On January 1st 2010, Spain will take over the rotating Presidency of the European Union. José Luis RodrÃguez Zapatero, the socialist President of Spain, will, with his government lead the European Council for the next six months. Spain will set the agenda in Council, preside over Council meetings, lead negotiations and attempt to broker compromises between the member states on current European Affairs and a set of predefined priorities.
And yet, we also have – thanks to the implementation on 1st December 2009 of the Lisbon Treaty – a permanent President of the European Council in the person of former Belgian Premier, Herman van Rompuy, whose job it is to chair the European Council, which consists of the Heads of State of the EU’s 27 Member States. The Lisbon Treaty was meant to bring about more consistency in policy-making at the centre of the EU decision-making machinery; so why does the EU persist with its six-month Presidency where each Member State has Buggin’s Turn at the top of the table?
National capitals have to prepare their priorities well in advance of the start of their turn at the Presidency (Spain has been preparing for over a year). For some, the Presidency is an opportunity to show-case their government at the European level; for others, it’s just a distraction. National ministers are required to spend more time in Brussels and much of the civil service becomes pre-occupied with matters that are not necessarily core to their department. Rotating presidencies do not make for consistent policy-making. Often the priorities of one Presidency are completely at odds with those of its successor.
For now, at least, it will be business as usual for the rotating Presidency system. Herman van Rompuy has no administration that he can instruct to run the constituent parts of the Council. The European Council will continue to be assisted by the General Secretariat of the Council, and as such, the President will depend on the advice and support of the staff of the General Secretariat.
The new foreign affairs council will be chaired by the High Representative – another position created by the Lisbon Treaty. Former European Trade Commissioner, Baroness Ashton will perform this function. Unlike the President, she will have her own department – the European External Action Service (EEAS) - which is expected to be operational in April 2010 and will act as the EU diplomatic corps, drawing advisers from Foreign Ministries across the European Union. Already, President van Rompuy has made the point of keeping foreign ministers out of the European Council meetings now that they have a dedicated Foreign Affairs Council. There are signs that a turf war is about to break out between the Foreign Affairs Council and the General Affairs Council, which since its split from External Relations Council (when it was known by the acronym, GAERC – General Affairs and External Relations Council), focuses mainly on co-ordination across policy areas or preparation for the European Council. It is rumoured that trade policy and enlargement will fall under the remit of the Foreign Affairs council, despite the General Affairs Council’s attempts to keep the policy areas within its own mandate.
The Foreign Affairs Council is unique in that it is chaired by the High Representative rather than the Presidency. The High Representative will also appoint her own representatives to chair the constituent parts of the European External Action Service, such as the Political and Security committee. All other Councils – such as the Economic and Financial Affairs Council made up of 27 Finance Ministers - will continue to be chaired by the relevant minister from the rotating presidencies. The Committee of Permanent Representations (COREPER) which comprises of the EU 27 Ambassadors and deputy Permanent Representatives) and the Council working groups, made up of national officials based in Brussels - will continue to be chaired by the rotating Presidencies too.
The role of President of the European Council is very new and the job description provided by the text in the Lisbon Treaty is deliberately vague. It can be as elastic as the office-holder wants it to be. If Tony Blair had been appointed, there is no doubt that he would have set to work straight away on building a power-base, very much modelled on Baroness Ashton’s EEAS. President van Rompuy is much more limited in his ambition. Nevertheless, it is not inconceivable that the remit of the permanent President’s role (and accordingly that of the General Secretariat) will, at some point, expand to the point where it rivals the rotating Presidency in setting the Council agenda and pushing through legislation on behalf of the 27 Member States.
The Lisbon Treaty and its implementation impose a complex political balancing act on the Spanish Presidency. Mr Zapatero has been careful to work closely with the new President of the European Council to avoid potential friction over the two presidential roles. They agreed in mid-December to create a working group to coordinate their activities for the next six months. Mr Zapatero told Mr van Rompuy; “Mr Council President, the rotating presidency is at your disposal to support you in taking up appropriately the role of leadership and political steering of the European Council”. However, it seems unlikely that Spain will handover the fruit of months of preparation to someone appointed just last November. It appears that Messrs Zapatero and Van Rompuy have already agreed that Madrid will Chair the EU-US and EU-Latin America Summits, which in principle are to be led by the Council President. So far so good. But what about the implications for the long term future of the Presidency?
