Europe reacts to David Cameron's defeat on Syria

Europe has reacted with surprise - and a degree of shock - to David Cameron's defeat in the House of Commons, which has de facto ruled out British participation in any potential military operation in Syria, at least for now. Here is a first round-up.

In an interview with Le Monde, French President François Hollande commented the outcome of the vote as follows,

Each country is sovereign [and can decide] to take part in a [military] operation or not. This is valid for the UK as well as for France.

Hollande suggests France could go ahead with or without the UK, and says,

If the [UN] Security Council is unable to act, a coalition will be formed. It will have to be the largest possible…It will have the support of the Europeans. But there are only few countries that have the capacity to inflict a sanction through the appropriate means. France is one of them. It’s ready [to act]. It will decide its position in close contact with its allies.

An editorial in Le Monde carries the headline, "The Commons vote against...Tony Blair", and notes,

It's the trauma of the Iraqi episode…that explains the 'no' of the British parliament to a [military] action in Syria. It's not David Cameron…who has been defeated. Rather, he pays for Tony Blair – as Mr Cameron himself acknowledged during the debate. 

As regards the international implications of yesterday's vote, the article goes on,

Washington has indicated that the decision of the UK – the privileged ally, the one of the 'special relationship' – would not stop the US intervening. But [the UK’s decision] can’t not embarrass Paris – even though, officially, France’s position remains that it is impossible not to react to the use of chemical weapons.

Germany's Die Welt has a comment piece entitled, "Cameron experiences his greatest humiliation". The article notes,

The refusal of the British House of Commons to participate in a military strike against Syria has left Cameron badly damaged - and with him the 'special relationship' with the United States.

Die Welt's chief correspondent Michael Strümer stresses how, once again, when it comes to 'hard power' the EU disappears. He writes,

While all eyes are on Washington, New York, Moscow, and on Damascus, Ankara, Cairo and Jerusalem, awkward silence reigns in Brussels…In the corridors of powerlessness in Brussels you can sense frustration and little momentum.

Christian Zaschke of Süddeutsche Zeitung describes the vote as,

A political slap in the face of historic proportions” for the Prime Minister, adding that it will define his tenure…On the international stage, [Britain] will be taken less seriously.

In Denmark, the only other EU country that has signalled it might take part in a strike, political leaders have this morning signalled that the country remains committed - although Foreign Minister Villy Søvndal also warned that the UK vote "calls for reflection".

When asked about the vote, Polish Foreign Minister Radoslaw Sikorski dodged the question, replying that it is important to have confidence in the UN inspectors' evidence. Sikorski also suggested that a possible solution could be for Russia to secure the Syrian regime's chemical weapons stockpiles - as the majority of them dates from Soviet times.
 
In Spain, an article in El País under the headline, "A blow to Cameron", argues that, as a result of the vote,

The British Prime Minister sees his authority seriously dwindled and, in an unprecedented event in the country’s modern history, has lost control over foreign policy.

Italian political commentator Gianni Riotta notes in La Stampa,

Paradoxically, Hollande, a French Socialist, seems to be the ‘hawk number one’. After securing a very prudent pension reform, he’s now trying to use strength against an ex colony inherited by the Turks to titillate the nation’s imperial pride – although Cameron’s defeat will lead him to take a milder stance.

We will keep updating the blog with any other interesting reactions throughout the day.

Italian elections: And now for the warnings from around Europe - stay the course, or else...

Responses to the extraordinary results of the Italian elections have started to come in from around the rest of Europe, the most interesting of which we include below. Predictably, an instant raft of warnings has come out  from Northern Europe and Brussels.

Kicking off is German Foreign Minister Guido Westerwelle who argued that:

“It is necessary for Italy – but also because Italy is so important – for the whole of Europe for a new strong and capable government to be formed as quickly as possible. The politically responsible people in Rome recognise that Italy needs a continuation of a policy of reform, of consolidation, one which is able to secure the confidence of the citizens and the markets.” 

