Laws governing investment
RECENT developments indicate that the issues relating to law and practice of investment in Pakistan, especially the settlement of investment disputes, are acting as a disincentive for long-term investment in the country. Giving a background of the concerns of investors, press reports have quoted from the summary of the Promotion and Protection of Investment Bill stating that as a consequence of various recent judicial decisions, notably by the Supreme Court in the Hubco and Kapco cases, the confidence of foreign investors in Pakistan’s legal/judicial processes have been markedly weakened.
Faced with this problem, the government has now had a review of the legal framework relating to investment. As a first step, it has taken away jurisdiction from the lower courts and given exclusive right of adjudication to the high courts over “all matters related to” the Foreign Private Investment Act of 1976. Other follow-up measures expected are the liberalization of the national law on arbitration (Act of 1940) and agreeing that henceforth English law will be applicable in cases involving rights and obligations of the parties to an investment agreement in Pakistan. These will be decided through international arbitration held at a neutral place.
Even since Justice Munir and his brother judges (with Justice Cornelius dissenting) allowed the law to be trumped by their ‘necessity’, and the Speaker (Moulvi Tamizuddin) lost his case against the governor-general (Ghulam Mohammad), the ‘doctrine’ has remained a dominant instrument of governance in Pakistan and in its many reincarnations has ruled the roost in the country’s chequered history.
Consequently, instead of power being distributed through the traditional arms of government-executive, legislature and judiciary, it has largely come to be concentrated in the executive. The legislative and judicial branches of the government have neither been able to protect the legitimate position of their own institutions in governance nor provide effective protection to citizens from the excesses of an overbearing top executive. Over the years, this has turned the executive, from being one of the three arms of government, into the government itself.
‘How to govern the governments’ that are beyond restraint by their national laws and institutions? In a globalized world, this is not only a problem faced by the citizens of many developing countries, it has also become our area of concern for the international community over a wide range of issues — from human rights and security considerations to trade, investment, economic development and other matters. In many cases, non-compliance with international standards involves heavy penalties to be paid by the country.
Sitting across the table during their talks in Islamabad in April 1997, the great Asian leader and a friend of Pakistan, Prime Minister Mahathir Mohammed of Malaysia spent a great deal of time explaining to his Pakistani counterpart how Malaysia had developed by making use of foreign investment and technology, asking Mr Nawaz Sharif, then prime minister of Pakistan, to focus on harnessing resources for developing the economic potential, rather than as he told him to his face, “adopting revenge-seeking habits” in governance of the country.
But any advice to temper governance with moderation and in consonance with international standards was like talking to the deaf, as individuals and institutions, all the way up to the Supreme Court of the country, were made to bear the brunt of his singular pursuit of absolute power over all instruments of governance. If his favourite 15th amendment had been passed, Pakistan would have re-entered the age of medieval autocracy.
While the ‘natives’ have no recourse to anything other than their national laws and institutions for redress of their grievances against an overbearing executive, the foreign investors have other avenues of relief and redress available to them. They rely increasingly on international treaties and conventions to guide and regulate the conduct of the governments of the host countries.
Pakistan’s move towards becoming an attractive destination for investment flows suffered a severe blow under the Nawaz Sharif regime when the governance was turned into an instrument for settling scores with real and imaginary opponents. Investment flows in those days dropped to one-fourth of their previous levels — from over one billion dollars a year to less than three hundred millions. Repairing the damage has neither been easy nor without heavy penalties being paid by the country to compensate for the overbearing attitude of its top executive. Already tens of millions of dollars have been paid in penalties to the aggrieved foreign parties by way of settling investment disputes, and claims of another $850 million against Pakistan are still pending.
Investment disputes are unique in the sense that these are usually disputes between a private party and a sovereign state. And devising a balanced, impartial and independent system for settlement of investment disputes between a sovereign state (host country) and a private party (investor) has been a difficult proposition. A consensus was finally reached in 1967 in the Washington Convention for the settlement of investment disputes. Sponsored by the World Bank, it created a mechanism under the International Centre for Settlement of Investment Disputes (ICSID) that combines international arbitration of investment disputes with the enforcement of the awards — all under one roof.
