It's raining men in Brussels: Juncker Commission at risk of humiliating veto by MEPs over lack of gender balance

We are now at the halfway point in terms of nominating the next Commission with 14 out of 28 member states having publicly announced their candidates. The line-up suggests we will have the most senior Commission to date with no less than four former Prime Ministers: Andrus Ansip (Estonia), Jyrki Katainen (Finland), Valdis Dombrovskis (Latvia) and Juncker (Luxembourg) himself. However, as the nifty graphic from EuropeDecides shows, there is a bit of a gender balance issue - only one of the nominees is female.

Notwithstanding the benefits of having a more balanced and representative Commission per se, the gender balance issue is important because the European Parliament - never slow to jump on a bandwagon or to give national governments a bloody nose - could veto the whole Commission if it contains too few women (even if the European Parliament's group leaders are themselves mostly male). European Parliament President Martin Schulz warned a couple of weeks ago that:

"Looking at the information currently available on the number of female candidates, the commission would not receive the backing of majority in the European Parliament."

The magic number is ten - one more than in the current Commission. This would require nine of the second group of 14 Commissioners to be female, which looks unlikely. Below we asses what the prospects are for the remaining member states to put forward female candidates.

Belgium: The good news for Juncker is that Marianne Thyssen, who has been an MEP since 1991, is among the front-runners for the post although Berlgium's current Commissioner Karel De Gucht has indicated he would like to stay on.

Bulgaria: It was reported that the outgoing socialist government would put forward Kristalina Georgieva, the current Bulgarian Commissioner international cooperation, humanitarian aid and crisis response, if she were to be given the position of High Representative even though she is from the centre-right GERB party. As such, it looks like Bulgaria will instead nominate current Foreign Minister Kristian Vigenin.

Cyprus: Androulla Vassiliou is rumoured to be retiring (she will be 71 in November) and in any case is from a different political party to the new government. No word yet on who Nicosia will send in her place.

Denmark: No news out of Copenhagen but the centre-left coalition government will likely want to replace Connie Hedegaard who is a conservative politician.

France: No formal announcement from Paris so far, but former Finance Minister Pierre Moscovici is the clear frontrunner. Former Europe Minister Élisabeth Guigou is still in the race, but she is broadly regarded as an outsider.

Hungary: Although it hasn't been formally announced, rumour has it that Orban will send Hungary's current Foreign Minister Tibor Navracsics to Brussels.

Italy: Prime Minister Matteo Renzi is still pushing for Foreign Minister Federica Mogherini as the new EU foreign policy chief. However, the Italian government would very likely put forward a different name if it became clear that Mogherini will not secure Baroness Ashton's job, and the new nominee may well be a man.

Netherlands: The most likely candidate is current Finance Minister Jeroen Dijsselbloem, although it is unclear if he would still go to Brussels if he were not to get the coveted Economic and Monetary Affairs portfolio - something Juncker is reportedly not too keen on.

Poland: Poland's two leading candidates are Foreign Minister Radoslaw Sikorski and former Finance Minister Jan Vincent-Rostowski, although there is a lot of speculation that in order to balance the Commission Poland could instead put forward Danuta Hübner, an economist and MEP who already served as the Regional Policy Commissioner between 2004 and 2009.

Portugal: According to the Portuguese media, Prime Minister Pedro Passos Coelho is considering picking Carlos Moedas, the Secretary of State to the Prime Minister, as Portugal's nominee. However, Juncker is reportedly putting pressure for the choice to fall on Finance Minister Maria Luís Albuquerque instead. Therefore, Lisbon could potentially nominate a woman.

Romania: It appears Bucharest has re-nominated current Agriculture Commissioner Dacian Ciolos.

Spain: Former Agriculture Minister Miguel Arias Cañete is the only name doing the rounds in the Spanish media. No real alternatives have been floated.

Slovenia: No news out of Ljubljana, where the centre-left won early elections held a couple of weeks ago. A poll out today has found that a majority would like Janez Potočnik, the the incumbent Environment Commissioner, to stay on.

Sweden: When it comes to gender equality, you can usually rely on the Swedes. Although nothing has been confirmed, EurActiv reported recently that Cecilia Malmström, the current liberal Commissioner for Home Affairs, might be able to continue even if Sweden elects a centre-left government in September's general elections as looks likely.