If only the the "responsible people in Rome" were in charge of selecting a new PM. German Economy Minister Philipp Rösler also emphasised the need to stay the course, irrespective of government:

“I could have imagined a better outcome for the reformers in Italy. There is however no alternative to the previously adopted path of structural reforms.” 

As did the CDU/CSU’s parliamentary faction leader Michael Grosse-Brömer:

“The reform path of Monti has to be continued consequently.”

Not everyone in Germany agrees though, with SPD MP Klaus Barthel (very much on the left of the party) telling Handelsblatt that:

“Mrs Merkel delivered enough substance to Berlusconi’s nationalist slogans. Her advances to the teutons [i.e. traditional Germanic values] bring perhaps one or two votes [at home] but come back negatively a million times over from the neighbours.” 

Dutch Finance Minister and eurogroup head Jeroen Dijsselbloem told television broadcaster RTL-Z that:

"Having a stable government in Italy is important for Europe. In that respect, the outcome does not make us cheerful… I assume that, no matter what a new government in Italy looks like, it will live up to the agreements that have been made".

Over in Austria, Chancellor Werner Faymann gave a pretty cautious response:

“The euro remains stable even when in some countries it is not clear yet who will build the government.”

Meanwhile, over in France Finance Minister Pierre Moscovici said that while the result "creates problems", it would not undermine the single currency, while the Minister for Industrial Renewal, Arnaud Montebourg, claimed the result showed that "Italians do not agree with market imposed policies".

Belgian Foreign Minister Didier Reynders reacted as saying that:

"I fear for a deadlock during a certain period… If it now comes to a standstill this can be very dangerous, also for financial markets".

He should know a thing or two about political deadlocks...

Meanwhile, the European Commission (whose favoured candidate got a bit of a drubbing), also issued a hilariously contradictory response, claiming that "We clearly hear the message of concern expressed by Italian citizens”, while also arguing that Monti's reform and fiscal-consolidation agenda were necessary to "underpin everybody's confidence" in the Italian economy, and the Commission "expects compliance".

Right...

Luxembourg's Foreign Minister Jean Asselborn was clearly unhappy, arguing that:

"This is a scenario that no one had wished for... This is not just bad for Italy, but also a nightmare for Europe." 

Spanish Finance Minister Jose Manuel Garcia-Margallo was also alarmist, warning that there was "extreme concern" about the financial consequences, adding that "This is a jump to nowhere with positive consequences for nobody”.

Finally, the most forthright response has to go to Hans van Baalen, leader of Dutch Prime Minister Mark Rutte's VVD party in the European Parliament, who argued that:

“Italians must elect who they want to elect and must bear the consequences when they elect clowns."

Of all the reactions from Europe, there is one that is infinitely more important than all others…

Update - 14.10 23/01/13:

Further reactions from Germany. DPA reports that German Chancellor Angela Merkel said Germany will:

"Talk intensively with the United Kingdom about their visions in detail”

German government spokesperson Steffen Seibert added that:

"The EU need the UK and the other way round" and that changes to the UK position will need to be "discussed in Brussels together".

 ************************************************

The good thing about the debate about the UK's role in the EU - and Cameron's fever pitch speech - is that UK journalists are now forced to really read the foreign press. Hence, several of the news outlets are now running "Europe says nein, non, nej, nie" (guess the last two) etc.

The reactions from around Europe have been mixed, with a lot of predictable, and in parts understandable, muttering about "cherry-picking."

Of all the hundreds of reactions (in itself interesting), there's one that stands out. This one. From Angela Merkel (via DPA), who said she's ready to listen to the UK's wishes, if they're "fair":

"Europe also means that one should find fair compromises...Germany and me personally wishes Great Britain to remain an important part and active member of the EU".