The delicate balance between a sovereign state and a private party is arrived at when the investor (and the developed country) forgoes his diplomatic pursuit for protection of investment, and the host country forgoes a part of its sovereignty and agrees to be sued under the rules of international arbitration. While the developed countries had argued for international law to be applicable, the developing countries secured recognition that the law of the host country will be the applicable law, along with the principles of international law, in the absence of the party autonomy. This compromise was meant to strike a balance: encouraging foreign investment flows into developing countries while protecting these against the vagaries of the host country’s laws and institutions.
As long as the governance of the host country was guided by due process of law and its dispute settlement system was impartial, this compromise worked satisfactorily and there were no grounds to change this balance, although debates and discussions for ‘delocalization’ continued at various forums. But, the idea of lex mercatoria, which had lost ground for centuries after the Middle Ages, received a new lease of life from the increasing frequency of the actions of overbearing governments and the investor community redoubled their efforts to seek protection against an unpredictable and politicized system of decision-making.
In its modern reincarnation, lex mercatoria now calls for ‘delocalization’ of the substantive law to be applied by international arbitral tribunals. Although, amending and liberalizing our Arbitration Act of 1940 or the adoption of UNCITRAL Model Law on Arbitration would reduce the risk, the investors are counting on the new and modified version of Bilateral Investment Treaties (BIT) as the principal instrument for protection against vagaries of government policies and for putting dispute settlement effectively beyond the national legal system.
These BITs, which have rapidly increased during the last 8-10 years and numbered over 2000 by the end of 2004, are the heart and soul of the new levels of investment protection and settlement of investment disputes. These new BITs contain many provisions that enlarge the traditional definitions and scope of several critical concepts like investment, protection of investments, fair and equal treatment, corporate nationality, compensation, repatriation of profits and other such measures, and are creating a whole new system of international law on investment.
Traditionally, investment agreements (IA) between parties used to determine the choice of law by the consent of the parties — the principle of party autonomy — and in its absence, the national legislation determining the applicable law. But under the new investment law, in the event of the existence of an IA and a BIT, when it becomes a case of one contract and two dispute resolution mechanisms, the one agreed to under the BIT is more likely to determine the applicable law for the settlement of investment dispute.
Neither does the absence of a specific arbitration clause in an investment agreement any longer constitute a bar for either party to seek international arbitration of their dispute, exclusively on the basis of a BIT between their two countries. Nor would such arbitrations have to wait for the mediation, negotiations or other steps to be tried before recourse to it is taken by either party.
These and many other developments are now redefining the international law on investment through bilateral investment treaties. There are no uniform standards for such treaties and they vary in scope, contents, definitions and other critical aspects, including issues relating to settlement of investment disputes. It is a matter of negotiations between the parties that determines the final shape of a bilateral treaty. As Pakistan is now entering into negotiations for a bilateral investment treaty with the US, many other developed countries with whom Pakistan had earlier signed bilateral investment treaties, are also watching this process to see if a case could be made for reopening their old BITs under the ‘level playing field’ argument.
E-mail: smshah@alum.mit.edu
How corruption hurts social sectors
THE budget season is here. Reports are being leaked to the press — obviously from official sources to improve the government’s image — about the heavy investment the policymakers plan to make in the development of the country. According to one report, the funding for education, health and other social sector projects in the Public Sector Development Programme will go up by 152 per cent from Rs31.3 billion in 2004-05 to Rs78.9 billion in 2005-06.
It is a positive sign that for once the government seems to be mindful of the development of human resources of the country. The federal minister of state for finance has also let it be known that the budget will be a pro-poor budget and will focus on the quality of life of the people.