Our quick headcount reveals that in addition to Vera Jourova from the Czech Republic, we anticipate Juncker can potentially count on another five women (from Italy, Belgium, Portugal, Poland and Sweden) which would only put him on six - still well short of the target. Possibly MEPs could accept a lower number if a woman were also appointed as President of the European Council but not this low. 

If the European Parliament were to follow through on its threat to veto the entire Commission it would set up an unprecedented row with member states, some of whom would have to back down over their preferred choice of Commissioner (although the UK would probably be safe given the appointment of Baroness Ashton to the current Commission).

Normally when the EP generates these kinds of threats and ultimatums (like over the MFF last year) some kind of backroom deal is usually stitched up allowing everyone to save face but it is increasingly hard to see where Juncker will get enough woman from to placate the European Parliament.

Martin Schulz's revenge: Will the European Parliament block the UK's EU Commissioner?

If you read our press summary this morning (if not, do sign up!) you would have seen - before anyone else outside Germany incidentally - that Lord Hill, the UK's nominee for EU Commissioner, is already at risk of becoming a victim of an increasingly assertive European Parliament.

Martin Schulz – the ‘European Commission Presidential candidate’ who was re-selected President of the European Parliament after his socialist group in the EP came second in the European elections - was made persona non grata by Labour in the run-up to the European elections.

He was seen as too federalist, and someone who would only give Ed Miliband additional headaches shortly after Labour ruled out an In/Out referendum. He’s had a rough ride in the UK over the Spitzenkandidaten, where he clashed head on with the Tories and most other British people. He may now take his revenge.

Speaking to Deutschlandfunk radio this morning, he said of Lord Hill:

"I cannot imagine that, with his radical anti-European views, provided that he has them, [Lord] Hill can get a majority in the European Parliament…It will become clear if Mr Hill approaches us without prejudice, and that will certainly influence whether or not he gets a majority."

The European Parliament cannot formally reject individual Commissioner-nominees, but can veto the entire European Commission. Therefore, MEPs have de facto 'blackmailing powers' to pick off individual nominees. Interestingly, Schulz added that a rejection of Lord Hill in such a way "cannot be ruled out".

In fairness, Schulz was asked a clearly leading question when making these comments:

"David Cameron has proposed the eurosceptic Jonathan Hill as [the UK's] next EU Commissioner, and [he's] a determined sceptic of the euro and the EU. Can one assume that the next EU Commission  will become significantly more eurosceptic, blocking things from the inside?"

So, is this posturing or is Schulz meaning business? Well, as for now, we should treat the comments with caution. Even if Schulz is serious, he will need to get a majority of MEPs to agree that Hill should be rejected on basis of "radical anti-European views, provided he has them". Hill isn't exactly on record spewing out Farage-type anti-EU slogans. The point about Lord Hill is that he's a very different type of political operator altogether: he's someone who strikes deals, rather than engaging in shouting matches or trading in platitudes.

Schulz will struggle to build a case on this one - not least since Lord Hill seems like exactly the type of pragmatic, deal-maker type person MEPs should like. Still, it's a strong statement from Schulz.

MEPs' great hope for more EU democracy and transparency to be decided by... a secret ballot

Own-goal alert.

When selected as the Socialists' candidate for the European Commission President, Martin Schulz claimed that:

“I want to be the first President of the Commission who is not the result of a backroom deal in a Brussels office."

This is the main argument advanced by supporters of the spitzenkandidaten process (including by the current front-runner, Jean-Claude Juncker) i.e. that having the Commission President nominated by the largest political group within the European Parliament is more transparent and democratic than the previous process whereby EU leaders agreed the Commission President amongst themselves. For the first time, voters would be able to directly determine who would get this crucial post., and be able to hold politicians to account for their choice.

However, when the Parliament itself comes to vote on the appointment, as per its rules of procedure, the vote is held by, wait for it, a secret ballot: 

Rule 105 : Election of the President of the Commission

1. When the European Council proposes a candidate for President of the Commission, the President shall request the candidate to make a statement and present his or her political guidelines to Parliament. The statement shall be followed by a debate.

The European Council shall be invited to take part in the debate.

2. Parliament shall elect the President of the Commission by a majority of its component Members.

The vote shall be taken by secret ballot.

