CHALLENGES 2005-2006: Europe Looking for a Way Forward

By IPS Correspondents Reprint | | Print |

Stefania Bianchi

BRUSSELS, Dec 21 2005 (IPS) - The year 2005 will be remembered as the ”annus horribilis” in the European Union with its political wrangling, terrorist attacks, social unrest and natural disasters, and there are questions over how the bloc will progress next year.

The year 2005 will be remembered as the ”annus horribilis” in the European Union with political wrangling, terrorist attacks, social unrest and natural disasters, and there are questions over how the bloc will progress next year.

Throughout 2005 European leaders clashed over the ”deepening” of European integration versus opening the bloc to more members, economic reforms versus social and trade protection, investing European Union (EU) funds in research and development or in agriculture.

With no agreement on the fate of the bloc’s new constitutional treaty in sight after the ”no” votes in France and the Netherlands, disagreements over Turkey’s accession and fierce arguments over the multi-annual budget, the EU appears to be in a deep crisis and incapable of finding a way forward.

But Europe’s problems have run much deeper than constitutional crises. EU member states have also had their own share of troubles.

London subways were bombed by homegrown Islamist terrorists in July, destructive forest fires raged throughout Spain and Portugal in the summer months, autumn riots across France heightened fears that Europe’s leaders are out of touch with their citizens, and September’s German election satisfied few as Chancellor Angela Merkel presides over a grand coalition that the common man wants to turn around the country’s ailing economy.

The document intended to streamline the EU, give the bloc a permanent president, a foreign minister, and a clearer sense of purpose, procedure and identity.

The voting started well, as seven countries – including Spain, Germany, Austria and Slovakia – ratified the draft EU constitution, but soon turned sour in May when France and the Netherlands rejected the document.

The referenda provided the chance for millions to vote not only voice their concerns over the direction of the bloc, the accession of 10 new states and the prospect of Turkey’s admission, but also about events at home.

The French vented their animosity towards French President Jacques Chirac and the Dutch rammed home an even more resounding no on the constitution three days later, leaving the project effectively dead.

Shortly after this political setback, Britain took over the rotating EU presidency. At the start of his presidency, British Prime Minister Tony Blair vowed to chart ”a new economic direction” to help Europe ”meet the challenge of globalisation” and promised to resurrect the floundering bloc.

But within days of assuming the chair of the EU, London was shook by the July 7 bombings, which turned Blair’s attention to pressing concerns at home, rather than European matters.

Although in the second half of its presidency, Britain managed to chair important – and often heated – debates on anti-terrorism measures, immigration issues, a new EU chemicals bill and Turkey’s EU membership, arguments over the EU’s next big spending round or the so-called financial perspectives covering the period 2007-2013 has dominated its agenda.

The year did promise to end on a small high with a deal on the spending package, but it was not without a fight and only after some 30 hours of negotiations.

The negotiations, which were due to end in June, finally concluded just days before the bloc with a compromise in the early hours of Dec. 17.

At the heart of the discussions was the overall level of spending, the size of Britain’s rebate, the amount of development aid for new member states, and the timetable for further reform of the bloc’s Common Agricultural Policy (CAP).

In the deal, Britain agreed to give up 10.5 billion euros (12.4 billion dollars) of its rebate, and the total budget will grow to 862.4 billion euros (1,024 billion dollars), helping to fund the development of new member states.

In return, France has agreed to a budget review in 2008-2009, which could lead to cuts in farm subsidies.

Although the budget row has now been dispelled, the bloc will face an even greater challenge next year as it tries to turn around the problems and failures of 2005.

The EU as a whole also needs a success to dispel a sense of crisis created by the rejection of the constitution by French and Dutch voters, and the bitter disputes over the budget that marred the last major EU summit in June.

The bloc must also tackle an unresolved battle over how far to open up cross-border competition in the services sector, which the European Commission, the EU executive, sees as key to boosting economic growth.

Antonio Vitorino, former European commissioner for justice and home affairs and Chairman of the European Policy Centre (EPC) think-tank’s political Europe programme says the deadlock over the constitutional treaty has immersed the EU into a difficult political crisis, which will not be resolved until the EU institutions are reformed.

”All institutions have problems in communicating what they are doing in a crystal-clear manner, explaining who does what and how what they do really impacts in citizens’ daily lives,” he says in a paper prepared for the Centre.

”Generally speaking, the decision-making process lacks transparency, which is a key prerequisite for enhancing accountability. The composition of the EU’s institutions following enlargement raises serious questions about efficiency and the Union’s capacity to take decisions in an appropriate timeframe,” he adds.

But the bloc will try to adopt the business-as-usual approach with the Austrian and Finnish governments already pledging to maintain the British presidency’s focus on economic reform during their EU presidencies.

The Austrian presidency faces a daunting task conducting a promised debate on the future of the EU’s creaking institutions and the scope of future enlargement, but has already indicated that it will not push for the adoption of the EU constitution.

The Balkans and enlargement issues will dominate the bloc’s external relations agenda. The EU will also start talks with Bosnia-Herzegovina about the so-called Stabilisation and Association Agreement, which could be a first step toward the EU’s future enlargement into the Western Balkans.

Accession talks with Turkey and Croatia, which began last October, are unlikely to make much headway as the EU’s focus will be on screening legislation in the candidate countries.