Walker's World: Europe's new deadlock

By MARTIN WALKER, UPI Editor Emeritus  |  Nov. 30, 2009 at 10:09 AM
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WASHINGTON, Nov. 30 (UPI) -- It is hard to see how the European Union escapes deadlock in the years ahead. Although most of the media attention in recent weeks has been focused on the two new top jobs of EU president and foreign minister, the biggest change in the EU's institutional system looks likely to be the growing power of the European Parliament.

Thanks to the Lisbon Treaty, almost all the policy issues of the EU now fall under the co-decision rule (it is now called the "ordinary legislative procedure"). This means that the Parliament has equal weight with the national governments that meet in the EU Council, and where traditionally the crucial deals and horse-trading have been done.

Henceforth, those deals cobbled together in the early hours of the morning will need ratification by Parliament in the cold light of day. So, for example, should a summit-level decision to be taken to admit Turkey as a new member state, the Parliament will have to agree. And should the EU's so-called Rapid Reaction Force come into military being and the heads of government decide to deploy it in some overseas crisis zone, the Parliament will have to be given a say in the matter and could theoretically block it.

Moreover, the Parliament now gets oversight over the whole range of the EU budget, and not only its discretionary spending, as at present. It remains to be seen how much impact this will have on the next budget negotiations, which have hitherto been decided by the heads of government at their summits. But it will almost certainly make it much harder, if not impossible, for the next budget to take money from poorer regions of richer countries to give to much poorer new member states. It will also make the next budget round on agriculture much more complex and difficult.

In short, the EU Parliament is going to resemble the U.S. Congress in its power to slow things down and prevent them from happening, to amend proposed legislation and to frustrate the plans of the executive. Anyone who likes the way the U.S. Congress has dealt with health reform over the past few months is going to love the new EU Parliament.

It will probably take the Parliament some time to grow into its new powers. For example, its version of Question Time in the British House of Commons, which saw European Commission President Jose Manuel Barroso face the elected members for a brisk hour, was more entertaining than informative, as members vied to get as many questions as possible into the one minute the lucky ones were each allocated.

The Parliament's new powers will also swell the importance of the two main parliamentary blocks, the moderate conservatives of the European Democratic Party and the Party of European Socialists. These are odd beasts. The PES contains ex-Communists and moderate British and Scandinavian social democrats, who are often more market-friendly than many of the conservatives.

So now that Barroso has picked his fellow commissioners for the next five-year term, Parliament will have to approve them, which is likely to mean in practical terms that either the PES or the EDP can block an appointment, or at the least wrest certain promises of policy concessions.

This is starting to worry the British, who fear that Prime Minister Gordon Brown may have been focusing on the wrong job when he used his clout to make Catherine Ashton into the EU's new foreign minister. French President Nicolas Sarkozy by contrast managed to make Michel Barnier into the new commissioner for financial services, with what is suspected to be a mandate to make Paris into a co-equal financial center with the City of London. Barnier's suspicion of free markets is well-known; when he was France's minister of agriculture last year, he blamed the spike in food prices on "too much free-market liberalism."

"We now have none of the three key economic jobs in Brussels," mourned Michael Fallon, a Conservative MP on the Treasury Select Committee. "This has all happened at an incredibly dangerous moment when there are firm proposals which will govern regulations on banking, insurance, private equity and hedge funds."

British bankers are more than nervous after Sarkozy said earlier this year that he wanted a European banking regulator with "real sanctioning power." The Socialist group in the EU Parliament is dominated by German Social Democrats whose leaders called hedge funds "locusts." And since the British Conservative Party flounced out of the EDP complaining it was too federalist, the Brits have few allies in Parliament.

There are 27 commissioners, one for each member state, but Barroso has carefully assigned the key jobs to veterans of his last Commission and saved key jobs for the big powers. So Spain's Joaquin Almunia has been shifted from financial services to antitrust and competition, replacing Holland's Neelie Kroes, who has been moved to telecoms and the digital agenda. Finland's Olli Rehn has gone from the enlargement portfolio to the economy and monetary affairs, to be replaced by a little-known Czech, and an even less known Romanian gets agriculture. Germany has got the increasingly important energy job, the Danes have got climate change, the Poles have the budget and the Italians have industrial policy.

And the Brits are stuck with the high-profile Foreign Ministry, which means lots of travel and photo-ops. But since the Europeans seldom agree on foreign policy, it is likely to prove cosmetic and even meaningless, while the real power rests with the commissioners who draft the new rules on financial and industrial affairs and competition, so long as they can get the new Parliament to go along.

If they cannot, expect deadlock, and a legislative process that looks like U.S. health reform.

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