17 December 2005

Good news Saturday

After a few weeks of early-winter hibernation, Good news Saturday returns today with the unexpectedly positive results of the EU budget negotiations in Brussels.

2005 has been an annus horribilis for the European Union, what with the draft constitution being rejected by both the Netherlands in France, and its ratification by various other governments stalled in the wake of those results, along with the unsuccessful budget negotiations which ended without a deal earlier in the year. But now it would appear that the year will be ending on a modest high note, with the provisional agreement of a new budget deal late last night in Brussels, after two days of negotiations.

The British Prime Minister and current EU President, Tony Blair, made last minute concessions over the UK's budget rebate in order to secure agreement on the budget. Blair agreed to relinquish some 20% of the rebate it would have received over the next seven years. That money will instead be used to help pay for the ongoing costs of last year's enlargement of the EU. In return - though it's hard a tit-for-tat concession, France agreed to a wide-ranging budget review, including the Common Agricultural Policy, in 2008-9. This represents movement on Chirac's previous stance, in which he had insisted that farming subsidies under the CAP not be touched until 2013. Though all of the member states will have the chance to veto the 2008 review, France will be under pressure to give ground on the CAP, given Blair's agreement to relinquish some of the UK's rebate. Of course, on the other hand, Tony Blair is going to take a pasting at home from the Eurosceptic, tending Europhobic, sectors of the press and the Conservative Party, who will level charges of "surrrender" and "capitulation" at him. When that happens (which will start tomorrow), it'll be precious little comfort to him that he is today, for once, being praised by other European leaders for doing the right thing, rather than being accused of being divisive and obstructionist, as has previously been the case.

BBC News has a breakdown of the most important points of the EU budget agreement here.

From a German perspective, there is further good news coming out of the Brussels summit, namely that Angela Merkel appears to have put in a command performance at her very first summit as Chancellor. According to both German and British reports, Merkel played a key role in brokering yesterday's deal. This represents an important change in both style and substance from that of her predecessor, Gerhard Schröder, who had a reputation for cosying up to Chirac and the French position, and striking special deals with the French before EU summits even began, thus serving to make compromise deals more difficult rather than facilitating them.

Merkel and her advisors will be very pleased with this perception of her performance, not least because she is still in the crucial 100-day "grace period" of her Chancellorship, in which lasting public opinion about her competence and suitability for the post will be formed.