Although this is not a new development - Barroso was confirmed by secret ballot - this time it was supposed to be different. It is hard to stress just how absurd it is for MEPs to decry a "stitch-up" by national leaders and then refuse to allow themselves to be subjected to scrutiny. If the idea is to make the appointment process more transparent and to 'put voters in charge', how can voters hold their MEPs to account when they do not know how they voted? How will - for example - Labour voters know if their MEPs will follow the party line and vote against Juncker should he emerge as the European Council's preferred candidate?

For all the laudable talk about democracy, transparency and accountability, critics will be forgiven for thinking that this is about the European Parliament trying to carve out more power and influence for itself within the EU structure. Yet another reason to drop the spitzenkandidat charade and allow national leaders - who have a much stronger democratic mandate - to make this decision.

German media turn on Cameron over Juncker - but what are they arguing for?

We pointed out on Friday that a powerful coalition between media and politicians was forming in Germany in support of Jean-Claude Juncker becoming the next Commission President and the Spitzenkandidaten experiment more generally. More worryingly for Cameron, he has emerged as the pantomime villain of the piece due to his opposition to both.

What's interesting though is that German commentators seem to argue more against Cameron than in favour of Juncker - who, we suspect, most of them realise that the idea of Juncker as the saviour of European democracy isn't entirely intellectually sound. A widely reported pre-election opinion poll for Bild showing that only 7% of Germans actually knew Juncker was a candidate, is no longer cited.  Here is a round-up of some of the key pieces from the past few days:

On Friday, the big news was the endorsement of Juncker by Axel Springer (the parent company of Bild and Welt). In a piece headlined “Juncker has to become President", the group's chairman Mathias Döpfner wrote:

“Are the results of the elections in Europe the sovereign decision of the citizens that politicians ought to implement? Or are they a form of non-binding suggestion that in the backrooms of powers can be interpreted and then gladly twisted into something opposite?”

"The issue is clear: Europeans want Juncker as the EU president. Schulz got the second-best result. A third [candidate], who didn't stand for election, can't be allowed to get the job. Otherwise that would make a farce out of democracy. You may get away with something like that in the DDR or in far-right banana republics. But not in the EU. Otherwise it will abolish itself."

In another comment piece on Saturday titled “Merkel must keep her word”, regular Bild columnist Ernst Elitz - who has often been critical of EU over-reach argued that :

“Before the elections it was clear: The Commission President will be decided by the voters and the EU Parliament. Afterwards some national leaders don’t want to hear about it anymore.”

On Monday, Handelsblatt’s Brussels correspondent Thomas Ludwig argued that:

“Whoever listens to the Brits in the debate about the personnel for Europe’s top posts is allowing the notorious spoil sport to take charge of the game... “It is impudence that the British Prime Minster David Cameron called the vote of the people an ‘unnecessary restriction’ for the political manoeuvring in the personnel poker. What kind of democracy understanding is that!”

Die Welt's Brussels correspondent Florian Eder - another German journalist and commentator who is often sensitive to the need for EU reform - also had a piece on Monday in which he argued that:

"It would in any case be a risky move [for member states to put forward an alternative candidate] which would delight the strengthened anti-Europeans that David Cameron and Francois Hollande want to keep at bay. The sceptics could already by the first vote get that which they could never achieve alone: a hamstrung, institutionally paralysed EU. Is that supposed to make sense?" 

"the European Council is by no means set against Juncker. Many of its members, including social democrats, have come out in support of the Luxembourger. That was how it had been agreed: the election winner would become Commission President. Cameron is voting against this as he blames his defeat at the European elections on the EU, which should show consideration towards him and his party interests... whoever blocks Juncker is duping the voters who believed in a political promise."

German magazine Spiegel went the furthest, with its English-language version publishing an editorial yesterday entitled "Decision Time: Britain must now decide if it will stay in Europe", which argued that:

“The EU cannot allow itself to be blackmailed by the British for another three years and refuse to give the people of Europe what was assured to them before the election - that they could use their vote to determine the next president of the European Commission. If the EU doesn't fulfill that promise, it will lose all credibility and acceptance… Britain is important to be sure. But the choice between a more democratic EU and Britain's continued membership is clear. Europe must choose democracy.”

There are a others who take a more nuanced tone. For example FAZ’s Brussels correspondent, Werner Mussler, points out that:

“The future of democracy in the EU does not depend on whether [the European Commission President] is called Jean-Claude Juncker, Martin Schulz or something else.” 

Hey Herr Schulz - what happened to your pan-European values?