German Foreign Minister Guido Westerwelle was slightly less positive but still accommodating saying:

"Not everything has to regulated in Brussels and by Brussels, but a policy of raisin-picking will not work"

Though German MEPs were pretty red-faced, others were more understanding. Germany’s Europe Minister for Hessen, Jörg Uwe Hahn warned against bashing Cameron, saying:

“Cameron doesn’t make this statement out of nothing…he reflects the prevalent sentiment in the UK, but also in many other countries of the European Union...the UK is the conscience that we are a decentral confederation of sovereign states based on subsidiarity, and not central federal state…the demand – that competences should not only shift unilaterally from member states to the union, but if necessary should flow back to the member states – is basically not wrong.”

Chair of Germany’s European affairs committee, Gunther Krichbaum, who has form, wasn't entirely pleased:

“I'm a bit surprised that Great Britain wants to renegotiate the rules. Britain is not a new member state, it did not just join the European Union. It had a say in negotiating all the rules and treaties. If we opened that Pandora's Box, all the pulling and hauling would start again and we would probably end up in the same spot."

Other Triple A countries also put forward interesting reactions. From the Netherlands (a country which the UK hopes will follow its lead):

Dutch MP Mark Verheijen, EU spokesman for governing VVD party highlighted some points of agreement between the UK and the Netherlands:

“We are also in favour of a lower budget and less intervention by Brussels [Cameron's speech] "showed that he wants to tackle this debate with an open attitude". 

MEP Bas Eickhout (GreenLeft) said on Twitter:

“The positive thing about Cameron’s speech: hopefully there will finally be room for Treaty change: is very much needed, only not in Cameron’s way”

And Finnish Europe Minister Alexander Stubb (who has previously warned that the UK was sidelining itself in Europe) said on Twitter:

"Cameron speech more constructive than expected. Like most of the economic principles. Disagree on deepening". Adding later, "Cameron speech clarifies things. At least we know what the Conservatives want. They want to stay in the EU. #thespeech #reluctantbride".

We'll update with reactions from the Mediterranean - which, as you might expect, have been far less receptive. 

BAE/EADS deal collapse shows national interests still rule when it comes to defence

A lot of people on both sides of the Europe debate got very excited last month about the ‘Future of Europe’ report produced by a group of EU Foreign Ministers chaired by Germany’s Guido Westerwelle. The report was certainly controversial, not least for suggesting “more majority decisions in the Common Security and Defence Policy sphere… and in the longer-term a European defence policy which for some members could eventually involve a European army.”

As we argued after the report was published:

“There is significant momentum for more integration in economic, fiscal and banking affairs, but its hugely unlikely to spill over into foreign policy which exists in a parallel political sphere… The context for this whole initiative is effectively German domestic politics… For Merkel this serves as a useful exercise at a time when the German government is über-sensitive to accusations that it is not sufficiently ‘pro-European’ - but without actually having to do anything."

This interpretation has arguably been supported by Merkel’s actions over the BAE/EADS merger, when she pulled the plug on the deal. As the Guardian reported:

“Sources close to the deal said that the German chancellor, Angela Merkel, had emerged as the most significant obstacle to an ambitious transaction that would have created an industrial behemoth with 220,000 employees worldwide, making products from nuclear submarines and Typhoon fighter jets to the A380 superjumbo.”

“Speaking before the deal was officially terminated, the source said: "The fundamental problem is that Merkel does not feel comfortable with the deal, full stop. The source added that the German leader appeared to have deep concerns over the notion of merging a civil aerospace manufacturer with a defence group.”

So national interest considerations when it comes to defence are not dead yet it appears… even in Germany.

Westerwelle's journey into fantasy world

The report presented by the so-called ‘Future of Europe’ reflexion group of eleven European foreign ministers, set up by Germany's Guido Westerwelle, hasn't gone down well in all quarters. The initiative was well-intentioned, for sure, but that's what you get when you suggest that Treaty changes should be decided by super-QMV, we suspect.

