"Europe at 27 is doomed to failure"

Pretty bleak stuff from former French Prime Minister Edouard Balladur in today's Le Monde:

Europe at 27 is doomed to confusion and failure. It suffers from problems that the Lisbon Treaty has failed to correct. Lack of authority: the 1950s structure, with the [European] Parliament, the Commission and the European Council, being too heavy. We will witness conflicts between the Parliament-Commission duo and the European Council in the future. Lack of realism: the 4 or 5 countries representing the 2/3 or the 3/4 of Europe's population and wealth have indeed special responsibilities. Lack of coherence: the 27 member states have very different social and juridical regimes. We pay the price of an enlargement which was decided too hurriedly.

So the Lisbon Treaty didn't fix all this? What a shocking revelation!

EU 'leadership' on climate change

One of the main gripes the Polish government have about the EU climate and energy package is the proposed reforms to the Emissions Trading Scheme, which from 2013 would force power generators to pay for all their carbon credits rather than receiving them for free.

Given that coal power is about twice as carbon intensive as gas, the graph above shows why the Poles are so upset...

According to Polish officials cited in the WSJ, Polish coal fired plants would need to pay 4.8bn euros per year under the plans.

Leaving aside the debate about making power generators pay for carbon credits (free permits have led to huge windfall profits for these firms, paid for by electricity consumers) this issue exemplifies the problems of adopting such a complex, centralised, and prescriptive approach to cutting carbon emissions.

It would have been far more politically sensible and realistic for the EU to just focus on securing agreement on simple targets for absolute cuts for carbon emissions, and making sure these are properly implemented and enforced. This would allow member states to choose the most appropriate and cost-effective way of reaching these targets and fighting climate change.

Although the Commission has grandious visions of itself as "leading the world" through its approach of micromanaging national energy policies, there's no point formulating policy like this if the only effect is to scare off national governments who - unlike the Commission - are accountable their electorates, and don't want to see their voters freeze or lose their jobs.

Because the Commmission has insisted on such an overpriced and interventionist way of dealing with climate change, the effect will be simply to kill off the possibility of winning consensus within Europe. And that will damage the chances of a more important global agreement on climate change.

If we do see an EU agreement, the likely deal will only come after a string of pretty substantial concessions to the current 'troublemakers', leading to an even more complex web of industrial subsidies, fiscal transfers and economic distortions. As well as free carbon permit allocations to politically favoured industries, there could well be a big increase in the quota of external offset credits from outside Europe (which often just contribute to more pollution). France and others will continue to push for 'green tariffs' on goods from countries with climate policies that are not to their liking, opening up a pandora's box of EU protectionism and tit-for-tat tariff raises with China, India and the US. In a few years time, when it becomes clear the renewables targets are a bad idea and not physically achievable, this part of the agreement will also begin to unravel.

This is not an example the Chinese or Americans are likely to be keen to follow.

By making such an expensive mess of its carbon policy, the EU will not only discredit itself but will also weaken the chances of a global consensus on the issue, and strenghten those who would rather see no action at all on climate change.

So much for European leadership on climate change

Adjusting to a non-European world

Anand Menon has an excellent essay in European Voice dismissing the "preposterous argument" that the Lisbon Treaty would have helped Europe deal with the credit crunch or the Georgia crisis. This is his conclusion:

"...the brutal truth exposed by both crises is that the EU's soft power relies for its effectiveness on a permissive hard-power environment, on real rather than confected common purpose. The EU can bring about change, but only if no powerful state opposes it. The Europeans, quite simply, lack the power to deter, let alone coerce Russia.

Claims that Europe is one institutional reform away from global power feed into a profound sense of denial afflicting many in the ‘Old Continent'. How long is it, really, since the states of Europe, either individually or collectively, could decisively shape global politics?

The open contempt Moscow has shown for European attempts to secure its withdrawal from Georgia underscores a stark, painful truth.

Now more than ever, Europeans inhabit a non-European world. There is no choice but to adjust to that and safeguard, as quickly and soberly as we can, what is left of Europe's role in global politics and economics."

Menon touches on a key failing in the thinking of much of the European political class - the idea that Europe's rapidly declining power can be remedied by closer institutional centralisation.

Surely this notion has been tested to destruction by now?

In the broad sweep of history, Europe's period of dominance was short - 200 years at most. This ascendance was achieved as a result of complex factors that are hotly debated amongst historians. But there are two key points to note. First, Europe may be weak now, but it was relatively much weaker in the past (as recently as 1700, Qing China and Mughal India each represented a little less than 25 per cent of world GDP). Second, Europe's meteoric rise was achieved not through the centralisation of power, but through technical, fiscal, political and cultural innovation amongst diverse nation states.

Is European decline innevitable? Can it be reversed? If so, how? This subject won't be resolved in a blog post - but recent events should certainly provoke some serious thought on the issue.

Massive hypocrisy (part 188)

According to the Press Association MEPs have today voted to increase the amount of subsidies you and me pay each year to "hard-pressed" tobacco farmers. As the global credit crunch starts to bite and rising food and petrol prices hit your daily budget I'm sure you'll be as pleased as we are that more than €300 million a year of our taxes will continue to be spanked on producing a crop which killed over 500,000 people in Europe last year.

In the perverse world that is the EU, farmers are paid £5,250 a hectare to grow tobacco while wheat farmers receive £240 a hectare.

In the UK alone the NHS spends £1.5bn a year treating people with smoking related diseases and the government spends around £30m on anti-smoking education campaigns and £40m is spent helping people stop smoking. No contradictions there then...

Last year the Government claimed the EU had seen the light and that tobacco subsidies would end in 2010, but the clowns in the European Parliament have just voted to extend tobacco farmer's gravy train until at least 2012.

The issue will now go to an agriculutural ministers meeting where no doubt the UK Government will defend our interests admirably (remember that root-and-branch review of the CAP that Blair promised us in return for our rebate anybody?)

Other news just in which helps to confirm that Brussels really is on another planet: today is the launch of European Maritime Day which "will highlight the importance of the oceans and seas to Europe". This from the organisation which has admitted that its very own Common Fisheries Policy is "morally wrong" and is single handedly responsible for destroying some of the richest fishing stocks in the world?

Apparently this great day is going to be a celebrated with a "stakeholders conference" in Brussels. Hurrah! Cohibas all round...

failure, lies and spin

It's tempting to write an intemperate blog about this:

Preliminary figures released yesterday show that the EU's carbon dioxide emissions grew by 1-1.5 per cent in 2006, despite the bloc's rhetoric about the need for reductions. The data so-far released – which covers 93% of installations covered by the EU emissions trading scheme – shows that participants emitted less than their quota of free permits, hence the rise in actual emissions.

According to the Guardian, Stavros Dimas, the EU's Environment Commissioner, told scientists from the UN's intergovernmental panel on climate change yesterday that "Only EU leadership can break this impasse on a global agreement [post-Kyoto] to overcome climate change". The article notes that “What Mr Dimas knew - but did not tell the scientists, apparently - is that the EU's programme for cutting carbon, its two-year-old emissions trading scheme (ETS), remains in disarray.”

The Guardian notes that "Mr Dimas and his officials deliberately released the raw data early - without analysis or interpretation - to avoid last year's debacle, when premature release of national statistics brought a disorderly collapse of the market. This year the full, sifted figures will be released on May 15."

Yes - but that's probably not the only reason they wanted to spike the story...