UPDATE 12:50

.@OpenEurope on @MartinSchulz's new campaign ads http://t.co/ECWtV53G0f Tho I think they disagree with French veto over German flag waving
— Bojan Pancevski (@bopanc) May 23, 2014

Just to make clear, as Bojan Pancevski of the Sunday Times points out, it’s not that Schulz is playing the German card per se that we’re critical of – clearly Germany is within its right to pursue its interests like everyone else. It’s that Schulz has built his entire career and campaign on the notion that the nationalist interest is a dated (and indeed dangerous) concept.

--------------------

This is really odd - and painfully revealing.

In today's Bild - Germany's and Europe's biggest tabloid, which is up there with UK tabloids on the hit list of  Brussels spokespeople (Bild once urged the Greeks to sell their islands) - the Socialist's Spitzenkandidaten Martin Schulz has taken out an advert that comes conspicuosly close to pandering to nationalist instincts.

The ad reads:

Only if you vote for Martin Schulz and the SPD can a German become the President of the EU Commission.

The thing is, Schulz has built his career on bashing those who come even close to playing the 'nationalist' card in Europe - targets have included David Cameron and indeed Angela Merkel herself - claiming he hopes “national identities [will] melt away" and that the “The Nation State has reached its limit.” In today's Le Figaro he said he campaigns against "nationalism adorned with all virtues." And in a recent interview with Der Spiegel, Herr Schulz claimed that "nationality plays no role for me."

By all means, don't your let 'pan-European democratic values' stand in the way of scoring some desperate, last-minute points in a tabloid...

Would it not be easier if 'Brussels' simply dissolved the people and elected another?

In less than a month's time voters across the EU (that is those who decide to vote) will head to the polls to elect the new European Parliament. Ahead of the elections there has been a lot of speculation about the surge in support for a range of populist anti-EU, anti-austerity, anti-immigrant and anti-establishment parties and what this will mean.

Breaking the parties down into these sub-groups illustrates that the potential 'anti-EU vote' is a complicated phenomenon. In a new briefing published today, we estimate these parties could win as much as 30.9% of the vote in May, up from 24.9% in 2009. This will give them 218 out of 751 seats (29%), up from 164 out of 766 (21.4%) in the current parliament. (You can see our criteria for categorising the parties in the briefing).

These parties, loosely termed by Open Europe as the ‘Malcontents Block’, span the political spectrum and differ substantially from each other, ranging from mainstream governing parties to outright neo-fascists, and will not therefore form a coherent block. The largest increases are among the anti-establishment parties typified by Beppe Grillo's Five Star Movement in Italy and the anti-EU vote is largely driven by the rise of the Front National in France and UKIP in the UK. Having said this, we acknowledge that the European elections are in part used by anti-establishment parties to drive a domestic agenda, sometimes with limited links to "Europe". Still from free movement to the bailouts, European issues are now trickling through to voters' decisions.

Sources: Vote Watch Europe and Open Europe calculations

However, despite the strong performance of these anti-EU parties, the EP will continue to be dominated by parties which favour the status quo or further integration. The vote share of parties identified by Open Europe as being ‘critical reformers’ – parties which believe the EU needs fundamental reform if it is to survive – is set to go from 53 to 39 seats.

The net effect of the anti-EU vote could therefore ironically be to make the EP more integrationist: by crowding out critical reformers, by reinforcing the corporatist tendency of the two main groups who will want to freeze out the anti-EU MEPs, and by binding the EP and Commission closer together.

Source: Vote Watch Europe and Open Europe calculations

Another one to watch out for is voter turnout. If turnout is roughly the same this time around (43%), we estimate that 74.4% of all voters will have voted against the EU, for radical change, or not bothered to vote at all, with only 25.6% of all eligible voters actively turning out to vote in favour of status quo/more integration parties.

This is not to say that all 'non-voters' are anti-EU or anti-status quo - some have tried to put words in our mouth to that effect (somewhat predictably). However, it clearly reinforces the European Parliament's remoteness from voters and the thin democratic mandate that MEPs can rely on to push their agenda in the Parliament. Some may be tempted to see voter apathy as a 'net neutral' - we don't know how these voters would vote after all and they're voting for other things apart from Europe anyway. This is a familiar argument that has been used many times in the past as a pretext for pressing ahead with more integration. However, to conclude that voter apathy in fact means 'endorsement' is naive, intellectually dishonest - and outright dangerous as it'll only create even more fertile ground for an even more hostile response in future.

