For this correspondent it was, in some ways, like going back to the future.
As a young reporter in Brussels, I remember the days when former British Prime Minister Margaret Thatcher banged her handbag on the table and demanded her “money back” from the European Union — a reference to Britain’s payment, which it believed was excessive, into the EU budget.
Britain did indeed get some of its money back. But in getting the cash, it also reinforced its image as a perennial EU outsider, always fighting its corner instead of focusing on the common good.
Now London is once again the outsider looking in as other EU states agreed on Dec 9, in the wake of Europe’s sovereign debt crisis, to greater budgetary surveillance by Brussels, stronger fiscal discipline, and automatic sanctions for states that cannot control their finances. The break represents a major symbolic shift for the EU, which has never before cemented a disagreement so publicly and so thoroughly.
The Union was a successful 20th-century experiment in regional integration and an unparalleled pooling of sovereignty. But can it survive in the more competitive, globalised 21st century?
Even a year ago, the answer would probably have been yes. Today, however, the 27-nation bloc faces a very uncertain future.
The EU, and especially the 17 members of the eurozone, has lived through a nightmare year. A sovereign debt crisis in several countries spotlighted fundamental flaws in the management of the single European currency and provoked unexpected political change in Greece and Italy.
Both Lucas Papademos, the new Greek prime minister who is a former vice-president of the European Central Bank, and Italy’s new leader Mario Monti, a former member of the European Commission who took over from the quixotic Silvio Berlusconi, are well-respected men whose competence is undisputed.
But the issue highlighted, more than ever before, the pivotal role of Germany, the EU’s largest and most resilient economic powerhouse. As the eurozone lurched from crisis to crisis and failed summit to failed summit, the markets and the people turned to German Chancellor Angela Merkel for a helping hand.
The German leader did finally accept the pleas for assistance — but in the process made herself unpopular with domestic public opinion as well as with other Europeans who complained of German arrogance.
France emerged diminished by the tensions. Ironically, however, the downgrading of Belgium’s credit rating forced that country’s squabbling politicians to finally agree on a new government, headed by French-speaking Elio Di Rupo, after a record 600 days of negotiations.
As the markets and politicians played hide and seek, young Europeans worried about their future took to the streets in several capitals. The Indignados (the angry ones) emerged as a powerful voice for change in Spain and Greece, while movements inspired by America’s Occupy Wall Street remained strong in Britain.
By mid-December eurozone leaders had managed to hammer out the intergovernmental agreement on tightening economic governance. But the markets were not too impressed.
And, crucially, Britain was outside the deal. As British Prime Minister David Cameron put it: “What was on offer wasn’t good enough for Britain.” Cameron argued that he acted to protect the UK’s financial sector, but his stance has been denounced by his coalition partner, Deputy Prime Minister Nick Clegg of the Liberal Democrats, as “bad for Britain” and one that could leave it “isolated and marginalised”.
The new arrangement within Europe is likely to throw up a series of unpredictable political and legal problems that will emerge as the intergovernmental text is drafted in time for the EU leaders’ spring summit in March. “We would have preferred unanimous agreement,” said European Commission President Jose Manuel Barroso, but added that it had become impossible.
According to French President Nicolas Sarkozy, in fact, there are now “two Europes”, one which “wants more solidarity between its members and regulation, the other [is] attached solely to the logic of the single market”. Britain’s decision to stay out of the so-called fiscal compact has marked, he told Le Monde, “the birth of a different Europe”.
— Shada Islam is Dawn’s correspondent in Brussels
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