Der Spiegel quoted a European diplomat "scoffing" at the initiative:

"It is unimportant for the future of Europe, but very important for the future of Westerwelle."

Ouch. The recipe for this report has been largely concocted within domestic German politics with an added pinch of Polish foreign policy - and it's an odd exercise to spend valuable time on. Swedish Social Democrat MEP Marita Ulvskog - hardly anti-EU - described it best:

"I think it's regrettable that the EU spends so much time on something that by my standards are pure fantasies and so incredibly far from reality...there's no popular support [for this] whatsoever."

EU leaders have enough on their plates trying to match austerity with structural reforms and re-jigging the role of the ECB, without entering the realms of fantasy. Herr. Westerwelle might fancy himself as Narninian character but unfortunately we're living in the real world and not in a wardrobe.

Westerwelle's Future of Europe report - worth getting excited over?

The so-called ‘Future of Europe’ reflexion group of eleven European foreign ministers, set up by Germany's Guido Westerwelle, to discuss and propose ideas on organisational and structural change in the EU held its closing meeting on Monday. Yesterday it released its final report and conclusions, the broad thrust of which is that, to emerge from the crisis, Europe needs more economic and political integration.

In terms of the economic and fiscal side, the majority of the proposals in the document have already been agreed or proposed, such as the “reinforced economic governance framework” – i.e. the fiscal treaty and a single supervisory mechanism for eurozone banks. Even the possibility of making the ESM into a fully-fledged European Monetary Fund has already been voiced. Furthermore, these proposals will only apply to eurozone members and any non-euro members who participate voluntarily.

It is therefore the political/institutional side that is the most interesting and here are the key points that we’ve picked out:

• More powers for Baroness Ashton and the EU’s External Action Service;
• More majority decisions in the Common Security and Defence Policy sphere including joint representation in international organizations where possible, and in the longer-term a European defence policy which for some members could eventually involve a European army;
• Strengthening the Commission should be strengthened so it can fully and effectively fulfil its role as the engine of the Community method;
• Moving to a super-qualified majority for future EU Treaty revisions (with the exception of enlargement) which would be binding for those Member States that have ratified them;
• A more “streamlined and efficient system” of EU governance which could include a directly elected Commission President, a European Parliament with the powers to initiate legislation and a second chamber for the member states.

Most of these proposals have been around the block once before but some journalists have gotten very excited about this, with the Guardian splashing the story on its front page. Running with a "Britain is isolated" theme it also noted that:

"The likelihood is that the 11-country consensus will swell into a majority among the EU's 27. Britain also stands apart from this. The 11 include Germany and France, the big ones, plus Italy, Spain and Poland – after Britain the biggest EU countries.”

Well, not quite.

Sure, some of these proposals are conspicuous, and certainly they pose a challenge for Britain. However, many of them have almost no chance of going ahead, certainly not in the immediate future. Firstly, the report represents less of a consensus amongst the relevent states and more of a brainstorming session with lots of dissenting views. As the note itself states:

“The report reflects our personal thoughts. We wish to underline that not all participating Ministers agree with all proposals that have been put forward in the course of our discussions, and that the Member States’ individual treaty obligations and rights within the various policy areas have to be taken into account.”

As stated above, there is significant momentum for more integration in economic, fiscal and banking affairs, but its hugely unlikely to spill over into foreign policy which exists in a parallel political sphere. This is simply a way to re-state the long-standing German desire for a Europeanised foreign policy (the practical difficulties of which have been made clear many times, most recently over Libya).

Super-QMV for treaty change won't happen either - not least since Berlin itself would block it if push comes to shove, as would Paris - unless they would be willing to risk - for example - QMV on the European Parliament's second seat in Strasbourg. 

Banking union, and calls for EU treaty negotiations to be opened by 2014 - as called for by Barroso in his 'state of the union' speech last week - is where the story is at.

