing that only three had put entered reservations: the UK, Sweden and the Netherlands. In his communication to the Summit in October, the President of the Commission also expressed a reservation on the Luxembourg compromise, saying in particular that the overall sum should be increased; Ms Grybauskaité did not mention that this time.
3. Two surmountable reservations, one more problematic. The Swedish and Dutch reservations could be considered to be minor, not because the governments concerned are likely to abandon them (quite the reverse) but because their financial implications are manageable. These two countries think that their net contribution to the budget is excessive and must be reduced. According to informal calculations this would be possible, either through very modest cofinancing of agricultural spending, or by a gesture from the new Member States. The British reservation is on a whole other scale. Jack Straw has confirmed that the next numbered proposals from the Presidency will include “significant changes” compared to the Luxembourg compromise. The key point is still the relationship that the UK has created between the funding of the CAP and its own rebate. Since the latter is considered to be a consequence of the former, it can only be changed in connection with a review of agricultural spending. But this is fixed until 2013; and therein lies the impasse. The “rendez-vous for review” clause which also involves the “income” aspect of the budget does not seem to be enough for London because the result is not guaranteed.
4. The problem of Italy and Spain. These two countries will necessarily lose part of their current funding under the cohesion policy, and they want to limit the losses, since some of their regions still need support. Spain has launched the idea of an Innovation Fund, and Italy has indicated (in a letter from its Prime Minster to Tony Blair) that it absolutely will not be able to agree to any further losses compared to the “Luxembourg compromise”.
5. The rights of the new Member States. In the absence of financial perspectives, with the budget arrangements based on the rules in force, these countries would be robbed of an essential part of the funding to which they are entitled under the accession agreements. Clearly this would be unacceptable, to the point where the idea of a partial agreement in their favour has been suggested. The Commission is opposed to this, obviously, because it does not want the chances of an overall agreement to be reduced. This is a key dossier.
With the positions and demands being largely contradictory, we can see the difficulty Tony Blair is having in putting numbered proposals on the table. Some observers are pointing out that situations just this difficult have happened in the past, and that Europe got through them. Others are observing that European impetus - among both leaders and public opinion - was different then, and they, frankly, are pessimistic.
(F.R.)