Source: Vote Watch Europe and Open Europe calculations

Worryingly for the UK and other liberal minded EU governments, the share of MEPs explicitly dedicated to free market policies is also expected to fall from 242 (31.6%) to 206 (27.4%).

Source: Vote Watch Europe and Open Europe calculations

All this means that the EP elections may be bad news for David Cameron. The EP has an effective veto over some of Cameron’s potential flagship reforms (outlined in his recent Sunday Telegraph article), including EU-US free trade talks, services liberalisation and rules on migrants’ access to welfare.

The consequence of giving the European Parliament more and more power under successive EU treaties is that these elections matter. MEPs now have equal status with national governments in the vast majority of EU policy areas from regulating working time to bankers' bonuses. Despite this, turnout has fallen in every European election so far and this time around we could see more anti-EU MEPs elected than ever before.

The usual response from the Brussels bubble to voter apathy is that people don't 'understand' the EU. Perhaps, this time politicians might spend more time trying to understand why the electorate is looking for alternatives to the likes of Schulz, Juncker and Verhofstadt or not bothering to vote at all.

Has Martin Schulz been receiving some good PR advice recently?

The EU institutions, and certainly the European Parliament, aren't exactly world renowned for their PR skills. Today we can't blame European Parliament president Martin Schulz for that - perhaps he has a new PR advisor?

In an interview with Dutch magazine Elsevier, asked about the Dutch government's recent 'subsidiarity review' - which concluded that the time for ever closer union in every single policy area was over - he endorses the call for the EU to give some powers back to member states and only focus on essential things:

"Do locally what can be done locally, regionally what can be done regionally, nationally what can be done nationally... I believe we are able to win back trust from citizens."

"For a start, we shouldn't call everyone who is critical a eurosceptic. I am an enthusiastic pro-European, but I think that the EU is in a catastrophic situation. In the Netherlands and Germany, people have the feeling that they pay too much and that they get nothing in return. In Greece, that they're under a foreign regime. In order to deal with this, we must return Brussels' tasks to the national states."

"The Union must concentrate on international trade, migration, tax evasion, climate change, organised crime. For these things, the EU needs to be well equipped."

Naturally Schulz adds the usual caveats that the Commission must be an 'EU government' responsible to both the European Parliament and  member states. Moreover, he has expressed similar sentiments before so we are not sure to what extent this will be followed up with concrete action. It is nonetheless interesting that such a self-avowed EU federalist feels the need to publicly make the argument that EU powers can flow both ways.

Finally a deal on the EU long-term budget?

On Wednesday, European Parliament President Martin Schulz wrote to Irish Deputy Prime Minister Eamon  Gilmore warning him that the latest compromise on the long term EU budget agreed by EU leaders in February would be rejected. Yesterday morning, however, a deal was struck between the two negotiating teams. So had member states suddenly given in to all MEPs’ demands?

Although not all the details are fully clear, it looks as though MEPs have not secured anything substantial above and beyond the compromise they rejected last week.

Retaining unspent funds and ‘flexibility’ – A decent win for MEPs; member states have agreed that rather than taking back unspent funds as before, these can be rolled over to next year’s budget – although a) in recent years there has not been much of a surplus and b) while unlimited unspent funds can be rolled over at the start of the seven year period, this is capped towards the end. There is also scope for moving some cash around between budgetary headings.

Topping up the 2013 annual budget by €11.2bn – A big win for MEPs who demanded payment in full of the additional €11.2bn requested by the Commission to retroactively top-up the 2013 budget (although this is less down to MEPs themselves and more down to the fact that annual budgets are decided under majority voting). So far €7.3bn has been committed despite the UK voting against. This leaves €3.9bn outstanding and Martin Schulz has already warned that if member states renege on this, after MEPs have approved the budget, they will hold hostage the 70 or so individual pieces of implementing legislation for the EU's long-term budget.

A mid-term review: It looks as though MEPs have secured their demand for a compulsory review mid-way through the seven year budget but crucially it seems all but certain that this will take place under unanimity, not majority voting as MEPs had demanded, a scenario which could potentially have seen the spending limits increased. Intriguingly, this could coincide with a UK referendum should David Cameron still be in Downing Street.