But will boosting the financial allocations alone bring about a qualitative change in social sectors? True, for decades the health and education sectors remained starved of funds which affected the quality of their performance as well as their quantity and pace of expansion. An adequate number of new educational institutions and health facilities could not be opened and staffed because enough funds were not available.
Gradually it came to be realized that the education and health sectors have a direct bearing on the quality of life. Emphasis then came to be placed on health and education. Various terms were adopted. Whether referred to as the social sectors, basic needs of the people or human resource development, it meant the same thing.
Budget allocations for these areas were stepped up and aid from foreign donors also began to flow in to promote the health and education of the people. As a result the allocation for education went up from 0.8 per cent of the GNP in the eighties to 1.7 per cent of GNP in 2002-03 (it dipped after peaking at 2.5 per cent of the GNP in 1996-97). Health expenditure went up from 0.6 per cent of the GNP in the 1980s to 0.8 per cent of GNP in 2003-04.
The hefty rise in absolute expenditure notwithstanding the number of educational institutions and health facilities opened every year has declined considerably. This has never been analyzed properly, the blame being placed on inflation or inadequate utilization of funds. Thus the deputy chairman of the Planning Commission in Islamabad told Dawn recently that the PSDP utilization had been 49 per cent in the first seven months of this fiscal year but would go up to 97 per cent by the end of the year. It is surprising that the planners don’t take into account the huge amounts being siphoned off for “other” purposes.
In a book published recently, titled Fighting Corruption in Developing Countries Omar Azfar, a research associate at IRIS at the University of Maryland, makes a succinct observation, “Corruption is widespread in the health and education sectors of developing countries and not uncommon in developed countries. Exams are sold in Indonesia and Pakistan. Some reports state that there are 20,000 ghost schools in Pakistan, the expenses for which find their way into the pockets of bureaucrats. Teachers routinely pay between US$200 and US$1,400 for jobs and then collect their monthly salaries ... without working, sharing these salaries with their superiors for turning a blind eye to their absenteeism. Consequently, as many as 32 per cent of teachers in Pakistan never show up for classes.”
Many of the teachers, who are paid for the job of instilling knowledge in their students, use their position for personal gain. Quite a number of them have opened coaching centres (of course not in their own names) and direct their students to enrol there for extra tuitions because the same teachers choose not to perform proficiently in class and neglect their students in school. At the management level, there is misappropriation in the purchase of equipment and other supplies and in the distribution of textbooks.
The same level of corruption is rampant in the health sector as well. Many doctors posted in the rural areas never attend the BHUs or the local dispensaries and live and practise privately in the cities. The tertiary hospitals are usually starved of life saving drugs because their pharmacy staff sell the expensive medicines in the market. They cheat so blatantly that at times they even forget to remove the stamp indicating the name of the government hospital to which they were supplied. Like teachers, many of the doctors in government hospitals do not attend to their patients in hospital hours and treat them in their private clinics for a hefty fee.
Corruption is prevalent in the private sector too, though it takes a different form because there is more accountability in this sector. Generally the lower staff does not indulge in malpractices because it is not tolerated by the top management. But the proprietors and managers have the opportunity to cut corners. The most common malpractice in private sector education is the underpaying of the teachers, jacking the school fees with no logical justification, imposing charges on unnecessary items, tax evasion and denying students the facilities that had originally been promised.
In the private health sector, corruption has grim implications since it can become a matter of life and death. Doctors are known to receive expensive gifts, payments and even paid holidays abroad from pharmaceutical companies as quid pro quo for prescribing their medicines. Prescribing an excess of drugs, and ordering an excess of laboratory tests that are not really needed. Some private clinics which rent out clinics to doctors for their private practice lay down all kinds of conditions. The doctor must get tests done from the hospital lab only and ensure a specified number of hospital admissions every month.
