Le Monde's 'Up yours Delors' moment: Barroso is 'a 57-year-old chameleon in search of a good job at NATO or the UN'

As we reported in our daily press summary, European Commission President José Manuel Barroso has drawn criticism from the French government after he described France's insistence to exclude the audio-visual industry from EU-US trade talks as "completely reactionary". Now, the French press has caught up as well.

And it's pretty harsh.

Le Monde has a tough editorial under the headline, "Monsieur Barroso, you're neither loyal nor respectful!" We thought it was worth translating it almost in its entirety. Here goes,

For once, the Europeans were united vis-à-vis the Americans […] The President of the European Commission, José Manuel Barroso, has torpedoed this unity by stating, right before the start of the [G8] summit, that France’s position on the cultural exception was “reactionary”. 

It is of little importance to know whether France is [reactionary]. Or whether or not one needed to exclude, in the name of the cultural exception, audio-visual services from the negotiating mandate handed to the European Commission. In order to be ready, the 27 [EU member states] negotiated at length and until late at night on Friday, 14 June. France ended up imposing its views and scored a political victory.

And whether Mr Barroso was satisfied with this outcome or not is of little importance, too. He’s the President of the Commission and is bound by the mandate he’s been given by the [member] states. By denigrating the agreement the day after it was concluded, Mr Barroso is not acting as the guardian of the [EU] Treaties, as his mandate requires.

[…]

The Trade Commissioner, Belgium’s Karel De Gucht, has adopted a comparable attitude. He didn’t manage to impose his views. A bad gambler, he pretends that it will be possible to re-introduce audio-visual services in the negotiation. That’s empty talk: everything is possible under unanimity. In reality, France retains its veto on the issue. But Mr De Gucht has an excuse: he will negotiate with the Americans and is afraid that the latter retaliate by excluding from the negotiations some domains that are strategic for the Europeans. He wants to be able to go back to the 27 [EU member states] to amend his negotiating mandate, if necessary.

Mr Barroso, on the other hand, seems to pursue far more personal ambitions. During eight years, the President of the [European] Commission has stood out for his ductility. Defender of small states as Portuguese Prime Minister, a liberal at the time of his appointment in Brussels ahead of the 2008 crisis, pro-Sarkozy during [former French President] Nicolas Sarkozy’s presidency, and incapable, since, of taking the smallest political initiative to revive the Union, he has accompanied the decline of the European institutions.

Today, aged 57, this chameleon is searching for a future. In search of a good post, at NATO or the UN – who knows? – he has chosen to pander to his Anglo-Saxon partners, the British Prime Minister and the US President. At the head of the Commission, Barroso has been a good reflection of Europe: a decade of decline. 

This is "Up yours Delors" territory - and arguably the strongest attack on Barroso until date.

A European Commission spokesman was quick to point out that Barroso didn't have France in mind when he made his remarks. There are several layers to this episode, but if anyone thought that the French are becoming any less sceptical of the Commission, they are mistaken. If anyone thought that turning the Commission into an all-powerful eurozone budget police was only one German election away, that is...

Why France can hold up EU-US free trade talks

David Cameron wants to use the gathering of G8 leaders in Northern Ireland next week to launch formal negotiations on the planned EU-US free trade agreement. But progress depends on breaking the deadlock in talks today over France's insistence that any agreement must include protections for its film and TV industries against American imports. These talks are to give the European Commission a mandate to start negotiations.

The French, though, have a pretty strong bargaining position. The EU Treaties (Art 207) set out the procedures for opening and concluding free trade agreements under the so-called Common Commercial Policy.

The Commission makes recommendations to national governments, which authorise it to open negotiations. The Commission then conducts the negotiations in consultation with a special committee appointed by ministers.

In principle, trade agreements are negotiated and concluded by qualified majority voting. However, there are a number of exceptions where unanimity (and therefore national veto) still applies, including “in the field of trade in cultural and audiovisual services, where these agreements risk prejudicing the Union's cultural and linguistic diversity.”

