Feeling of urgency. There is more to this than the 'simplified treaty' and relations with Turkey. They are the most spectacular parts of the comments by the new president of France and have given rise to much media speculation, but Nicolas Sarkozy also has many other ideas that could shake up the EU. It will be a gradual process and depend on current events. The priority is the new European treaty (it will probably be called a 'fundamental treaty') because there are only three weeks left to decide on its nature and main direction and to convene the IGC (intergovernmental conference) which will actually draw it up The Turkish issue can wait but other dossiers cannot - like trade policy and the status of agriculture in connection with the Doha Round.
Nicolas Sarkozy's ideas do not always come as a surprise because some of them had already been mooted by other people. What is new is the feeling of urgency and the desire to get results. How long now have people been calling for the EU to think about its geographical borders? How long has the issue of striking a new balance in Economic and Monetary Union between the economic and monetary arms been on the cards? Sarkozy is a catalyst. His pressure makes European debate inevitable. Putting things off will no longer work as a tactic, in some areas at least, and it will be more difficult to continue with misunderstandings. This will mean a shake-up of some of the old habits of the European institutions and member states and will show up disagreement on the very nature and ambitions of the united Europe.
Nicolas Sarkozy wants debate on Europe's borders by the end of the year under the Portuguese Presidency. He has announced a common initiative with Italy on economic governance in the eurozone to give the Eurogroup more teeth without being dogmatic about it (not yet at least). If reasonable objections are made, he changes tack. On the European Central Bank (ECB), for example, he started off by calling for a review of its statutes to introduce economic growth as one of its objectives alongside monetary stability, but now recognises that the statutes cannot be changed and what is needed is to boost economic governance and strike a balance with monetary governance.
I will try to resume the issues that Nicolas Sarkozy says he wants to raise at EU level and his initial ideas, leaving aside Europe's borders, where he has not really said much yet, only announcing that he wants the issue discussed and discussed fast (in connection with the Turkey quesiton perhaps).
Giving the eurozone real economic governance. At a press conference in Brussels after his meeting with the president of the European Commission on 23 May, Nicolas Sarkozy made his revised position clear. I repeat what our editor-in-chief noted in his report in issue 9432. As far as France is concerned, giving the eurozone true economic governance is a priority, without challenging the role and independence of the European Central Bank. He said that initiatives would be made at the right time, adding that he already had some ideas and a timetable. In Paris a few days later, after meeting Romano Prodi, he mentioned a Franco-Italian initiative, and on other occasions he has referred to the article of the Maastricht Treaty giving the Economy and Finance Council responsibilities with regard to euro exchange rates.
Do I need to remind readers how many times the president of the Eurogroup, Jean-Claude Juncker, has stressed the need for greater coordination of the economic policies of the eurozone countries, particularly in the budget and fiscal domains? He will be delighted to get Franco-Italian support and European debate at the highest political level. Giving the Eurogroup institutional status and the power to take decisions is more complicated from the institutional point of view (should parliamentarians elected in countries which are not members of the eurozone be allowed to participate in the debate and the voting?) and from the political point of view (the United Kingdom would be excluded from decision-making having a direct impact on the whole of the EU). These political issues will not be able to be restricted to the fringes of the recommended debate.
Restoring 'Community preference' and the reciprocity rule. 'Community preference'. These two words had almost disappeared from EU language and are not included in the treaties. They are present in reality in the common customs tariff and the other 'four freedoms' (free circulation of goods, people, capital and services) among member states. Nicolas Sarkozy says the 'Community preference' should be given full meaning again and not be drowned in the sea of globalisation.
Some commentators have observed that the Community preference already marks progress in terms of economic liberalism compared with the dangers of returning to national preferences. These are not theoretical dangers - they are clear in various areas like company purchasing, mergers and services. Fortunately the European Commission and Court of Justice are careful to combat this because it would mean the end of the Common Market. Set against these dangers, the European preference is healthy. But not everyone sees it like this and the idea offends some third countries (not surprisingly), traders and people justly fearing any return of protectionism. This is why Nicolas Sarkozy had to clarify his position and make his intentions clear, which he did at the above-mentioned press conference in Brussels. He said that he backed free trade and Europe didn't have to fear globalisation but had to demand reciprocity. If Europe opens up its markets, so must the others “at the same time and under the same conditions”. On another occasion he slammed social, environmental, fiscal and monetary dumping to the detriment of Europe. Counterfeiting is economically damaging and dangerous in terms of safety standards and health. All this needs to be debated - what is damaging to Europe is that debate has stopped, says Sarkozy.
Protect European agriculture and the EU's food autonomy. Nicolas Sarkozy did not mince his words at the Brussels press conference. “I believe that Europe's food autonomy is vital, I believe that safe food products are very important, I reject using services as a bargaining tool against agriculture”, he said. His vision is not of a Europe without farmers in order to win the opening for service exports.
He set out his views on the upcoming renegotiation of the CAP in his speech in Strasbourg on 21 February 2007, noting that he would suggest safe food, respect for the environment, and a decent income for farmers as objectives for Europe's food autonomy. He added that it was necessary to re-think farm policy and scrapping the CAP would be disastrous for Europe's independence.
Sarkozy's ideas have already given rise to lively reaction from, for example, MEP Syed Kamall, trade spokesman for the British Tories, who said that the French president might have changed but he still had the same discredited policies.
Introducing an ethical dimension to financial capitalism. This issue has to be dealt with at EU level according to Sarkozy. I therefore welcome his comments and ideas (in his 21 February speech). He said (unofficial translation) “I do not believe in the perpetuity of capitalism where a company boss is not responsible to shareholders (…) I do not believe in the survival of financial capitalism demanding such exorbitant returns that no long-term investment is possible. I do not believe in the efficiency of a type of capitalism where people get richer by speculating than by being an entrepreneur or by working, where people get rich living off their income without doing anything or taking any risks. I do not believe in the survival of dehumanised capitalism where all ownership is watered down on the stock exchange, where shareholders are not connected with companies and the people working for those companies. I want a Europe that helps re-balance financial capitalism to make it favour the entrepreneur more. I will suggest to our partners that together we should decide to tax the production of wealth less and to tax the wealth produced more, to tax labour less and pollution and consumerism more. This would be the first step in the direction of European fiscal harmonisation and of a form of Community preference”.
Debate has kicked off. France cannot impose its own ideas but it can generate debate. The new French European affairs minister, Jean-Pierre Jouyet (who started his European career in Jacques Delors' cabinet when Jacques Delors was president of the European Commission), has announced plans to spend half his time in Brussels. European debate has already started in some areas. The Economic and Financial Council has looked at hedge funds and the German presidency has called for a voluntary code of conduct in this field (Mathieu Bion summarised the first ministerial conclusions in issue 9420). The Competitiveness Council discussed the role of the European internal market in terms of globalisation at its meeting at the end of April (see Emmanuel Hagry's summary of the debate in issue 9419). The debate will no doubt speed up and become more operational, although some of Nicolas Sarkozy's ideas (like the 'Community preference' and the role of agriculture) are controversial and will generate disagreement. But the EU cannot continue to bask any longer in an atmosphere of equivocation, hints and reading between the lines - if 'strengthened cooperation' and 'differentiation' are inevitable, it's better to be aware of it.
(FR)