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Last Updated: Thursday, 16 June, 2005, 01:32 GMT 02:32 UK
EU: What kind of club?
By Paul Reynolds
World Affairs correspondent, BBC News website

Tractor at work on farm
EU: Britain ploughs lonely furrow

The European Union summit in Brussels this week is unlikely to resolve the twin issues currently facing Europe - the future of its proposed constitution and the imbalances in its budget.

If Rome was not built in a day, the EU will not be saved in a summit.

On the constitution, the only common ground seems to be a feeling that the best action would be inaction.

On the budget and the rebate, there is still plenty of time before the next budgetary period begins in 2007. And while there is time in the EU, there will be talk.

It is important to distinguish between the two problems.

The first is existential. What kind of EU should there be in the future?

The second is technical and political. The size of the budget has to be set. There will in due course be a compromise. The British problem - the unusual disparity between its contributions and payments - has been solved before and will be again, though not quickly and not easily.

Chaos

The far more fundamental issue is that of the EU itself. "Ever closer union", once the rallying call, is giving way to ever wider chaos.

For the EU as an organisation, this is undoubtedly a crisis, though for its critics, of course, its problems are not a cause for concern but for celebration.

Governments and factions are pulling in all directions. Liberalisation, social protection, repatriation of powers - all these causes are pressed.

'Ever closer union', once its rallying call, is giving way to ever wider chaos

The new members from Central and Eastern Europe who have come in with such high hopes must suddenly be wondering what kind of club they have joined.

"Democracy" was their great motto during the struggle in which they burnt the towers of communism.

And yet it is the democratic deficit that is now being identified as a missing factor in the constitution drawn up to ease their entry and bring the institutions closer to the people.

The old guard still seems unaware of this. It is startling for example that Valery Giscard d'Estaing, the grandee who chaired the convention that wrote the constitution, now says it was mistake to send a copy of the 448-page document to every French home.

He told the New York Times that he had begged President Chirac not to do this. "It is not possible for anyone to understand the full text," he pronounced.

A constitution that depends for approval on not being read surely cannot expect to be given approval.

Yet this is not open to easy answers, because the "peasants' revolt" in France and the Netherlands made conflicting demands. Some wanted more Europe, some less.

The common factor though was alienation, and the common answer will have to be reconnection.

In the European Parliament, the Socialist Group's spokesman on the constitution, British MEP Richard Corbett, has suggested that a new convention should be held.

"An IGC [an inter-governmental conference] alone would not be good enough: it would give the impression of returning to the old ways of secretive, diplomatic negotiations. A public and pluralist convention, with greater input from civil society, would be much more helpful in this respect, and it would certainly generate far more interest than did the previous convention," he says on his website.

Rebate

As for the UK rebate, the British will not negotiate without unpicking the Common Agricultural Policy, which the French will not touch. So deadlock looms.

The man who negotiated the rebate in the first place, Sir Michael Butler, who was UK representative to the then European Community, says he is not surprised or worried that Britain is isolated: "That was the case up to 1984. Every week my fellow representatives said we were isolated and could not hold out - we did. I pointed out that they had an interest: if we paid less, they would pay more."

Sir Michael, who is a member of the board of Britain in Europe, supports the stand of the Blair government but says that a solution lies in a system in which net contributions and gains would be relative to a member state's population and wealth. This would override budgetary payments, diminishing the effect of the CAP.

The European Commission has in fact put forward a proposal for a "general corrective mechanism" but admits that Britain would end up paying the largest net contribution, of 0.51% of its gross national income, compared to 0.33% for France.

On the other hand, it also points out that if there is no change, the UK will become the smallest net contributor.

Every week my fellow representatives said we were isolated and could not hold out - we did
Sir Michael Butler

There is also the unfairness, as the EU Trade Commissioner Peter Mandelson has pointed out, of the new and poorer member states actually paying towards the British rebate.

In 2005, these payments range from three million euros for Malta to 163 million for Poland. Among them, the 10 new members will pay 253 million euros to Britain this year.

The British government might make a gesture by refusing to accept these payments. But that would be first-aid on the wound, not full recovery.




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