Although ministers and top functionaries of the administration are constantly exhorting their subordinates to work honestly and efficiently, their advice and warning fall on deaf ears. The fact is that corruption cannot be eradicated by word of mouth alone. The need is to analyze the causes and technique of corruption in order to work out strategies to check it. The government will first have to recognize the prevalence of corruption and how it is undermining the delivery of education and health services.
Omar Azfar makes some recommendations, which on paper appear to be effective and logical. But they raise the question: who will bell the cat? If those who are involved in corruption are asked to implement the anti-corruption measures, will they ever succeed? For instance he suggests better accountability, imposing fines, ensuring transparency of financial flows, privatization of service delivery and so on.
But it is more likely, as our experience shows, that imposing fines and punishing absenteeism will only raise the level of corruption by increasing the rates of bribes and “speed money” (bribe to facilitate service delivery). Accountability cannot come from within a corrupt system. The dictum “set a thief to catch a thief” will not apply in this case for the thieves will join hands and share the loot without reporting against the other.
Hence it is important that a third party which is affected by the services provided by the social sectors is empowered to act as a watchdog to monitor the performance of the various agencies. One recommendation by Omar Azfar merits serious consideration, namely, “increasing community oversight of schools and clinics”. This would require the setting up of governing bodies comprising figures respected in the community and with a reputation of integrity. Although the schools and some hospitals have such boards, they are generally ineffective and are sidelined by the bureaucracy.
It is important that these are duly empowered and the education and health departments be made accountable to them. Moreover, it is important that such governing bodies should have cells to receive public complaints against the functionaries who are indulging in corruption. This approach could be tried out on an experimental basis in pilot projects. That would help identify the weaknesses and loopholes if any and would guide the policy makers in fine tuning their strategy.
France leads Europe by the ‘noes’
THERE can be only one explanation for the surprise and shock so many commentators expressed over the outcome of this week’s French referendum on the European constitutional treaty: they must have been hoping against hope that all the opinion polls, which had of late steadily been predicting rejection of the 448-article text by a margin of 10 per cent, would by some miracle turn out to have been wrong.
Perhaps, notwithstanding all evidence to the contrary, they simply could not bring themselves to accept that a nation that had played such a pivotal role in founding the precursor to the European Union (EU) 50 years ago would at this juncture decide against pursuing the project to what is supposed to be its logical conclusion.
That was not to be. On a more than respectable turnout of about 70 per cent, 55 per cent of voters said “non” to a document pieced together under the aegis of former French president Valery Giscard d’Estaing. Anyone who votes against the constitution can’t be considered a European, an increasingly desperate Jacques Chirac had warned in the run-up to the vote. A decisive majority of the electorate didn’t seem to care — or at least chose not to believe their president.
There are those who are interpreting the negative popular verdict as a fatal blow to the constitution, if not quite to the EU. In order to take effect, the document needs to be ratified by all 25 member-states of the Union. None of them is obliged to put it to a referendum; most of the nine countries that have given their assent to the new treaty — including Germany last Friday — have relied for the purpose upon a vote in parliament.
That’s not an undemocratic method, but a referendum is obviously a far better gauge of public opinion. With the main French political parties in favour of ratification, there can be little question that a parliamentary vote would have yielded a clear-cut, if not a resounding, “oui”.
Intriguingly, the popular “non” is widely being seen not only as a protest against a particular conception of Europe, but as a slap in the face of the increasingly unpopular Chirac government as well as the political class as a whole. There may well be more than a few kernels of truth in that perception, but it would be unrealistic to presume that the primary interest of most voters lay in embarrassing Chirac. And, given that the “non” campaign was spearheaded by the Communist Party as well as the non-communist Left on the one hand and the far Right, including Jean-Marie Le Pen’s National Front, on the other, it’s fairly safe to deduce that those who voted against the treaty did so for a variety of reasons. The short-term fallout in France is likely to include a change of government. There have been calls for Chirac to resign before his term expires in 2007. He isn’t likely to heed them, but there have been indications that the days of the even more unpopular prime minister, Jean-Pierre Raffarin, are numbered. Among those likely to succeed him, the frontrunner is Interior Minister Dominique de Villepin — who, in his previous incarnation as foreign minister, had made a favourable impression on international opinion by leading the charge against American efforts to obtain approval from the United Nations Security Council for the aggression against Iraq.