In a bid to break the deadlock, the European Commission and the Irish EU Presidency have proposed asking EU member states to give unanimous approval to any parts of the draft agreement affecting the audio-visual industry once the negotiations on that specific sector are concluded. However, Le Figaro quotes a source from the office of French Trade Minister Nicole Bricq as saying, “We already have a veto on the conclusion of the agreement, so [the offer] doesn’t change anything for us.”
 
In a world where trade agreements are increasingly all-encompassing affairs, ranging across the entire economy, this gives France in particular a great deal of leverage.

Should the UK contribute to the IMF?

George Osborne is in Washington DC today for an IMF meeting. In another one of those ‘domestic politics meet financial crisis’, Osborne is under pressure from his MPs not to contribute any more cash to the IMF unless there are guarantees that the money won’t be used, as the popular phrase is in Westminster goes, to “bail out a currency” (and no, we’re not talking about the Yen). There are a whole range of confusions surrounding this entire debate, so here’s an effort to clear them up:

Where are we at?

The UK can provide £10bn without a vote in Parliament, as this cash goes back to a previous commitment. For anything more, it needs approval from its MPs, which could be sticky (see below). Osborne has so far refused to contribute the £10bn, let alone even more, until certain conditions have been met.

Is contributing to the IMF the same as giving to, say, the EFSF (the euro bailout fund)?

Certainly not. The IMF is (a) a serious organisation that has saved many countries including the UK (b) its loans rank senior to other debts and so are always repaid (c) nobody has ever lost a cent on the IMF and (d) this would actually be an opportunity to modernise a 1948 organisation by giving the BRICs a more proportionate say in return for fresh capital (if you want to keep the IMF relevant, this is inevitable).

Are Tory MPs really that opposed?

There’s been a lot of shouting to the press over this issue, but the feeling is that most Tory MPs realise that contributing to the IMF could be a sensible move provided that certain conditions are fulfilled.

So what conditions need to be fulfilled for the UK to contribute?

The UK government has set out two: the top-up needs to be global (all countries contributing not only EU ones) and the money can’t be used specifically to bail out the euro.

We would add that there also needs to be a change in tact. As we told BBC five live this morning, “The main problem is that the eurozone’s approach to the crisis hasn’t changed, despite widespread criticism including from the IMF, it still fails to address the underlying problems: the lack of growth, the lack of competitiveness in the peripheral countries and the massive risks still held by the under capitalised European banking sector. Any further contributions should be conditional on a change in tack and some acceptance that this bailout and austerity policy has failed.”

What is likely to happen?

At the moment it looks as if the IMF will reach its target of $400bn, possibly even without funds from the UK, US and Canada. The two latter countries look unlikely to contribute additional funds, so the prospect for additional contributions from the full membership looks dim.

The question is, what will the IMF need to give in return? A rebalancing of power towards emerging market members is inevitable and the BRICs are pushing for it to start in exchange for funds this time around. That means there are plenty of complex negotiations still to take place. A broad political agreement may be in place by the end of the weekend, but there will be plenty of legal and technical details to be fleshed out.

Will the increase change anything?

Not really. Ultimately dispersal of IMF funds in the eurozone crisis is reliant on similar provisions from the eurozone bailout funds. So far the format has been 2/3 eurozone and 1/3 IMF. As we have previously noted, despite EU claims, the lending capacity of the eurozone bailout funds remains €500bn. This means the maximum which will likely be able to be tapped from the IMF is €250bn (although it is incredibly doubtful the IMF would ever put up that much unless the eurozone were teetering on the brink). As is often the case, the issue of IMF funds is tinkering at the edges of the crisis, eurozone leaders still fail to address the underlying problems of the crisis or even put up a sizeable bailout fund of their own.

Should the UK contribute then?

