Yet again the eurozone crisis is butting heads with national democracy

After a lengthy absence Portugal returned to the headlines over the weekend with the Constitutional Court ruling that some of the government austerity measures were unconstitutional. Here are the key details:

• The court found that four out of nine key savings measures included in the government’s latest budget were unconstitutional. These measures focused on cuts to public sector wages and pensions – the court deemed these unconstitutional since they hit public sector workers disproportionately hard. They also ruled against cuts to unemployment and sickness benefits.
• The measures amount to savings of €1.3bn (0.8% of GDP) which will now need to be found elsewhere. If they are not found, then Portugal’s deficit this year could reach 6.4% rather than the 5.5% currently targeted.

What does this mean for Portugal and the eurozone?

• The ruling was the cherry on top of a bad week for the government after a close ally of Prime Minister Pedro Passos Coelho resigned and the government faced a no-confidence vote in the parliament. Fortunately, it has so far survived these problems (new elections would bring huge uncertainty) but its support continues to be eroded.
• The previous political consensus in favour of the bailout and the accompanying austerity has now vanished, the opposition is likely to become increasingly vocal in its anti-austerity approach.
• The Commission has warned that the extension of the bailout loans agreed recently will be under threat if the government does not meet its targets.
• The cuts are likely to be found elsewhere but they may have more of a negative impact on growth, although this remains uncertain. One thing that is clear is that the public sector wage and pensions do need to be adjusted if Portugal is to become competitive and particularly if it is to recover through export led growth as the bailout programme currently targets. The inability to adjust these areas could harm Portugal in the long run.
• That said, this is not the first time this has happened. Last July, the court made a similar ruling on public sector wage cuts. The fact that this has happened again suggests the government may be struggling to find savings elsewhere (why else push on with cuts it knows stand a good risk of being blocked), and doing so may take longer than some expect.
• Legal points aside, experience (particularly in the Baltics) suggests that wage cuts in the private sector often follow or go hand in hand with public sector ones – at the very least, buy-in is needed across the economy and the private sector is unlikely to lead such an adjustment unless prompted to (wages are sticky on the downside). In this sense, although the cuts may have disproportionately hit public sector workers initially it may be necessary part of the internal devaluation approach taken (whether this approach is correct or not is another question).
• And of course, this adds further delays and uncertainty in the eurozone – along with lack of government in Italy and capital controls/bailout in Cyprus.

This is likely to rumble on for a while yet as the Portuguese government searches for savings elsewhere which will meet the requirements of the troika. Yet again, the eurozone crisis is butting heads with national democracy, in this case specifically constitutionality. Plenty more of that to come we expect.

Pushing the limit

In the early hours of this morning, Spain's ruling Socialist party, PSOE, and the conservative opposition, PP party, brokered a deal on amending the constitution to include limits on public deficit and debt. An idea that was pushed by Germany and France just last week.

The very fact that the opposing PSOE and PP have managed to agree to something as big as a constitutional change in the space of just a few days is indicative of the depth of the economic problems facing this peripheral member state. The speed of the deal also demonstrates that Spain is committed to dealing with the economic crisis head on.

Despite widespread reports yesterday that the PSOE had "serious" divisions over the amendment, the deal looks to have been reached with substantial political support. All autonomous communities, except Andalucia, said they would support the amendment yesterday, despite entrenched economic problems and a joint deficit of more than €13bn. This isn't necessarily a surprise considering that the PP now hold the lion's share of autonomous communities' seats, and as leader Rajoy likes to point out, the PP has been calling for a deficit limit for quite a while.

The constitutional amendment will not fix limits itself, but will be accompanied by a law limiting the structural deficit at 0.4% of GDP from 2020 (the 0.4% limit breaks down into 0.26% for the central government and 0.14% for Spain's regional governments). This is far stricter than the mooted 3%, which was rumoured to be the target level over the past week (in line with the original Growth and Stability Pact). The amendment also comes with a rather interesting get-out-clause, as it allows deficit limits to be overridden in cases of natural disaster, economic recession or other exceptional circumstances.