(To briefly go off on a tangent, it is worth noting that Representative Walter Jones, the Republican congressman who coerced Capitol Hill cafeterias into offering customers freedom fries and freedom toasts instead of french fries and french toasts because of France’s refusal to support the US, has now become a vociferous critic of the war in Iraq who regrets his lapse into francophobia.)
Another leading contender for the prime ministerial post is Chirac’s main rival in the ruling Union for a Popular Movement, Nicolas Sarkozy, who has been described as “Downing Street’s favourite Frenchman” — hardly a compliment from the French point of view. It remains to be seen, however, whether rearranging the deckchairs can salvage the reputation of a government whose economic credentials lie in tatters, amid an unemployment rate of more than 10 per cent.
The bigger question, of course, is what will now become of the EU and, more specifically, its so-called constitution, which was the result of tedious consultations and delicate compromises. During the past couple of days, the European press has been filled with obituaries for the document. Incorrigible optimists say the treaty isn’t dead: if all other member-states ratify it, the French can reasonably be asked to reconsider. But that’s an untenable premise. In the non-binding referendum due to take place today in the Netherlands, indications are that the negative vote will be even higher than it was in France.
In Britain, meanwhile, Tony Blair has been reluctant to seek a popular opinion because he knew what the answer would be. He had promised to hold a referendum next year, but is now widely expected to wriggle out of that commitment in the shadow of the French verdict by arguing that Britons can hardly be expected to vote on a document whose fate is so tentative.
The bureaucracy in Brussels is extremely reluctant to renegotiate the constitutional treaty because, apart from the vast effort that would inevitably entail, the process of ratification would have to begin anew, with no guarantee that the redrafted document would prove any more popular than the existing version. However, ultimately renegotiation may come to be seen as the least worst option, given that it would offer an opportunity to rescue some significant but not particularly contentious clauses from the wastepaper basket — for instance, more streamlined voting procedures, whereby unanimity isn’t always a requirement and the strength of a country’s vote varies according to its population; a five-year presidency in place of a six-monthly rotation; and a foreign minister.
Whatever its flaws, it is not the EU’s superstructure that has jeopardized the project but its proposed base. There is a widespread fear that member-states are being locked into an ideologically determined socio-economic system that will effectively bury the welfare state, leaving room only for unmoderated capitalism, which would inevitably entail, among other things, greater job insecurity across the board (in the name of labour-market “flexibility”), more glaring disparities of wealth, wholesale privatization of public utilities and services, and the withdrawal of most safety nets.
Constitutionally enshrining such “virtues” effectively means that no member-state of the EU can legally opt for any system other than the free market. Predictably, opposition to this diktat is being interpreted as conservatism and cowardice, as an unwillingness to come to terms with the realities of a globalized international economy. The past decade and a half has been dominated by propaganda intended to ingrain the impression that unfettered capitalism is the only game in town, and that those who refuse to play along risk relegation to the fringes of society. A better world, we’re told, is not possible because neoliberal economics offers us the best of all possible worlds.
This is arrant nonsense, of course, and many of those who voted no in Sunday’s French referendum recognize it as such. There were, of course, alternative reasons for defeating the official proposal — not least the xenophobia propagated by the far Right, harping on the fear that cheap labour from Eastern Europe will lead to a steady rise in job losses, and that Turkey’s eventual accession to the EU will provoke an influx of Muslim “outsiders”. Apart from those who voted “non” simply because the “oui” brigade was led by politicians whom they have learnt to distrust, there were also those who used the referendum as an opportunity to express their disgust at not being consulted when the EU’s membership expanded last year from 15 to 25.
