Blair’s European battle begins at home

By Quentin Peel

Financial Times

Published: June 23 2005

When Tony Blair stands up in the European parliament today to present his programme for the British six-month presidency of the European Union he can expect a rowdy reception. The prime minister’s stubborn defence of the UK budget rebate at the Brussels summit last week won him no sympathy. Even his east European friends are upset.

Of course, he is not the only one to blame for the poisonous squabble over long-term budget financing. Jean-Claude Juncker, the prime minister of Luxembourg, which is about to vacate the presidency, must share responsibility for pressing on when it was apparent that an agreement could not be reached: a quick admission of failure would have been far less bruising.

Yet as a result, Mr Blair now faces what could well be the most difficult British presidency since the UK joined the Common Market in 1973. The No votes in France and the Netherlands to the EU constitutional treaty had already dealt a terrible blow to the decision-making process: they will encourage more national defensiveness from everyone. That is likely to affect future enlargement – to the Balkans, Turkey and Ukraine – as much as future financing. There will be far less inclination to reach deals on completing the single market, such as the services directive, or to agree concessions for the Doha trade round. The prospects for embracing difficult economic
reforms may be as moribund as those for ratifying the constitutional treaty.

Downing Street is trying to put a brave face on it. There are signs of frantic rewriting of Mr Blair’s speeches to take into account the new political reality. He will have to learn to be far more diplomatic, and less triumphalist, if he wishes to be a successful deal-maker.

Yet the real problem is not diplomacy but politics. There is a widespread view in Britain that if the leaders of France and Germany are weak, the British prime minister is stronger. It is arrant nonsense. The opposite is true in European politics. If Germany and France are weak, they are also likely to be defensive and unco-operative. Only if they are self-confident are they prepared to agree to politically difficult compromises, whether they are British-brokered or someone else’s.

The political reality is that both Jacques Chirac, French president, and Gerhard Schröder, the German chancellor, are in dire straits domestically: the former as a result of the No vote and plunging personal popularity, the latter facing defeat by the opposition Christian Democrats in early elections in September. Far from clearing the way for British leadership, such Franco-German weakness is more likely to guarantee gridlock.

For example, one of the top items on the British agenda is to agree a negotiating mandate to launch EU accession talks with Turkey on October 3. It is not straightforward, because Cyprus will probably seek to attach all sorts of conditions. That may well encourage others who are hesitant on Turkish membership to throw a spanner in the works. Without strong support from Germany and France, Mr Blair will be hard pressed to get the mandate through.

British misunderstanding of the importance of France and Germany is compounded by the other great British failing, especially at a time of the presidency: hubris. The “Britain knows best” school of thought, most clearly expressed by Jack Straw, the foreign secretary, and Gordon Brown, the chancellor of the exchequer, seems guaranteed to raise the hackles of the rest of Europe.

This is true of Britain’s liberalising economic agenda, and it is true of Britain’s passion for EU enlargement, including Turkey. The prime minister’s advisers seem to have begun to understand that putting British flags on policies for the EU is counterproductive. The trouble is that they have been doing it so long – for domestic purposes – that they cannot undo the damage.

Take Mr Blair’s onslaught last week on the Common Agricultural Policy as the cause of the inequity in the EU budget. He is perfectly right that it is a big part of the problem. But he produced the argument so late in the day, when it seemed that the UK rebate was under irresistible pressure, that many other Europeans see it as simply self-serving. He ignored the progress in reforming the CAP, with payments switched from price support to income support. He forgets that the UK itself blocked a plan to cut costs by restricting income support to small farmers – because most of Britain’s CAP receipts go to the biggest landowners.

Mr Blair needs to regain credibility in Europe. He was badly damaged by Iraq but the performance of the UK economy helps him. On the other hand, he has been a failure on one vital aspect: winning support in his home country for the EU. Few believe he would ever have won a UK referendum on the treaty. His failure to promote a proper debate on Europe at home looks almost as bad as Mr Chirac’s failure to win his referendum. So it is not just a matter of winning a few agreements at the negotiating table. The real test for Mr Blair in Europe will be whether he can persuade his own country to come to terms with the EU, rather than the EU to come to terms with Britain.