The Council President could evidently fully replace Country Presidencies, yet one could argue that rotating presidencies add specific expertise and funding that a single President could not deliver. There’s a case to be made for either system but as events unfold and turf wars break out, as they inevitably will, it will be hard to make a case for both.
Tuesday, December 22, 2009
Wednesday, December 9, 2009
Chancellor sets out challenge of EU financial regulation threats in Pre-Budget Report
Not many clues in the UK Chancellor's Pre-Budget report today on how the Treasury is preparing to defend the City of London against new measures coming from Brussels aimed to restrict the financial services sector. Much less was there any ideas of what the rationale would be when there is, according to some, pressure in the UK economy to reduce dependence on the financial services sector.
New Internal Market Commissioner, Michel Barnier, is on record as saying that the City of London is an asset to Europe. However, there is real anxienty in the Square Mile that the European Commission proposals on market regulation will put the City in a competitive disadvantage and that the Government is not properly geared up to take the battle to Brussels. The Anglo-Saxon model has been castigated by the French, Dutch, Belgian and Germans for the financial crisis even though their banks too were horribly exposed.
The Pre-Budget Report says that the Government is "closely involved in negotiating the proposed Alternative Investment Fund Manager Directive" and that it "has been working to secure substantial improvements". Still early days I suppose but its not clear that the Government has developed a fully operational strategy yet to deal with the regulatory threats to its hedge fund and private equity industry.
The Pre-Budget Report also says that the Government is "actively engaged in EU efforts to amend the Capital Requirements Directive to provide a state-of-the-art prudential framework for credit institutions and investment firms in the EU." Current proposals will raise the amount of capital banks must hold against resecuritisations and assets held in their trading books: "The UK is strongly supportive of the adoption of these rules and will continue to ensure that EU legislation appropriately strengthens prudential standards while being consistent with international agreements."
Another priority is “Solvency II”: "contributing to the development of modern and risk-based EU-wide solvency requirements for insurers that protect Europe’s claimants, savers and pensioners. What would be good to know is what the Government's position on the tax consequences of the Directive is.
The British have a real fight on their hands to defend the interests of the City. It will also have to square its position with its claim to take a global leadership role in cracking down on "excessive risk-taking" in in financial services as well as reducing over-reliance on the financial sector in the British economy.
New Internal Market Commissioner, Michel Barnier, is on record as saying that the City of London is an asset to Europe. However, there is real anxienty in the Square Mile that the European Commission proposals on market regulation will put the City in a competitive disadvantage and that the Government is not properly geared up to take the battle to Brussels. The Anglo-Saxon model has been castigated by the French, Dutch, Belgian and Germans for the financial crisis even though their banks too were horribly exposed.
The Pre-Budget Report says that the Government is "closely involved in negotiating the proposed Alternative Investment Fund Manager Directive" and that it "has been working to secure substantial improvements". Still early days I suppose but its not clear that the Government has developed a fully operational strategy yet to deal with the regulatory threats to its hedge fund and private equity industry.
The Pre-Budget Report also says that the Government is "actively engaged in EU efforts to amend the Capital Requirements Directive to provide a state-of-the-art prudential framework for credit institutions and investment firms in the EU." Current proposals will raise the amount of capital banks must hold against resecuritisations and assets held in their trading books: "The UK is strongly supportive of the adoption of these rules and will continue to ensure that EU legislation appropriately strengthens prudential standards while being consistent with international agreements."
Another priority is “Solvency II”: "contributing to the development of modern and risk-based EU-wide solvency requirements for insurers that protect Europe’s claimants, savers and pensioners. What would be good to know is what the Government's position on the tax consequences of the Directive is.
The British have a real fight on their hands to defend the interests of the City. It will also have to square its position with its claim to take a global leadership role in cracking down on "excessive risk-taking" in in financial services as well as reducing over-reliance on the financial sector in the British economy.
Monday, December 7, 2009
"For a Free Market Europe" - Syed Kamall
Syed Kamall - the Conservative MEP for London kindly sent me a copy of his new book -"For a Free Market Europe" - a collection of his articles over the last three years setting out his views on a European Union which should do more to promote free market liberalism.