This undoubtedly gives any future government significant scope to suspend the limit, as long as it can count on an absolute majority in the Spanish Parliament. Add in the fact that the specific levels which the limits are set at are enshrined in law rather than in the constitution directly (making them much easier to amend), and the proposal begins to look more like a gesture to Germany and the ECB than a substantive shift.

While political support for the measure has been strong, it's certainly not universal. Many have argued that a constitutional change shouldn't be made in such a small period of time and without the consent of the people. It's only the second amendment made to the constitution since it was written in 1978 after the fall of Francisco Franco's dictatorship.

Spanish unions and the United Left coalition yesterday threatened to mobilise calls for a referendum and said they would put the constitutional change at the heart of their election campaigns. If twitter is anything to go by, this could be a popular move. Following the announcement on Tuesday, the public turned to twitter to call for a referendum as #yoquierovotar (i want a vote) trended. The next day the second biggest left-wing daily Público led the calls for a referendum (pictured above).

Despite this, neither PSOE nor PP have even publicly contemplated the idea of a referendum. Now that a formal proposal has been made, Parliament will vote next Friday, and it will go to the Senate the week after. In both chambers it needs a three-fifths majority.

Even though introducing the debt and deficit limit is a positive move and should gain Spain some leeway with the markets, it doesn't change the fact that the problems that led Spain to this point were not ones of massive public debt or deficit but a huge real estate bubble, excessive private sector debt (both leading to banking sector troubles) and a decade of lost competitiveness.

Arcane Parliament

PA informs us that following the final ratification of the Lisbon Treaty in the UK, the implementing legislation will be printed... on goatskin.

"Parliamentary officials confirmed later that a goatskin version of the EU Amendment Act would be prepared, and kept in the UK.

The practice of Acts of Parliament and other important documents being printed on vellum has existed since the 15th century. Both Magna Carta and Charles I's death warrant were produced on skin parchment.

There have been several efforts over recent decades to move to paper records, which would be less expensive and potentially save the lives of several goats a year.

They have been successfully resisted by traditionalists."

With these plans out in the open, it's suddenly becomes clear who the first victims of Lisbon will be..

Why UK justice safeguard cannot be watertight

In the House of Commons yesterday Frank Dobson MP raised the "injustice" done to one of his constituents, Joseph Mendy, under the provisions of the European Arrest Warrant. Mendy was arrested in the Canary Islands in November 2003 on suspicion of counterfeiting €50 euro notes despite the fact he was never found in possession of a counterfeited note. He and his friends were released and heard nothing more from the Spanish authorities until March this year when he was served with a European Arrest Warrant. Mendy appealed the extradition but as Dobson stressed, "this involves the UK courts doing nothing more than going through the motions, because there are virtually no grounds on which to challenge a European extradition warrant."

Dobson continued:

"At the subsequent court appearance in Madrid, Joe Mendy was denied bail on the bizarre grounds that he was a flight risk. By this time, the Spanish judicial holidays were commencing, so my innocent constituent of exemplary good character was held in the Spanish jail over the summer." "After spending almost two months on remand in the Spanish jail, Joe appeared before a Spanish judge on 15 September. His Spanish lawyer advised him that if he continued to plead not guilty, he was likely to be held in jail for at least a further year before his case came to trial. If, however, he pleaded guilty, he would, because of his exemplary record in Britain, get a suspended sentence and a small fine. Understandably in such dreadful circumstances, he pleaded guilty and got a two-year suspended sentence and a €600 fine."

"The treatment of Joe Mendy is a disgrace; it is exactly the sort of incident that brings European institutions into disrepute. What happened to the warrant between June 2004 and March 2007? Was it mislaid? Sadly, the law that we passed does not require the authorities to use their common sense or to have a sense of proportion. Having being passed by the House on the argument that it would speed up extradition, our law does not demand that the authorities proceed expeditiously. Instead, it demonstrably permits them to take nearly four years to crank up this draconian machinery."