The context for this whole initiative is effectively German domestic politics. While no one can question Guido Westerwelle’s European credentials, he is arguably one of the most side-lined Foreign Ministers in the whole EU, and the Future of Europe group is a way for him to show he's still a player.  For Merkel this serves as a useful exercise at a time when the German government is über-sensitive to accusations that it is not sufficiently ‘pro-European’ - but without actually having to do anything. 

Finally, it is worth contrasting the lofty idealism of such - and similar - proposals with the cold, harsh realities of public opinion. As we reported on Monday, support for the EU and the euro has hit an all-time low in Germany, in France a majority of those surveyed said that given the opportunity now, they would vote against ratifying the Maastricht treaty, while the EU debate in the Netherlands is also become more complex.

You're wrong, Signor Monti: National parliaments are not the problem - they're the solution

Italian Prime Minister Mario Monti has launched a diplomatic offensive in Germany, involving several interviews with the main German dailies. However, he made a faux pas while talking to German magazine Der Spiegel. Monti said,

"If governments allow themselves to be completely bound by the decisions of their parliaments without maintaining some room for manoeuvre in international negotiations, then a break-up of Europe will be more likely than closer integration."

Excuse us? An unelected technocrat instructing national governments to ignore their parliaments? Whatever Monti tried to achieve with these remarks, it didn't work. And he has already experienced a backlash in Germany, where if anything, there's close to a cross-party concensus over the need for giving the Bundestag more oversight not less, in the wake of the eurozone crisis and the multi-billion euro bailouts. The various rulings handed down by the German Constitutional Court during the eurozone crisis, demanding a stronger role for the Bundestag, also shows how Monti is messing with some pretty fundamental democratic settlements (see here, here, here and here).

Unsurprisingly, Monti has attracted criticism from across the German political spectrum. German Foreign Minister Guido Westerwelle (from Merkel's junior FDP coalition partner) said,

"Parliamentary control over European policy is out of any discussion. We need to reinforce, not weaken, democratic legitimacy in Europe."

Alexander Dobrindt, the Secretary General of the CSU (the Bavarian sister party of Merkel's CDU) was far less diplomatic,

"The greed for German taxpayer money is blossoming in undemocratic ways with Mr Monti...We Germans will not be prepared to eliminate democracy in order to finance Italian debts."

The deputy leader of the opposition SPD faction in the Bundestag, Joachim Poss, suggested that the "unspeakable Berlusconi years" had undermined the image of parliament in Italy, and added,

"The acceptance of the euro and its rescue is strengthened through national parliaments and not weakened." 

The en plein of rebukes was completed by the European Commission, with spokesman Olivier Bailly saying (have they started to learn?),

"The European Commission respects the competences of national parliaments."

All of this led Monti to clarify his stance in a communiqué:

"I just wanted to stress the need to maintain a continuous and systematic dialogue between [national] governments and parliaments, in order to make steps forward in the process of European integration." 

But Monti's remarks give testament to a most concerning elitist mentality, which has all too often been evident in the history of European integration: democratic scrutiny is a nuisance that should be avoided wherever possible. If he thinks that the Europe that emerges from the eurozone crisis can be built on backroom deals struck between a handful of EU leaders, under the radar of national parliamentary scrutiny, he may be in for some very unpleasant surprises. Continuing down that road will result in the rise and rise of some seriously populist, anti-EU parties as voters look for alternatives. The baby will have been thrown out with the bathwater.

National democracy is not only a matter of principle but also serves a practical purpose: actions and policies that enjoy democratic legitimacy have a far greater chance of standing the test of time. Therefore, national parliaments are not the problem in the eurozone crisis, they are a big part of the solution to it.

Ironically, as he struggles to push reform measures thorugh his own parliament, Monti may soon realise just how wide of the mark his comments were.    

