Blair sees opportunity in crisis

Analysis
By Nick Assinder
Political Correspondent, BBC News website

The word "opportunity" litters Tony Blair's conversation - particularly when he is facing a serious problem.

Blair will make big speech to Euro MPs

So it will come as no surprise that he believes the current crisis in the EU offers him an opportunity, just as he takes over the six month presidency of the union.

Rather than spending the time from now until Christmas trying to rebuild alliances bitterly fractured in the recent summit and simply stopping the EU unravelling, he believes it offers a great chance for him to start a process of re-shaping the entire EU and push it in his direction.

His critics, however, believe this is taking optimism into near spiritual realms and that the prime minister will have his work cut out simply holding the EU together for six months let alone turning it around.

Mr Blair has long argued, as he did in a Commons statement on the summit, that Europe needs to change course to take account of globalisation and embrace the sort of liberal economics he has pursued in the UK.

In short, and to quote Britain's EU Commissioner Peter Mandelson, make the EU a bit more New Labour.

The prime minister also believes the "No" votes on the constitution in France and the Netherlands are a symptom of this desire for change amongst voters.

Wrong trees

He will underline this message in a speech to the European Parliament in Brussels later this week which will be part of the lead up to the start of his EU presidency on 1 July.

He is expected to claim he is out to create an "effective Europe" where free market economics are partnered with social justice.

Holding EU together is big enough task

And he is confident he already has the support of many of the poorer eastern European states who have only recently joined the EU.

His critics, however, believe he is barking up several wrong trees.

They say the EU is in crisis because, first, voters rejected exactly the sort of model they believe the UK favours - and quote the example that Britain is the only EU country to opt out of the 48 hour working week regulations designed to protect workers.

Second, they claim it was Tony Blair's Thatcher-style refusal to re-negotiate the UK's budget rebate that turned the row over the budget into a full blown crisis.

On the first, the prime minister will use his Brussels speech to reject the notion you cannot have both a market Europe and a social Europe.

He will point out that the UK has the minimum wage and extended maternity and paternity leave, for example.

Take revenge

And on the second, he will continue to insist he is happy to see changes to the rebate but only if the CAP is also up for grabs.

But, as he told MPs, this will not come during his presidency of the EU but in a following financial year.

The latter row has already infuriated many in Whitehall who believe it was an entirely artificial one, whipped up by French President Jacques Chirac to divert attention away from the fact he could not deliver a "Yes" vote on the constitution and was, as a result, responsible for killing it off.

Relations between Blair and Chirac at low ebb

But these UK rebate rows always work, just as it did this time, because most other EU states - including those recent entrants Mr Blair sees as new allies -believe re-negotiation of the UK rebate is long overdue.

The prime minister told MPs the budget reforms would, however, take time because it should not be the usual "cobbled together compromise in the early hours of the morning".

That phrase brought gasps from the Tory benches who believe the prime minister has let the cat out of the bag about how the EU really operates.

And it will probably do little to pour oil on the waters in the row between the UK, France and others in the wake of the failed summit.

Meanwhile, there is also the prospect that Mr Chirac, still seething at the prime minister's refusal to give ground, will attempt to take his revenge at both the Blair-led G8 summit later this year, and during the prime minister's EU presidency, blocking effective progress.

Most leaders would probably agree this is not the ideal time to take over the presidency of the EU, even worse when you are approaching the end of your premiership at home.

But whatever the background, this is one crisis Tony Blair is determined to turn into an opportunity.