LETTER TO EU HEADS OF GOVERNMENT

Along with other members of the “Friends of Europe” group, I have signed to following letter to the EU Heads of Government.  They need, I believe, to look beyond the immediate problems of the Union....The Greek crisis, Ukraine, Transatlantic investment  and the UK Referendum....and present a vision of the future of the Union. Only in that context can these immediate problems be solved.

Sir,

Discord between the European Union's member governments has been reaching a crescendo, with taunts exchanged not only between Athens and Berlin but almost routinely between some other EU leaders. 

A culture of recrimination and rebuke is growing to eclipse the commitment to intergovernmental solidarity and joint purpose that so successfully nurtured European integration over many decades.

Europe’s leaders would do well to turn to the spirit of the Schuman Declaration sixty-five years ago, for solidarity paved the way for the European Union.

In today’s terms, that means both North South and East West solidarity between member states, and between large countries and small.

Finger-pointing by national governments that are beset with their own particular political and

economic difficulties is understandable. But it is profoundly unhelpful. We Europeans face daunting longterm problems that can only be confronted and then overcome by a reaffirmation of unity, a fresh sense of common purpose and bold action.

The EU's structural challenges are well-known, but not given sufficient emphasis. In most countries of the Union demographic shrinkage is set to reduce active labour force; pension reform has made progress in a number of European countries, but much remains to be done, if we want both financial and social sustainability. Increased immigration could possibly be part of the the answer, but brings with it heightened social and political tensions that carry their own serious risks which the Union must formally and publicly confront.

Enhancing the quality of our human capital is another and crucial part of the answer, but currently we see an alarming disinvestment in education in a number of countries.

Many European governments now hope they see signs of economic recovery, yet the underlying trends are less encouraging. Our slowness in embracing new technologies is handicapping our productivity improvements - twenty years ago Europe's productivity improved at almost twice the rate as in America, and now it's about half that of the U.S. The implications for our international competitiveness in what is being labelled the 'Asian century' are not encouraging.

On the EU's home front, it is surely time that everyone with a hand in shaping Europe's future awoke to the implications of the continuing eurozone crisis. Disagreements between creditors and debtors are cloaking the more important issues of inadequate design and of the North-South gap within Europe.

The latter is widening fast, and unless checked could yet tear the European Union apart.

We believe that a sense of shared purpose between EU governments must be restored. To that end, we urge the European Council to take the opportunity of its next scheduled summit meeting on June 25 to publicly commit to a 'Doctrine of Unity'. This would see our national leaders pledging themselves to far more cooperation and mutual support because that's explicit in EU membership though decreasingly observed. This in no way implies “blank check” financial support for any particular member state, but it does seek to reinforce the links that are so essential to Europe.

What is needed is for the Union's heads of state and government to spell out the underlying weaknesses that cloud Europe's future. These should be the strategic threats we Europeans must all face up to, as distinct from short-term difficulties. It should put into their proper perspective the damaging public spats between some governments that have been doing so much harm to the EU and to the credibility of the single currency and the common foreign and security policy.

Such a declaration by the European Council would ring loud alarm bells within the EU, and would send an important signal around the world that Europe may be down but is far from out.

Yours,

WILL EUROPE ALLOW A BANKRUPT UKRAINE TO FALL BACK UNDER RUSSIAN DOMINATION?

Ukraine is on the brink of financial collapse.

It is not able to meet interest payments it is due to make this week. Its GDP fell by 6.8% last year and is liable to fall by an even greater extent this year. Meanwhile it is having to defend itself against a neighbour which guaranteed its frontiers as recently as 1994.

Instead of stepping forward to help Ukraine financially, the EU and the United States are both leaving the job to the IMF. The IMF is offering Ukraine $40 billion whereas the EU says it can only manage $2 billion.

The European Union has already extended forty times as much credit to Greece, as it has given to Ukraine, whose population is four times that of Greece. If this ratio reflects the EU’s real priority, it is unbalanced. 

GDP per head in Greece is, after all, about three times that of Ukraine. Like Greece, Ukraine has a lot to do to create a functioning and efficient legal and administrative system, stamp out corruption, and collect taxes fully and fairly .But Ukraine is having to do this while  recovering  from the effects of a Communist system which was imposed on it from outside since 1919, whereas Greece has been the democratic shaper of its own policies for many years.

Greece is , of course, in the EU and the euro, and Ukraine is not, but both are in Europe, and both aspire to a democratic European future.

Furthermore Ukraine had it borders guaranteed in the Budapest declaration of 1994 by EU countries, including Britain and France, and by Russia and the US,  in return for Ukraine giving up nuclear weapons. 

Despite this, Ukraine was invaded, and portion of its territory annexed, last year by one of its guarantors, Russia, because Ukraine wanted to make a modest cooperation agreement with the EU.

Notwithstanding that, the EU is now being stingy in helping Ukraine in its financial crisis, and is fixated instead on the drama in Athens.