Direct EU budget taxes – A big defeat for MEPs who pushed for a complete overhaul of the “own resources” system which would have seen the introduction of direct EU taxes and the scrapping of the UK and other rebates. This issue is completely left off the Commission’s press release and at a press conference following the agreement, the parliament’s negotiator only mentioned further “debate” on this issue. This was a clear red line for member states.

Extra help for youth unemployment – MEPs have also secured an additional €2.5bn to help combat youth unemployment, although this will be reallocated from existing funds, so it is not new money. Member states will also be able to voluntary commit additional funds in this area if they chose to.

So, despite a huge amount of posturing, overall the threat to veto the agreement proved to be an empty one and many of the MEPs' key demands were unmet - as we predicted at the time. They will now get two votes on the long term budget – a non-binding one next week and then a binding one come September or October. A lot could still happen between now and then, especially if MEPs decide they want another stab at obtaining further concessions or if member states refuse to pay more money into this year’s budget.

Even though the UK would not have been in a bad position had the parliament vetoed the agreement, politically it is better for David Cameron to be able to point to a concrete cut (as has already been proposed for the 2014 budget) as this adds credibility to his argument that he is able to secure a better deal for the UK in Europe.

Europe’s Fiscal cliff? Hardly.

MEPs - or at least some of them - aren't exactly doing themselves any favours at the moment.

European Parliament President Martin Schulz has been waxing lyrical about how devastating a cut in the EU budget would be.

"We want a modern EU budget…As far as we can tell, however, the proposal on the table today would be something very different, namely the most backward-looking financial framework in the history of the EU."

“I won’t sign a deficit budget…Europe, like the U.S. a few weeks ago, is heading for a fiscal cliff.”

Wait. What? Did he just compare a real terms cut in the EU budget to the US Fiscal cliff?

Frankly, this a ridiculous comparison. As Schulz-types themselves are keen to point out, the EU budget amounts to around 1% of EU GNI while the US Federal Budget amounts to around 15% - 20% of US GDP (and has historically been even higher than that).

The fiscal cliff would have amounted to tax rises and spending cuts worth almost $600bn. The current proposal sees EU budget commitments falling by €34bn in real terms (increasing in nominal terms). This is 0.3% of EU 2011 GNI. The US fiscal cliff could potentially have caused US GDP to fall by 4% - 5% in a short space of time; the cut in the EU budget will barely register, especially in comparison to the other problems in the European economy.

The EU budget has important implications for the politics of the EU and can provide some useful funding in certain areas (which it often fails to do by spending so much on the CAP) but will this type of stuff make taxpayers around Europe take Schulz more seriously?

The Karlsruhe factor, Part IV

Throughout the eurozone crisis, we have often highlighted the gap between the kind of ‘shock and awe’ decisions expected by financial markets, and what national democracies are able to deliver. Nowhere has this been more evident than in the on-going constitutional tug-of-war between the German government and the country’s Constitutional Court (see here, here and here for background). The latest chapter concerns a series of legal challenges against the ESM and fiscal treaty, on the basis that they violate the sovereign budgetary rights of the German Parliament.

The stakes are very high given that the Court could, in theory, strike down the best part of Merkel and Schäuble’s efforts over the past year. It is unlikely that the Court will do so given the ramifications, but at Tuesday’s public hearing, the judges (pictured in their traditional red robes) indicated that they would take their time before issuing a ruling; up to three months to decide on whether to issue a temporary injunction pending a full decision on constitutional compatibility early next year.

This delay is most unwelcome news for Merkel who is desperate to reassure financial markets and other political leaders that Germany is serious about the eurozone rescue, which is why she expended a lot of political capital in pushing the two treaties as a package measure through the German parliament in record quick time, and was angry that after all that German President Joachim Gauck refused to give his assent after the Court asked him to allow them time to consider their legality.

The problem is that the Court was specifically designed – by the British and the Americans no less - to counteract the concentration of power and rash decision making by other federal institutions, a sort of systemic circuit breaker. It is for this reason it is tucked away in sleepy Karlsruhe, the opposite end of the country to Berlin and previously Bonn.

The question of urgency vs caution has led to deep divisions not only within the German government but also the wider political and constitutional establishment. Ahead of the proceedings, Justice Minister Sabine Leutheusser-Schnarrenberger (FDP) said that:

“Government and politicians should stay out of this completely. The Constitutional Court does not need any advice... Judges are also aware of the importance that their decision will have on the economy.”