Syed has been consistent champion of free market values in the European Parliament since he became an MEP in 2005. He is a leading figure in the Brussels Network - which brings together conservatives and centre-right figures in Europe who want to campaign for small-state government. This collection of short articles illuste=rates his commitment to the free-market cause.
Some highlights:
The dilemma of being a free market classical liberal in the European Parliament:
He starts from the fundamental nature of the European Union and its basic premise: Should it be a free-market coalition of sovereign states or should it try to ape the "cross-continental socialist model"?
Should pro-free-market MEP’s work within the system to change it or attack it from the outside? Should some liberalism be an adequate compromise as the “perfect” free-market is unachievable?
The are big questions. However, Syed seems to think the answer is easy. He says the EU should provide a marketplace and a framework of basic rules and minimum standards – better to be an unregulated single market than one subject to overbearing directives
Politicians can only do what they can with the tools available – therefore free-market liberal MEP’s should work from within the system to change it
He applies his free-market thinking to environment policy too: The liberalisation of trade does not cause environmental damage, he says; “Calls for higher taxes often have precious little to do with real environmental factors but a lot to do with environmental posturing or the need to raise new revenue”
“Globalisation and free trade are not only the key to enriching this planet; they may also prove to be the key to saving it.”
Whether you agree with Syed Kamall or not, his written articles over the last few years show that he is on of the most consistent and energetic campaigners of the free market in the European Parliament.
Syed has been consistent champion of free market values in the European Parliament since he became an MEP in 2005. He is a leading figure in the Brussels Network - which brings together conservatives and centre-right figures in Europe who want to campaign for small-state government. This collection of short articles illuste=rates his commitment to the free-market cause.
Some highlights:
The dilemma of being a free market classical liberal in the European Parliament:
He starts from the fundamental nature of the European Union and its basic premise: Should it be a free-market coalition of sovereign states or should it try to ape the "cross-continental socialist model"?
Should pro-free-market MEP’s work within the system to change it or attack it from the outside? Should some liberalism be an adequate compromise as the “perfect” free-market is unachievable?
The are big questions. However, Syed seems to think the answer is easy. He says the EU should provide a marketplace and a framework of basic rules and minimum standards – better to be an unregulated single market than one subject to overbearing directives
Politicians can only do what they can with the tools available – therefore free-market liberal MEP’s should work from within the system to change it
He applies his free-market thinking to environment policy too: The liberalisation of trade does not cause environmental damage, he says; “Calls for higher taxes often have precious little to do with real environmental factors but a lot to do with environmental posturing or the need to raise new revenue”
“Globalisation and free trade are not only the key to enriching this planet; they may also prove to be the key to saving it.”
Whether you agree with Syed Kamall or not, his written articles over the last few years show that he is on of the most consistent and energetic campaigners of the free market in the European Parliament.
Friday, December 4, 2009
Fight is on for the 73rd Seat
Dan Hamilton writes in ConservativeHome that the Ministry of Justice in the UK has not yet directed the lectoral Commission to allocate the new seat to the UK due to it under the Lisbon Treaty rules: http://alturl.com/7vzo
Notwithstanding the conclusion he makes that this somehow shows the Labour Government has threatened British interest by not yet naming the 73rd MEP, Hamilton does make a good case for decision sooner rather than later.
It looks like the UK's 73rd seat would go to the West Midlands which would mean the Conservatives would get another MEP. Perhaps this is why there is no rush to make the nomination. If the extra seat goes to London, then Labour would get the extra MEP - Anne fairweather.
In any case, the new MEP - Tory or Labour would have to wait until 2011 (by which time a complex legal protocol will be ratified by national governments) before they are able to cast a vote as a full Member.
Notwithstanding the conclusion he makes that this somehow shows the Labour Government has threatened British interest by not yet naming the 73rd MEP, Hamilton does make a good case for decision sooner rather than later.
It looks like the UK's 73rd seat would go to the West Midlands which would mean the Conservatives would get another MEP. Perhaps this is why there is no rush to make the nomination. If the extra seat goes to London, then Labour would get the extra MEP - Anne fairweather.
In any case, the new MEP - Tory or Labour would have to wait until 2011 (by which time a complex legal protocol will be ratified by national governments) before they are able to cast a vote as a full Member.
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