Every French household received a copy of the proposed constitution in the run-up to the vote. Not many people bothered to read a document described by its progenitor, Giscard d’Estaing, as “better for insomnia than most sleeping pills”. Those who did largely couldn’t make head or tail of the bureaucratese.
But the well-organized ‘no’ campaign succeeded to a considerable extent in sounding a warning about what was at stake in social and economic terms — which helps to explain why support for the constitution slumped from 60 to 45 per cent, and why working-class neighbourhoods overwhelmingly were “non” strongholds while “oui” voters had the advantage in well-heeled districts.
Giscard d’Estaing probably erred in insisting that the document be called a constitution. Had it been described as a treaty, it may just have slipped past the electorate, like the earlier treaties of Rome, Maastricht and Nice. Be that as it may, its defeat deserves to be welcomed.
In the run-up to the poll, one of the commonest arguments for a ‘yes’ vote was that since France had boarded the train, it ought not to jump off at this juncture. But, surely, bailing out or pulling the chain is the only logical response when you don’t like — or don’t know — where the train is headed. And the present halt, unscheduled but timely, should become a launching point for a great deal more debate and popular consultation about the future shape of Europe.
Back in the 1960s, General Charles de Gaulle twice vetoed Britain’s application to join the European Economic Community, because he suspected it of being a Trojan horse for the Americans. He wasn’t wrong, and now Britain isn’t alone in that role: many East European countries have moved seamlessly from Soviet to American satellite-hood, making it that much more difficult to construct a Europe that echoes to some extent the French revolutionary ideals of liberty, egalitarianism and fraternity. If that can be achieved, it’ll be well worth the wait. If not, let it crumble. Who needs a United States of Europe?
E-mail: mahirali1@gmail.com
Two bureaucrats
TILL I finally said goodbye to government service in April 1988, my entire working life, starting in 1950, had been spent either in the province (Punjab and One Unit) or at the centre, with professional duties connected most of the time with information and public relations, where one has to deal with every one from the prime minister down to a naib tehsildar.
So if I claim that I have extensive and deep knowledge of the bureaucracy, of its whims, fads and foibles, of its complexes about status and obsession with promotion and seniority, of its indifference to the lot of the common man, and other attributes that make it unpopular with the public, I shall not be far wrong. I leave it to readers to ask how I could be so dispassionate in my study of the breed, as also to wonder what kind of officer I myself proved to be.
I do not mean to suggest that I have nothing good to say about the community to which I belonged for 38 years. That is not so. Those who were fortunately untainted and blessed with the qualities of, say, honesty and diligence, mostly lacked initiative in their day-to-day work, and were incapable of getting out of the rut into which government service in Pakistan pushes all new entrants. They couldn’t see beyond their noses, and all they cared for were rules and regulations and precedents to follow.
And yet I came across some fine examples; officers who made people (including me) worship them as heroes. They were not all built in the same mould, and yet there was something common among them, an elusive quality in which it was not so much intellect that made them stand apart as the ability to respect even the lowliest of men. Their personality was centred around their heart and yet they were known as brilliant officers. Today I will talk about two of them because the impression they left on me was great indeed. Both are dead.
Zafrul Ahsan was an ICS from eastern UP, but not one of the thousands, that he helped as deputy commissioner of Lahore immediately after the horrors of partition, was Urdu-speaking; they were all refugees from East Punjab. (Isn’t it strange how the meaning of “refugee” has changed over the years?) It was a crowd that blamed Pakistan for their misery, and saw nothing grand about the new country. Zafrul Ahsan ran about like a mad person to provide them shelter in a house or a vocation in a shop.
Only some of them were grateful because they thought this was their right, others even abused him when they couldn’t get what they thought they deserved. He showed exemplary patience in carrying out his duty and sympathy for the sufferers. It was love for humanity all the way. An elected provincial government was in power, and everyone was doing his best for the refugees, but no one received the praise that Zafrul Ahsan did. No Punjabi officer could have matched his zeal.