Home Office Minister Meg Hillier responded saying:

"We have to have faith in our European partners, and there are safeguards in place to ensure that each European country has a proper legal and judicial process to take such decisions. We have heard that Mr Mendy’s case has been concluded and that he is back in the UK having received a suspended sentence. I am pleased to hear that he can now start at Liverpool University next year and begin to get his life back on track."

It goes without saying that this is a totally unacceptable outcome for a system that was originally intended to expedite the fight against serious organised crime and terrorism.

Sadly, it is likely that this case is far from unique. As leaked Commission documents revealed this summer, EU Arrest Warrants (EAWs) have been frequently issued for trivial crimes - including the theft of two car tyres, and a single case of piglet rustling. The EU report admits that the arrest warrants are being used "disproportionately" to the seriousness of offences.

It is clear from this case that serious inconsistencies in standards can arise between different legal regimes across different member states. But this sits uneasily with the basis of the EAW: judicial mutual recognition. For this reason, it is almost certain that we’ll hear increasing calls for legislating for EU-wide criminal procedural standards – in other words, the problems arising from mutual recognition creates the impetus for full harmonisation.

The revised EU Constitution provides the avenue for such harmonisation, with the dropping of national vetos in justice and home affairs. It is unlikely the UK will be immune from these developments, despite the Government’s claim to have an ‘opt-in’ arrangement in this area.

In short, the nature of the UK ‘safeguard’ on JHA puts a gun to the head of the Government if it wishes to opt out of future developments based on existing legislation which already applies to the UK, like the EAW. If the UK doesn’t want to accept the amending legislation to something like the EAW, then it will be thrown out of participation in that legislation in its entirety.

Given current the current security situation, it is highly unlikely that the UK Government would be prepared to give up any form of agreement with other member states on extradition, such as the EAW. It would therefore be highly problematic for Britain not to opt-in on measures amending the EAW.

If, as seems probable, the EU does choose to move towards criminal procedural harmonisation in order to address the issues raised by cases such as that of Joe Mendy, it would be unlikely the UK could in practice exclude itself from such moves under the revised Constitution.

Should the Constitution be ratified, existing UK participation in European extradition agreements will be a powerful lever to force the UK to opt in on future EU justice and home affairs legislation.

Europe minster grilled on the charter

Jim Murphy, the new Europe Minster, made his first appearance at the European Scrutiny Committee today. The general consensus that it wasn't too impressive. To be fair to him, the issues he was discussing - such as the revised Constitutional Treaty - are pretty complicated. But we would have expected him to have got his officials to brief him thoroughly on the really tricky points - such as the Charter - especially as the legal advice to the committee was leaked to the Telegraph.

After negotiating the new EU Constitutional Treaty Tony Blair told parliament that “Nothing in the Charter creates justiciable rights applicable to the United Kingdom.”

But the MPs on the scrutiny committee weren't convinced. They pointed out that the text of the UK's opt-out reads: “nothing in [Title IV] of the Charter creates justiciable rights applicable in the United Kingdom.”

They asked Murphy whether this meant that everything else in the Charter was justiciable in the UK? Murphy failed to answer the question.

He struggled to explain the meaning of the opt-out and failed to back up Blair’s argument that this will not be justiciable in the UK. He could only say that the Charter “doesn’t create any new rights.” He was asked over 10 times by MPs to give a straight answer “yes or no” to the question but he failed to do so –much to their irritation. Instead he repeated that “the legal advice that we have had is that this charter brings in no new rights.”