However, addressing the Court directly, Finance Minister Wolfgang Schäuble warned that:

“A considerable postponement of the ESM… could cause considerable further uncertainty on markets beyond Germany and a substantial loss of trust in the eurozone's ability to make necessary decisions in an appropriate timeframe”.

Meanwhile the Guardian reports that Chancellor Angela Merkel allegedly told a private meeting of her CDU party that the Court was “pushing the limits” of her patience, while Martin Schulz, the President of the European Parliament complained that some of the Court’s verdicts are "characterized by great ignorance”. Conversely, Bundesbank President Jens Wiedmann, also giving evidence, warned that “a quick ratification is no guarantee that the crisis will not escalate further".

The graphic below shows how Germany’s major political figures have found themselves at odds over the Court ruling, with figures from all parties adopting a range of positions on the issue:

The German media on the other hand have presented a broadly united front, with Die Welt noting that the Court’s eventual ruling will determine “How far European integration can go without damaging the democratic substance of Germany”. A leader in German tabloid Bild argues that “It is totally right that the constitutional judges take more time – after all, the question is whether Germany is overburdening itself financially. That would be a lot worse than short term turbulences on the financial markets”, while in centre-left broadsheet Süddeutsche Zeitung, Heribert Prantl argues that:

“Karlsruhe has to find the ways and means by which Europe can continue to be built without breaking the foundations of the constitutional settlement. The success of this search is existentially vital for Germany and the EU. It is more important than the fleeting applause of the so-called markets in return for a quick decision.”

While the Court, even in the opinion of some of the litigants, is not expected to torpedo the eurozone rescue at this stage (although they take a slightly more pessimistic view over on FT Alphaville), the red lines of the existing constitutional settlement are looming ahead, with most forms of debt pooling that many have called for - such as Eurobonds or a banking union - lying on the opposite side. As the debate over the future of the eurozone will continue to rumble on, expect further tension in the broadly consensual model of German politics between further European integration on one hand and preserving the current constitutional settlement on the other.

He started strong but ran out of steam...

As you're aware, "the EU" has a range of different Presidents - a frequent source of confusion for both citizens in Europe and partners from abroad. Socialist MEP Martin Schulz is one of them, being the President of the European Parliament. While Schultz has somewhat of a marmite personality, he does have some interesting to say - unlike many of his predecessors. Yesterday's interview with FAZ is a good example.

He starts off strongly:

“People do not agree with the EU in its present form… people feel that the idea has become a bureaucracy and they reject it…As a young man I've always fought for the United States of Europe. Today I know that this is not possible. We will not turn Germany and France into California and Florida.”

He continues even stronger:

“The EU must focus on the essentials and the leave the labelling of Hessian apple wine to the Hessians.”

Hear hear.

He also proposes a move towards a free trade area in the Mediterranean - which we also have argued for:

“In the 21st century the population of North Africa will exceed 300 million people who need infrastructure, education, hospitals and sustainable agriculture...Why do not we create an economic area in the Mediterranean? Instead, we'd rather bicker about what fertilizer for farmers to deploy.”

But from there he starts to go downhill, and fast and steep at that:

“The euro is one of the greatest icons [of an integrated Europe] which expresses the economic strength of the still richest continent through a common currency… .”

Right...

Continuing downhill he argues that thr EU budget ought to be spared the kind of austerity that member states are having to implement, saying:

“when it comes to growth, the [structural and cohesion funds] are the most successful project of the EU. There are certainly some highways built incorrectly, but the cohesion policy has recently led to enormous economic growth in Eastern Europe and before that in the South.”

It seems that Schulz must have mislaid his copy of our recent report on the effectiveness (or lack thereof) of the structural funds. He's right that the funds should be focussed on the EU's new memebr states, but totally wrong that the funds have categorically have had a positive impact in Europe's south - there's no conclusive evidence for that.

Schulz also includes a tongue in cheek defence of Chancellor Angela Merkel - showing that despite presiding over a rather dull institution, he can afford a joke or two:

“I must acknowledge [Merkel’s crisis management] without envy, it's a great achievement. It's like in football. The game lasts ninety minutes and the end Germany always wins, as they say in England, even if this is not true. In the European Council, it is usually 26 against one. In the end, however everyone agrees with Mrs. Merkel.”