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LOOKING AHEAD
27.02.2009

February 21, 2009 (the date of publication in Russian)

Grigory Tinsky

WILL THE EU INTEGRITY SURVIVE THE FINANCIAL CRISIS?

The nations of "new Europe" will have to forget about French and German investments

THE SECRET TALKS OF SARKOZY AND TOPOLANEK

The Czech Republic's chairmanship in the European Union, starting from January 1, 2009, did not suggest any critical political changes, as this author had foreseen in the article "The EU is Facing Geopolitical Paralysis" (read here in Russian). However, the skill of forecasting includes also the ability to explain while forecasts don't come true. The problem is that French President Nicolas Sarkozy was then deliberating his own prospects. He was too accustomed to the role of a global leader to give up this status in the times of the "Czech calm" that he viewed as improper for the proud sails of the European ship. Moreover, he undertook special efforts to retain his influence two months before the end of France's term.

In the end of January, Prague was shaken by an unprecedented scandal, uncovering the European reality as pictorially as Titian in his 1562 painting. Most unusually, the Czech Security Office decided to fine the Foreign Ministry of the same country. This symbolic forfeit of 77,000 korunas (around €2000) was imposed on the Ministry for the leakage of secret talks that had taken place between Czech Prime Minister Mirek Topolanek and French President Nicolas Sarkozy on October 31, 2008. Dusan Navratil, head of the Security Office, claimed that the fine is in fact "didactic".

The secret talks, held in Palais Elysees during dinner, were focused on transition of chairmanship duties from Paris to Prague in January. The audiotape reveals that Mr. Sarkozy was trying to convince Mr. Topolanek to avoid intervention in the Middle East conciliation talks, and to secure the leading role of France in this process.

"You just don't imagine what it means to face down all these Arabs, talking simultaneously to Lebanese, Algerian, and Egyptian leaders who hang on your phone all time. They are so hideous", Sarkozy's voice complained.

The published record makes clear that Sarkozy offered Topolanek to take charge of the EU Eastern Partnership Program, scheduled for 2009-2011, in exchange for securing France's leading role in the Mediterranean Union – Sarkozy's favorite brainchild. The French Foreign Ministry expressed its indignation with the ungentlemanly behavior of the Czechs, but did not refute authenticity of the audiotape.

 

A RACE FOR SURVIVAL: GOING ROUND THE BEND

Sarkozy's Bonapartist manners have already embarrassed the 27-member EU community. In the situation of the global financial crisis, the political race for leadership was multiplied to the economic race for survival.

In December 2008, it still seemed that hard times were rather consolidating the EU ranks. Using the opportunity of chairmanship, Sarkozy convened one summit after another, and his popularity was increasing not only in France. He managed to achieve concord with British Prime Minister Gordon Brown, who seemed to be the only head of government to grasp the hidden wires of financial markets. Even Belgians, who replace their Premiers especially often, were then satisfied with the intervention of Premier Yves Leterme, who managed to rescue the leading banks of his country from an inevitable bankruptcy.

By today, the situation radically changed. The European voters realized that their governments were not going to be saved from recession and increasing unemployment. Protest waves splashed out into the streets of European cities. Massive riots in the capitals of Greece, Latvia, Lithuania, and Iceland demonstrated that tolerance of the population is not boundless. In late January, a large-scale protest action was organized by French trade unions. Massive strikes with protests against layoffs erupted in a lot of British towns.

In January, the personal rating of Nicolas Sarkozy sank to the all-time low of 36%. With Brown, it was even worse: losing 20% since November, his popularity did not exceed 32%. The irony of Brown's situation was in the fact that being an educated economist, he warned about menaces of "boom and bust" yet in his capacity of Minister of Finance in Tony Blair's government. Now, he has to bear responsibility not only for his Prime Minister's term but for a longer period.

Spain's Premier Jose Luis Zapatero is catastrophically losing support in the coalition of regional parties, with a perspective of collapse of the government, while Belgium's government of Yves Leterme has already fallen in the midst of the scandal around salvation of Fortis Bank followed with a chain of financial abuse by major shareholders.

 

PROTECTIONISM INSTEAD OF PAN-EUROPEANISM

Losing support from their voters, governments of European states frantically try to save the sinking popularity for expense of the rest of Europe. This phenomenon was pioneered by the decision of the French government to support only those auto producers that promise not to slash jobs in the country, which was interpreted as stimulation to close plants in other EU states.

In his February 5 TV address, Sarkozy literally declared, "In case we issue loans for auto producers, this does not mean that next day, they tell us they are opening a new plant in Czech or somewhere else".

These words evoked a furious reaction from the office of Czech Premier Mirek Topolanek. "Sarkozy's statement is intolerable", he said to Hospodarske Noviny. "If anybody was going to undermine ratification of the Lisbon Treaty by the Czechs, he could not choose a more convenient way and timing!"

The split of the Czech establishment on the issue of ratification of the new European constitution had already aroused serious tensions in Europe, culminated in a scandal during a visit of a group of EuroMPs to Prazski Hrad, Vaclav Klaus's residence. On the eve of the vote in the Parliament, expected on February 17, Sarkozy's remark sounded especially inappropriate.

In his comments, Leszek Balcerowicz, the "father" of Polish reforms, stated: "France is undermining the European unity it had always fought for. It is impossible to integrate, at the same time violating the principles laid in the Union's foundation. The nations of Central Europe will never excuse Jacques Chirac for his remark that the new members have not used their opportunity of "sitting still" (during the US intervention in Iraq). Sarkozy may enter European history in a similar way".

Sarkozy's protectionism induced European leaders to convene an informal summit supposed to overcome the political misunderstanding that threatened, in combination with the financial crisis, to destroy the European Union's international prestige. Debates over the ways of combating the crisis may predetermine the distribution of key posts in the EU bureaucracy. In the end of this year, the European Commission is to select a new chairman, and after the Lisbon Treaty comes into force, also the president and the chair of the diplomatic office. Until recent time, the re-election of Jose Manuel Barroso seemed practically unchallenged, but the described conflict put him in a precarious situation: refusing to protect Paris's protectionist approach, he will lose support from Paris, and in the opposite case, his candidature will be rejected by other nations of Central Europe.

Antonio Missiroli, chief analyst at the Brussels-based European Policy Center, emphasizes that Barroso is in a very complicated situation today. "He is under huge pressure. The French are testing him for the extent of influence he is going to allow them. In the period when politicians start fighting for posts and EU institutional borders will be outlined very vaguely, it is going to be extremely hard to make adequate anti-crisis decisions".

The most stable situation among Central European states is today in Germany. Public polls indicate that in the elections that are going to be held in seven months, Angela Merkel will receive a mandate for establishing a one-party government, getting rid of the unhandy coalition with Social Democrats. Her increase of popularity is built upon protectionism. Berlin categorically refuses to invest in all-European (including energy) projects, preferring to save money for the national budget.

According to Missiroli, politicians are doing their best to demonstrate their commitment to rescue their voters from the implications of the economic crisis. This desire undermines the principles of European solidarity and integrity. France has started this game, and the rest have similar intents. It is unclear whether the menace of disintegration can stop them".


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