Later, as an Information officer, I came to know him better as Chairman of the Thal Development Authority. The Thal was a desert in the western part of the province and the Punjab government was determined to make it suitable for agriculture and to colonize it. He achieved miracles there, just because he came to know every inch of the desert. I frequently took pressmen there, and everyone of them was amazed how Zafrul Ahsan drove about with them in jeeps when there were no roads and no other signs to serve as markers. They all loved him. Yes, hardboiled reporters loving a bureaucrat!
The hallmark of Zafrul Ahsan’s three years in Thal was pure initiative rarely found in government officers. Once a pressman asked him how he was able to satisfy the Accountant General who did not tolerate unorthodox ways of spending public money. I shall never forget his explanation. He said, “Whenever his office asks me to quote the rule under which I have incurred a certain expenditure, I write back asking them to quote the rule that prevents me from doing so. I hardly ever get a reply. I’m afraid the AG is very annoyed with me.”
The other bureaucrat whom I learned to admire greatly was Masoodur Rauf of the CSP whom I met for the first time in 1967 on his appointment as secretary, information, West Pakistan. The first thing that struck me was his cool attitude towards official work which went on without causing any tension among his subordinates. His doors were always open to visitors, and pressmen were particularly grateful to him for the way he came to their aid in trouble — private or official — and never talked about it.
As you know, the word CSP was almost written on the foreheads of its members. But I have known countless people who didn’t even know that Masoodur Rauf was from the “royal family.” A learned man of artistic taste, he was as much at ease with the head of state as he was with his own orderly. There was nothing artificial about him. His subordinates were never afraid of going to him even after committing major mistakes. In fact one of his noblest traits was that he believed in taking the rap for whatever happened in his department. I could write a book on him; he possessed qualities that placed him apart from the entire officer class in Pakistan.
Masoodur Rauf belonged to Peshawar city and had an unpretentious ancestral house there. For the weddings of his two younger brothers, he chose to have the valima there, despite advice (and admonitions) from all and sundry to hold it in a hotel or an open park where his numerous “distinguished” guests could come with ease. He was additional secretary in the federal government at that time. The style of the valima was typically Peshawari, with four guests eating out of one trencher. No fancy arrangements, for he was not bothered by complexes.
My wife and I tripped over drains to get to the place. He himself stood at the mouth of a narrow lane greeting his guests, while his German wife was at the door of the house conducting the ladies inside. I think this mode of the valima alone would place him on a pedestal all by himself. Most of his batchmates came from the same social class, but as officers they behaved as if they had been born and bred in a five-star hotel. A great man indeed.
Europe stunned
France’s emphatic rejection of the EU constitutional treaty is a stunning blow at a time when the continent faces grave economic problems and political challenges. Much comment in recent weeks has suggested that a no vote, while embarrassing, could be shrugged off, since the treaty of Nice will allow the union to carry on functioning.
But that misses the point that the constitution was agreed unanimously by 25 member states representing 455 million people from Helsinki to the Azores and from Nicosia to Warsaw. It represents a considerable investment of political capital and is a carefully-crafted compromise between different visions of the union, streamlining its functioning and boosting its clout in a world dominated by an unassailably powerful US.
Despite the dire warnings of eurosceptics, it sets limits on integration. Its defeat is very bad news for those who want a more coherent Europe punching at its weight.
The value of the euro dipped on foreign exchanges last week in response to signs that the nos were holding their lead. Americans, Chinese and Indians, vying for advantage in an interdependent world, will be able to get their way more easily if Europeans are in disarray.
Rejection by France makes the blow doubly painful. It is true that the reasons for the no victory seem to be less about the treaty itself than the country’s crisis over its place in an enlarged Europe, the failure of its political class and a reluctance to confront the challenges of globalisation.
But the vote marks an alarming retreat from its historic role as a keen European and motor of integration.
— The Guardian, London