Jim Murphy’s failure to answer this question on the Charter only strengthens the growing consensus that the UK opt-out is not worth the paper it is written on. Jacques Ziller, a professor at the European University Institute in Florence, has said that the idea of one country opting out of the charter was “nonsense” and would quickly be challenged in the courts. The Guardian has reported that, former EU Justice Commissioner Antonio Vitorino has questioned the legal basis for the British opt-out and the Commission’s legal experts expect that the British opt-out will be tested in the courts.

Murphy's case wasn't helped by the fact that he was forced to defend Margaret Beckett's lie that there had not been any negotiations on the treaty until a couple of days before the summit.

He made a distinction between "discussions" and "negotiations". When it was pointed out that Government advisers had begun work on the treaty back in January he claimed that “There’s a difference between negotiation and conversation”. He argued that because no draft was on the table back then they were not negotiations.

The advisers - he said - were simply asked to "explain the UK's concerns and priorities" for the new treaty. Seemingly contradicting Beckett's definition of negotiations:

"To my mind the process of actual negotiation begins when you are invited to set out your core demands."

The MPs were not happy. Even the Labour chairman Michael Connarty - sensing he was being "had" - began ripping into him . Not the best debut performance we've ever seen.

proper names

Isn't there something a bit peculiar about this sentance:

"The Union Minister for Foreign Affairs will be called High Representative of the Union for Foriegn Affairs and Security policy"

It might - to the uninitiated - suggest a rather cynical approach, based on not calling things what they really are.

In fact the IGC mandate is absolutely festooned with instances in which the main text says one thing and the footnotes (mostly non-legally-binding sops to the Brits) say another. The mandate is now up on the web in the European Council conclusions.

They say that the IGC will start at the end of July and is supposed to wrap by the end of the year so that the new constitutional treaty can be ratified and in force before the next European elections (indeed, its the proximity between putting the Constitution through parliament and those elections that might prove tricky for Brown).

Its quite interesting to look at the heat and light generated by the talks on the new constitutional treaty in comparison to the day to day activity of the EU, as summed up in the rest of the Council conclusions. For example these conclusions note that, "The European Council reaffirms its commitment to realising, as part of the comprehensive European migration policy, the Common European Asylum System by the end of 2010." Very few lobby journalists in Britain even realise that this is happening, and still less has been written about it.

Its that gradual "competence creep" that makes the proposals in the IGC mandate for a
"simplified revision proceedure" so alarming. If the treaties can just be gradually amended, and further vetoes given up without a new treaty then things will just happen gradually, below the radar, with no scrutiny and no input from the public.

Perhaps that is what Gordon Brown will rip out of the text. He will certainly wait to see what emerges as the biggest point of concern - and then get it taken out.

As it stands, the proposal is sinply just to implement the whole EU constitution as a series of amendments to the existing treaties. That's no good for Brown. He needs blood on the carpet. His spinner has already briefed everyone about how he slapped down Blair over Sarkozy's demands. Next he will want to be able to arge that he has brutally "defeated" Sarko or Merkel on something. They have probably already agreed over a good dinner about what it will be.

Pull the other one!

The Government is literally all over the place on the revised Constitutional Treaty. It's difficult to keep up with the multitude of different positions they've had - of which the latest Brown-Blair "rows" are just the latest example.

As Lord Owen wrote in the Evening Standard yesterday "We need to hear again the convoluted illogicality of how our diplomats explain why constitutional changes were thought not to need a referendum in 2003, then how a referendum was promised in 2004, even if the French or Dutch voted no, only for the pledge to be withdrawn and replaced with the promise of a referendum in the 2005 general election - only in 2007 for Blair to say no referendum once again. Perhaps Gordon Brown will have enough sense to realise that the British people cannot be treated with contempt like this."

If that is the case, no-one seems to have told the Prime Minister's spokesman. At the press briefing yesterday afternoon he claimed that there was no need to hold a referendum this time because the name had been changed and the flag and anthem were being deleted.

According to the Downing Street website:

"Asked what it was in 2005 that required a referendum, and what were the elements of the constitution, the PMOS replied they were elements such as flags, national anthems, etc."