Well, first the government should wait and see if the $400bn target can be met without a UK contribution. If that is the case all the better. If not, and if all the BRICs have contributed, the UK may need to put up its £10bn (which has already been approved by Parliament). Obviously, as we have noted the usual caveats and conditions should apply and the UK along with the IMF should continue to push for a reformed approach to the crisis.

Whose side would a European army be on?

Following German Foreign Minister Guido Westerwelle's speech at the weekend, announcing that the long term goal of EU security and defence policy under Lisbon should be the creation of a European army, the French Defence Minister Hervé Morin today made a rather different, but nonetheless important announcement.

He revealed that, after much um-ing and ah-ing, France is to sell one, and possibly as many as four, amphibious assault ships to Russia. The Economist's Charlemagne correspondent notes that after seeing one of these ships at St Petersburg in November 2009, Russian PM Vladimir Putin said on a visit to Paris: "I can assure you that if we purchase this armament, we will use it wherever deemed necessary." Similarly a senior Russian admiral declared that if such ships had been in the fleet in 2008, Russian forces would have overrun Georgia "within 40 minutes", rather than in 26 hours.

The WSJ notes that both the US and the eastern European members of NATO are not amused and it's certainly unlikely that France's decision will do anything to dispell the concerns in both the UK and the EU accession states that its vision for EU defence policy poses a threat to the transatlantic alliance.

Franco-British military cooperation is back in vogue within the MoD but actions like this highlight the fact that on crucial questions such as engagement with Russia, Iran's nuclear programme and other key foreign policy questions of the day - opinion in the EU is divergent, and that is not something that the Lisbon Treaty could, or did, magic away.

Obama's not the only one confused by Lisbon

The Obama "snub" continues to gather headlines in today's papers. PJ Crowley, the US Assistant Secretary of State, today confirmed that the uncertainty created by the new posts created under the Lisbon Treaty had been a major factor in Obama's decision to withdraw, saying:

"Because of the changes involving the establishment of a EU council president and a European commission president on top of the rotating EU presidency, I think it's taking some time to work through exactly how various high-level meetings will happen."

And it seems it's not only the Americans who haven't got a clue who they're meant to be talking to. Le Figaro notes that, on his visit to the EU this week, Mongolian President Tsakhia Elbegdorj was left perplexed as to which of the EU's various presidents he was speaking to at any one time. After one meeting, he said:

“I have just been received by the European Council President, I was received yesterday by the President of the European Parliament and after this meeting I will meet the President of the European Council...Er...”

Quite.

"Figure it out and let us know"...

was the message, according to the WSJ, that the US State Department chose to leave on the EU's voicemail this weekend, presumably while the Spanish, who hold the EU Presidency, Herman Van Rompuy and Jose Manuel Barroso all wrestled with each other as they failed to answer the phone.

Although this isn't strictly true, it's an image that fits with the 'Kissinger question' of "who do I call if I want to speak to Europe?", if he ever actually said it that is.

What is true is that President Obama has pulled out of the annual EU-US summit this spring and one of the reasons is that the EU's various presidents have been so busy arguing over who would get to shake his hand first that they apparently forgot to send out the invitations.

In the words of a State Department official, "We don't even know if they're going to have one [a summit]. We've told them, 'Figure it out and let us know.'"

A more diplomatic official said, "Who attends from the US and at what point will depend on who's calling the meeting. There's a competition in Europe because you now have the standing EU architecture."

This was supposed to be the first high-level EU-US summit after the entry into force of the EU's 'magical cure', also known as the Lisbon Treaty, which was billed as the answer to the EU's inability to deal with the outside world as one, creating a President, a Foreign Minster, and a diplomatic service.

But it turns out Obama doesn't seem that bothered about coming round to watch the EU play with its new toys. For some strange reason the US President thinks it's more important to travel to Asia in the spring, to South Africa in the summer and to Portugal for the NATO summit in the Autumn.

Just a thought but maybe that's because there will be people there with something more important to say..