Ukrainians believe they have a European destiny, and are prepared to die for it.

The Russian leadership, on the other hand, believes that Ukraine, with its Russian speaking minority, is in their sphere of influence, and sees a link up of Ukraine with the EU as a form of foreign interference in their backyard. One would have to respond that this view is not in accord with Russia’s guarantee to Ukraine of 1994, nor with international law.

The entire post World War Two European security order rests on acceptance of international law.

Similarly, any prospect of voluntary nuclear disarmament in future must depend on solemn obligations, like the Budapest commitment given to Ukraine in 1994, being seen to be honoured.

In Ukraine’s case, all the EU is expected to do is provide financial help.

But if Ukraine falls, the Russian threat may move on to other countries, with Russian speaking minorities, like Latvia and Estonia, which are NATO members  and  to whom most EU countries (not Ireland) have a solemn Treaty based obligation to provide military help if their  territory is threatened.

Meanwhile the Greek government, while looking for new loans and debt write offs from the EU, is ostentatiously aligning itself to the very country that has invaded Ukraine,  Russia. It is looking for more credit from the EU, without implementing reforms that would generate the long term growth, which would enable those loans to be repaid.

In contrast, the new Ukrainian government is implementing painful reforms to increase the growth potential of its economy, for example by eliminating inefficient consumption subsidies, which have quadrupled gas prices paid by Ukrainian households. Parts of its reform programme are being delayed in its parliament by opposition figures, like Julia Timoshenko, once the darling of the western media and still part of the EPP family to which Fine Gael and the German CDU belong.

Ukraine’s financial situation is now so critical that President Putin believes that all he has to do is sit and wait, and Ukraine will collapse back into Russian control simply because, in the absence of large western credits, it will run out of money. 

If this happens, and if the EU has continues to do little or nothing to stop it beyond talk, that will a huge blow to confidence in the EU’s ability to defend its values and help its friends.  Other countries on Russia’s perimeter will feel they too will have to make a deal with Putin, rather than rely on the EU. 

In Ukraine’s case, European countries do not have a Treaty obligation to give military help . But, in their own interests, they should give generous financial help now, to ensure that a success in Ukraine does not embolden Russia to undermine countries like Latvia and Estonia, which also have Russian speaking minorities, but where most European countries do have a Treaty based military obligations to help.

When questioned in a recent Pew poll, as to whether they would be willing to use force to defend another neighbouring NATO country, that found itself in conflict with Russia, 51% of Italians, 53% of French people and 58% of Germans answered that they would not.

If that frightful dilemma is to be avoided, it would be wise for Europeans to draw the line in Ukraine now, by providing that country with enough financial help to build a properly functioning state, that can pay its way and look after itself, and be capable on its own of resisting intimidation by its big neighbour.

ANGELA MERKEL

“Angela Merkel” by Alan Crawford and Tony Czuczka is not a conventional biography of the leading political figure in Europe. Rather it is an exploration of her approach to politics around different themes.....her approach to the United States, her response to the Greek crisis, to the nuclear question, and the future of the European Union.

Her style is different from her predecessors Helmut Kohl, and Gerhard Schroeder.

She would never have taken Schroeder’s strong stand against the Iraq War because of her emotional pro Americanism, something that flows from having dreamed of America while growing up in Communist East Germany.

She does not have Kohl’s emotional commitment to European political Union. Kohl, whose life was seared by the effects of family losses in the two World Wars, wants to merge Germany into a united Europe to prevent future wars. It is something about which he is deeply emotional. 

Merkel’s approach is more practical, and more in tune with the feelings of ordinary debt averse Germans. She will pay a price to keep Europe together, but not any price. She is not as committed to common European Institutions, like the sole right of legislative initiative of the European Commission, as Kohl was, and is more likely to make deal with a small number of other heads of government of bigger states, bypassing the Commission. This is risky for smaller EU nations. But small nations, by insisting on one Commissioner per member state , have contributed to a weakening of the Commission.

Her approach to all political questions is shaped by her training as a scientist. She looks for lots of evidence before making a decision. She avoids visionary statements, but works through the evidence until she finds a basis for a decision. The weakness of this approach is that, in the absence of a grand vision into which decisions can fit, German public opinion may not be adequately prepared for the decision when it is finally taken.

She makes no effort at all to paint a picture of the future of Europe that would inspire the continent’s 500 million people to make sacrifices to build a joint future. But if the German Chancellor does not paint such a picture, who else has the stature to do so? 

Her pragmatic, cautious, and scientific approach also presumes a degree of rationality and shared interest on the part of her antagonists. Although she is a fluent Russian speaker, she does not seem to have achieved any common ground with Putin. She may be having a similar experience with Alexis Tsipras of Greece.

This is good book but I finished it, feeling that I had acquired a good knowledge of Angela Merkel’s tactical approach to politics, but no greater understanding of her deeper motivations.