Which is funny, because we're sure there were some more important elements in the Constitution than the flag and the anthem... The EU President and the EU Foreign Minister perhaps?

As someone from the Commission helpfully told Le Figaro yesterday:

"It’s no great loss! The European flag already exists anyway..."

Merkel memo full text

Introduction

This report from the German presidency is a response to the mandate which was given it by the European Council at its meeting in June 2006. As requested at the time, the Presidency, in the light of very extensive consultations held over the last six months, provides an assessment of the state of discussion with regard to the treaty reform process and explores possible ways forward.

After two years of uncertainty, following the problems encountered in the process of ratification of the Constitutional Treaty, it is clear that there is now a general desire to settle this issue and move on. All Member States recognise that further uncertainty about the treaty reform process would jeopardise the Union’s ability to deliver.

Settling this issue quickly is therefore a priority. This was agreed when Heads of state and Government, together with the President of the European Parliament and the President of the Commission, met in Berlin on the 25 March to celebrate the fiftieth anniversary of the Treaty of Rome. All were united in the aim of placing the European Union on a renewed common basis before the European Parliament elections in 2009.

The way forward clearly needs to take into account the concerns expressed by citizens during the ratification process on the future direction of the European Union and the effects of globalisation on its core values and policies. At the same time there is a very strong demand for the Union to increase its efficiency, to enhance its democratic functioning, and to improve the coherence of its external action.

Overall assessment

In line with the mandate given to it in June 2006, the Presidency has conducted extensive bilateral consultations with the member states as will as the European Parliament, both at the level of designated “focal points” and between the President of the European Council and her opposite numbers. In addition to these bilateral contacts, the Presidency organised a meeting of “focal points” in Berlin on 15 May, and a further meeting is due to taker place on 19 June. Foreign Ministers have also had the opportunity to take stock of developments at meetings of the General Affairs and External Relations Council.

These consultations have proved very useful in giving the Presidency a clear idea of the various concerns of individual member states.

The issues raised during the consultations can be grouped into a number of themes:

A different approach on structure

A certain number of Member States underlined the importance of avoiding the impression which might be given by the symbolism and the title 'Constitution' that the nature of the Union is undergoing radical change. For them this also implies a return to the traditional method of treaty change through an amending treaty, as well a number of changes of terminology, not least the dropping of the title ‘Constitution’.

"Such an approach is not incompatible with the demand from those Member States which have already ratified, that as much of the substance of the Constitutional Treaty as possible should be preserved. They are ready to consider the alternative method of treaty change... They have made it very clear however that this would represent a major concession. They insist on the need to preserve the substance of the innovations agreed upon in the 2004 IGC, and to ensure as far as possible the readability and simplicity of the new Treaty.

Reinforcing the capacity of the Union to act, whilst preserving the identity of the Member States

It is generally recognised that a strengthening of the institutions will help reinforce the capacity of the Union to act, and that the Union therefore has every interest in ensuring that the current Treaties are adapted in order to introduce the set of institutional reforms agreed in the 2004 IGC.

At the same time, there is concern to underline the respect for the identity of the member states and to introduce greater clarity over the delimitation and definition of competences of the Union and the Member States. Furthermore there I a clear demand from some delegations to further enhance the role of national parliaments.

Some delegations have requested that the text of the Charter of Fundamental Rights be removed from the Treaty. Others strongly oppose this move. Most of the latter could however accept it, provided that the legally binding character of the Charter is preserved by means of a cross-reference in the body of the Treaty.

Addressing other concerns

A few delegations have suggested that in several cases the text of the treaties should be amended in order to reflect more recent developments. Many delegations would be ready to examine such amendments if considered helpful by others and provided that no new competences are conferred upon the Union. Specific suggestions include the need to address energy security and climate change. It has been proposed that greater prominence should be given to the “Copenhagen criteria” on enlargement

The way forward

On the basis of its assessment of the positions of different delegations, the Presidency recommends that the June European Council agree to the rapid convening of an IGC. It suggests that the European Council give a precise and comprehensive mandate (on structure and content) to the IGC, thus allowing it to complete its work on a nww treaty by the end of the year.