Quote of last week

“The EU can’t increase its budget, but has to use its resources better than it has done so far… We need to re-think of the use of EU funds. Calculating what share of each country’s contribution comes back in the form of European subsidies is no longer fit for purpose. This ultimately leads to aberrations such as EU subsidies going to day-spas or romantic hotels. We are all familiar with absurd examples of this type of subsidies in our own country. With European taxpayers’ money, we must achieve better efficiency quotas and demand better results.”

- German Foreign Minister Guido Westerwelle speaking in the Bundestag on Friday.

Hear hear! As we have flagged up repeatedly, because of its flawed design, the EU budget is particularly prone to mis-allocation of resources and poor project selection.

Seriously, for how much longer can Europe afford having such an economically irrational policy at the heart of its common project?

Incidentally, if you're around Brussels tomorrow, we're organising an event on this very question, i.e. on how the EU budget should be reformed.

Is this party over?

Yesterday's elections in the German region of Saarland saw a somewhat unexpected surge for Angela Merkel's CDU party, which won 35.2% of the votes, ahead of the Social Democrats (SPD) on 30.6% and the far-left Die Linke on 16.1%.

As Torsten Krauel comments in Die Welt, despite expectations of an SPD victory, “The CDU held its own. Angela Merkel will appreciate this when it comes to the formulation of further conceivable eurozone rescue packages”.

But perhaps equally significantly, Merkel’s junior coalition partner at the national level, the FDP, won only 1.2% of votes - a massive drop of 8% compared with the previous elections. In fact, the FDP only just beat the neo-Nazi NPD party by 267 votes.

This also means that in all the regional elections that have taken place over the last two years, the FDP has only managed to get re-elected its heartland of Baden-Württemberg, and even then they just about scraped in with 5.3% of the vote. Despite its history as a party of government (it has often played the role of kingmaker for either the SPD or CDU/CSU), it is literally being wiped off the map, having completely failed to re-invent itself.

As the party stares into the abyss, former party leader and one-time golden boy of German politics Guido Westerwelle (in our view increasingly marginalised as Foreign Minister) organises conferences looking at the prospects for fundamentally re-shaping the EU's constitutional architecture after the crisis, which although undeniably important in the longer term, can hardly be deemed to be a priority for voters concerned about the 'here-and-now' of the eurozone crisis and Germany's role in the bailouts.

Meanwhile, Germany’s young and swinging Pirate Party, which has been critical of the bailouts, came fourth with 7.4%, meaning it has secured seats in Saarland’s regional parliament for the first time. It also won seats in last year's regional election in Berlin and looks competitive in polls ahead of the impending elections in Nordrhein-Westfalen, Germany's most populous state. The Pirates are also contributing to a wider cultural change in German politics, for example pushing mainstream politicians to become more social media-savy, e.g. by joining Twitter, which the Pirates have utilised to great effect.

So as the FDP's star wanes (or more accurately comes crashing down to earth), the Pirates are definitely the ones to keep an eye on...

Have the Germans been good Europeans this week?

Earlier this week, German Foreign Minister Guido Westerwelle held a meeting with a number of his European counterparts dedicated to 'conceptualising' the political composition of Europe after the crisis has passed and provide some though leadership.

Ahead of the meeting, the German Foreign Ministry released a Communication entitled “Explaining Europe, Discussing Europe”, which put Germany’s EU policy into ideological context, including statements like:

“Our country is prospering in the united Europe. The fact that we have closer ties with our European neighbours today than ever before is a tremendous enrichment for us... Europe is the definitive answer to 'the German question'. That is why we bear a particular responsibility for ensuring that European integration is carried forward with our neighbours in France, Poland and the other member states."

To what extent Westerwelle's initiative enjoyed support from across the German Coalition government, including the Chancellery, as well as the Bundestag and the German public as a whole, is an open question.