The Presidency proposes a return to the classical method of treaty change. The IGC would therefore be asked to adopt a Reform Treaty amending the existing treaties rather than repealing them. The Treaty on European Union as modified would keep its present name, while the Treaty establishing the European Community would become the “Treaty on the functioning of the Union”, containing all the detailed implementing provisions, including the legal bases. Both treaties would have the same value. The Union would have a single legal personality.

The mandate for the IGC should set out how the measures agreed in the 2004 IGC with a view to a more capable and democratic Union should be inserted into the Treaty on the European Union and the Treaty on the Functioning of the Union. The consultations over the past 6 months show that a number of changes will be needed to reach an overall agreement. To that end there should be further discussions with regard to the following issues:

- The question of the symbols and the primacy of EU law

- Possible terminological changes

- The treatment of the Charter of Fundamental Rights

- The specificity of the CFSP

- The delimitation of competences between the EU and the Member States

- The role of national parliaments

Conclusion

The Presidency submits this report to delegations as a basis for reaching agreement on the way forward at the European Council on 21-22 June 2007.

Blogging about

After our first posting on Conservative Home on Monday one cynical commentator questioned whether we'd become an extension of the Tory party.

No doubt the same reader will accuse us of joining up to Labour because Neil has written a piece on the Guardian website today...

For those of you who aren't avid Con Home readers, here are our posts from Tuesday (on the Government's red lines on the new Constitution) and Wednesday (on why the treaty would be bad for business).

Constitution debate hots up

Blogging is likely to be a bit light on this site for the next week, but we will be putting up a series of posts on Conservative Home on the revised Constitutional Treaty.

Check out the first installment here.

She lied and lied and lied (we're not exaggerating)

It's often said that one of Tony Blair's best assets is his skill at acting. The feigned sincerity, the lump in the throat and -of course- the comedy mockney accent - y'know.

Margaret Beckett's performance in front of the EU scrutiny committee yesterday suggests that his legacy will survive after all when he steps down.

The session began with the Labour Committee Chairman - Michael Connarty - saying that the current negotiations on the EU Constitution were taking place against a "background of non-transparency". This, claimed Beckett, was Berlin's fault. It is the way they wanted to conduct negotiations. Nothing she could do about it.

She then denied that the questionnaire that Merkel had sent to every EU government had any importance ( the letter which set out how they would make "presentational changes... without changing the legal substance" of the Constitution). She said it had “not played any real part in the discussions” on the new treaty.

When asked to give a bit more detail on these discussions she argued -puzzlingly -that there hadn't been any. "Nothing that you could really call negotiations has taken place."

She told MPs that the idea that the Constitution was being resurrected had been made up by the media. She declared that "There is nothing on the table" and that other countries were "in denial" about the Constitution's rejection.

When Bill Cash dared to suggest that she might not have a firm grip on the negotiations, she replied tersely “It’s not that I don’t know what’s going on, it’s just that nothing is going on”.

She carried on: “I’m afraid Mr Cash, you say to me ‘We know there are party-to-party negotiations”. There are not. There have not been. There has been a process whereby member states are occasionally invited to give some views. There have not been negotiations.”

Cash: “So there is something going on” Beckett: [shouting] “There is nothing going on”.

She even refused to be drawn into whether she would support individual proposals from the old Constitution. “Until it is clear that a proposal is being but forward and in what form I will reserve my comments until something is practically proposed. And at the moment nothing is proposed.”

But then the cracks started to appear. First she confused her own interests with the interests of the country as a whole - “I believe it is very much in the interests of those who wish to see British national interests protected and preserved that we do not carry out our negotiations in public” [pause] “Especially when they haven’t started”.

Michael Connarty asked what the sherpas (envoys sent by each country's PM to agree a framework on the new treaty) were discussing.

“Not very much”, she replied as she glanced to her advisers knowingly. She stumbled on: “I accept. I do accept... I know that the committee... I’ve read all manner of things, a number of fascinating articles about the negotiations that are no doubt going on. How the sherpas are beavering away, there will be a text here with brackets." [opening her arms in a dramatic Italian-style gesture while shaking her head] "No."

Then the plot thickened. The reason she couldn't answer any of the committee's questions was that it would make it easier for her to negotiate that way.

“The less I say about what we might in principle accept, and what we might not, the more I preserve the maximum amount of negotiating space to resist anything that I think is not in Britain’s national interest." She added: "we're not going to negotiate in public" (why did you show up then?)

"I appreciate that is unsatisfactory for the committee and I apologise to you for that. But since we are so much in uncharted waters of knowing what may be proposed. The more I say 'we can live with this, we can’t live with that', the more I’m giving away from my negotiating strategy. Which I’m always deeply reluctant to do.”

But she was happy to talk about the parts of the negotiations the Government are happy with. She said the Government could "live with" changes to the voting system and that she would “have sympathy” with proposals to introduce the subsidiarity mechanism from the old Constitution.

She even said it would be “unwise” to add things such as Copenhagen criteria (restricting future enlargement) , as well as clauses on energy and climate change.

The MPs were feeling frustrated. James Clappison said that he was going to ask for her view on the proposed EU President, "but I think I can make an educated guess about what the answer’s going to be”. The Foreign Secretary agreed - he has guessed right that the lady wasn’t for talking.

The whole performance was nicely summed up by her response to Richard Younger-Ross' assertion that there was nothing MPs could do to influence the Government in the negotiations and that the new treaty would be presented as a fait accompli.

She just shrugged her shoulders and looked away ... we wonder if she really has a place in the new 'humble', 'listening and learning' era of politics which Brown has promised...

Meanwhile, while the Foreign Secretary was insisting that the negotiations were "frozen", elsewhere Nicolas Sarkozy was announcing that, "Tony Blair and I have just agreed on what might be the framework for a simplified treaty. " Which doesn't sound very frosty...

The whole thing was like a piece of performance art: 60 long minutes of straightforward, in-your-face refusal to answer any questions. It made the famous Michael Howard Newsnight interview look like an excercise in open government. The only consolation, perhaps, is that soon all ministers will be touring the studios, having similarly difficult interviews, as they attempt to explain why the Government has broken its promise of a referendum. Now that will be fun to watch.

fancy footwork

Jonathan Freedland has an interesting piece in the New Statesman on Brown's foreign policy.

On Europe, we have had several glimpses of the shape of things to come. Brown's impatience at finance ministers' meetings, and his derailment of British membership of the euro, suggest a sceptic. He loathes the Common Agricultural Policy, a piece of protectionism that cannot be defended in an era of global free trade. With the French and the Germans now talking of resuscitating the corpse of an EU constitution, reclothing it as a treaty, a collision seems likely. Brown would not want to rouse the ire of the Eurosceptic press by driving such a treaty through parliament; but nor could he risk submitting it to a referendum that he could lose. Expect some trademark footwork to get this booted into the long

All very well - but does Brown really have the guts to crash the talks? In one sense it wouldn't be too hard. The Czechs and Poles are having constant high level President-to-President dinners, and seem to be more serious about the voting weights issue than a lot of people realise. However, without some kind of big country ally, both will probably fold in return for concessions. Blair will leave them to twist in the wind, but there is certainly an opportunity for Brown to hold up the talks... if it's not too late when he takes over.

Still, it seems more likely that Brown wil go with Plan "A" - sign up to a mini-constitution then downplay it. He isn't a eurosceptic - though he is less keen to make political sacrifices for Europe than Blair was.