However, as we have pointed out on numerous occasions, the above rhetoric is a reflection of Germany’s ideological commitment to European co-operation in the post-war era. However, modern Germany also has a number of other important ideological foundations such as a commitment to low inflation and restrained monetary policy, a strong system of political checks and balances via the Basic Law, and a strong tradition of individual rights and liberties. The realities of EU integration often clash with these other key principles, as a number of stories from Germany this week have served to illustrate. We will briefly cover these in turn:

1. The size of the Eurozone bailouts

While opposition to the bailouts is hardly a new development in Germany, we learnt this week that the German government looks to have finally dropped its opposition to running the eurozone’s two bailout funds, the temporary EFSF and the permanent replacement ESM in parallel, or possibly even combining them. The government decided its position had led to Germany being isolated within Europe, however as Handelsblatt reports, many MPs within the Coalition are unhappy and could rebel on the issue.

2. The EU’s Data Retention Directive

This has always been the subject of a long-running dispute between the EU and Germany after Germany’s Constitutional Court (often an inconvenient truth for EU laws) ruled that the Directive was incompatible with the Basic Law. Consequently, the government repealed the legislation but has not to date put forward a replacement, meaning it is in breach of EU Law. Germany has failed to heed the Commission’s reprimand back in October, and this week EU Home Affairs Commissioner Cecilia Malmstrom (whose native Sweden has so far also failed to transpose the Directive into national law) insisted that Germany issues a commitment to doing so within the next four weeks. The Directive is very unpopular in Germany, as yesterday’s Süddeutsche comment cartoon shows:



3. The ‘VW’ law

Another long-standing dispute between the EU and Germany concerns the so-called VW law, under which the state government of Lower Saxony controls a blocking minority of 20% of Volkswagen shares. The EU has long contested that the law illegally restricts the flow of capital in Europe, but despite being amended in 2008 following an ECJ ruling, the Commission announced this week that it would again seek to challenge it prompting German Economy Minister Philipp Rösler to say that the government stands by the law and intends to “aggressively defend” it.

4. Revision of the Posted Workers’ Directive

Another story in the German press this week argued that the Commission’s revision of the Posted Workers’ Directive could make it far harder for member states to crack down on black market labour, clearly a big issue in Germany’s large construction sector. An editorial in Die Welt argued:

“Brussels should not regulate every aspect of life to the smallest detail…member states constantly get the feeling that the democratically barely legitimised EU commission interferes in things which are none of its business, and, what is worse, their interventions only make things worse.”

As the four examples illustrate, when rhetoric clashes with realities of EU integration, Germans are often very keen to defend their own way of doing things - just like all other member states...

Hague can't ignore prospect of treaty change for much longer

Speaking on Andrew Marr's show yesterday, William Hague repeated his view that there is no "immediate prospect" of repatriating powers from Brussels. "The repatriation of powers, which is something I support by the way, is not an immediate prospect because no countries are proposing widespread treaty change," he said.

"That may change, but at the moment, that is not what they are proposing..."

But as we've said before, this is all moving much faster than the UK Government is letting on or perhaps would like. Contrast Hague with German Foreign Minister Guido Westerwelle's rather more urgent tone in an interview with the FT last week. He said that Berlin wants to persuade other members of the EU to draft changes to the bloc’s founding treaties at a new 27-nation convention (or IGC) that would take place in 2012.

The Convention should be given a clear mandate and a one-year time limit to deliver results by mid-2013, when the eurozone’s permanent €500bn rescue fund – the European Stability Mechanism – is supposed to come into effect, he said. "We need treaty changes to overcome the shortcomings of (European) construction."

He added that the Convention should consider whether the European Court of Justice would be used to enforce budgetary discipline, and if a “stability commissioner” for the euro should be appointed, suggesting “Probably both are necessary.”

These are clearly "widespread treaty changes" that Hague seems to suggest are far off on the horizon but 2012 is less than two months away. Yes, the actual process of negotiating Treaty changes takes years. But, which the UK govenrment should know from experience, getting in early and getting with a clear agenda, is absolutely vital if a country wants to influence the outcome.

It's time the Government picked up the pace.

The euro pact and Germany: Triumph or a coming bust-up?

The Telegraph's Ambrose Evans-Pritchard describes the weekend deal at the EU summit as a "total German triumph". He paraphrases Chancellor Angela Merkel saying that "whoever wants credit must fulfil our conditions".

Regular readers of this blog will know that we rate Ambrose very highly (at a time when most other journalists, including the FT gang, couldn't spot a currency-related credit crisis from a yard's distance, he warned against what we've seen in the eurozone over the last year).

On this one, however, we think that his assessment might be a bit premature.

Perceptions matter tremendously in markets as well as in politics. And the perception in Germany is certainly not one of triumph.

Die Welt quotes a top EU diplomat describing Merkel's "pact for the euro" as an "empty shell", predicting that "in the coming weeks the spreads of troubled countries could further increase". An analysis in the newspaper notes that the pact "remains far beneath the original expectations of the German government", given the large room for manoeuvre that member states are given in its implementation. The headline in the paper reads: "Merkel's secret euro capitulation".

And Merkel might even face a fight within her own coalition about the terms and crucial details of the euro pact.

Although FDP leader and Foreign Minister Westerwelle called the deal an acceptable compromise, liberal MP Frank Schaeffler said that "the result contradicts the position of the FDP group in parliament”. Volker Wissing, finance spokesman of the liberal faction in the Bundestag stressed that an earlier agreement on this among majority parties in the Bundestag "had excluded what has now been decided at government level", as he expected "very difficult talks", which could endanger the German Parliament's approval of the deal.

"It is surely close to a transfer union," Michael Meister, deputy parliamentary leader of the Christian Democrat (CDU) party added (and it was not meant as a positive remark). CSU MP Thomas Silberhorn bluntly said that "the government has stepped over a red line that the parliamentary groups had clearly defined."

Just ahead of the summit, another top Christian Democrat politician, Bundestag Speaker Norbert Lammert, had voiced concern about the whole thing, lamenting that "many representatives still don't feel sufficiently informed".

It is not clear whether these (prominent) backbenchers will in the end vote down the agreement. Bloomberg claimed this afternoon that several backbenchers have signalled their willingness to vote for the deal when it reaches the Bundestag.

But the strong talk is a reminder of the nervousness about all of this in Germany, especially in the run-up to the key regional elections in two weeks time in Baden-Württemberg - a stronghold for Merkel's CDU where the party could now suffer defeat.

It doesn't help that outgoing Bundestag President Axel Weber has stepped up his criticism of current eurozone policies. In a hearing at a Bundestag committee this week, he will warn European governments against making any bond purchases as a means of bailing out weak Eurozone countries, saying

"the result would be that private creditors and national financial policymakers would be relieved even further of their responsibility, and taxpayers of the countries doing the financing would be burdened with further, possibly substantial risks."

Chances are that Merkel will manage to push through this deal in the short term - though the German Parliament may demand some red meat in return for giving its approval.

But, as the EU correspondent for the Frankfurter Allgemeine Zeitung, Werner Mussler, warns: “the consistent loyalty of Germans to Europe is facing a test.” And Europe's biggest tabloid Bild today carries the headline, "saving the euro gets increasingly expensive!".

Some members of the German establishment have already started questionning the very premise on which Merkel has based her bail-out concessions (saving the euro, even with the risk of more bail-outs and a move away from traditional Bundesbank policy is cheaper than refusing to pay). For example, the former boss of the German industry federation BDI, Hans-Olaf Henkel. Although a former euro enthusiast, he now argues in favour of splitting up the eurozone, writing that it has become “a transfer union, a community of redistribution in which a new competitive discipline will emerge: who can tap the others for the greatest amount."

Berlin's biggest fear is that Mr. Henkel is finding it increasingly easier to recruit more allies.