Where Brown would like to set a lead, rather than just react, is on the aid and trade agenda he has made his own (his only beef with the Make Poverty History campaign is that he thinks it should be pushing governments, including his, harder), and also on climate change. He wants to outmanoeuvre the Tories on this territory not by matching David Cameron wind turbine for wind turbine, but by coming up with the kind of large-scale breakthrough that would make Cameron look like a lightweight. He speaks of plans for the reforestation of the Congo, of recasting the beleaguered World Bank as a new Environment Bank, of establishing a carbon market in London. This is the level he wants to operate on; he'll leave the organic broccoli to Cameron.

Also interesting - but how is he going to get a "real breakthrough" on trade without some kind of fight in Europe? He will be up against Sarko - who seems to have an even more aggressive stance on the CAP than Chirac.

The two things are certainly linked - the FCO will be telling Brown that he won't get anywhere on trade etc... unless he plays nice on the mini-constitution. We think that approach has been tested to destruction - but has Gordon learned that lesson?

What a shambles

The pro-euro camp have come up with their case for the new mini-constitution.

It's a joint publication of the Centre for European Reform and "Business for new Europe" - a ludicrous front group set 'inspired' by Peter Mandelson, which operates out of the offices of a lobbying firm called Finsbury.

Its a very amusing read.

After a good deal of beating about the bush, it tries to make the case for the new text.

One arguement is that the mini-Constitution is needed for enlargement. Eh? Didn't Sarkozy just say that Turkey is never coming in? As his aide Alain Lamassoure put it: "EU leaders have been lying to Turks for the past few years and the new French leadership believes we must stop doing so… The sooner we will have the courage to say this openly to Turkey the better."

We don't mean to be harsh but has there ever been, at any point, any suggestion whatsoever from France that they might let in Turkey if we sign up to the mini-Constitution? Or is this 100% pure self-delusion?

Another old argument is then dredged up. If we say no there will be "a loss of British influence". In fact "The Germans would not be amused that Britain had effectively destroyed what they hoped would be the crowning achievement of their EU presidency" (ooh - nasty).

Its difficult to know where to start with this sort of defeatist argument. One basic point is that we have already tried making sacrifices to look communautaire. Where has it got us? Take the EU budget negotiations - we gave away over £7 billion pounds for nothing but the promise of a "review" later.

The reality is that we need to have our own vision and insist on it. If your first priority is never to have an argument then you will never get anywhere.

Another argument is that if we said 'no' then "The more integrationist countries would start talking about ‘variable geometry."

One word: "great".

A flexible Europe (multi-speed is the wrong word because it implies everyone is going in the same direction) is the only way out of the EU's fundamental dilemma: some member states want more integration, other want less.

Lastly and leastly, the supposedly 'clinching' argument for the mini-Constitution is that the Union would become less capable of dealing with the many external challenges it faces". The paper lists Doha, the middle east, and Kyoto 2 as examples.

But the EU has flunked every one of these challenges. It is the main obstacle to a real development round. During the hostage crisis, EU members refused to endorse even the most mild sanctions on Iran (like no more export credits). And the EU's resposne to climate change is a joke: EU Emissions are up, not down, since it signed Kyoto, and the EU's Emissions Trading Scheme is a catastrophic failure which as squandered a fortune while allowing emissions to rise.

If we are ever going to get the EU to take these things seriously, the last thing we should do is legitimise the current EU's failings by giving it more power. The answer instead is to make our continued £10.5 billion a year payments to the EU conditional on progress - for example a meaningful Doha offer.

The bottom line, and the fundamental difference in our approach, is that we believe you don't get what you want in Europe by just going with the flow. Over the last ten years (maybe even the last 35) we have tested that idea to pretty much destruction. Now we need a fresh start, not more of the same.

(PS - you can get our contrasting take on the mini-constitution here)