CER| Muddy Compromise at the EU Summit in Nice

If one ever needed the perfect example to demonstrate the incredible difficulty of reforming the institutions of the European Union, one could hardly do better than last weekend's European Council meeting in Nice. Tempers flared, patience was severely tested, and all the regular schisms were evident, from the big-small balance to the fast or slow-track philosophy of European integration.

In fact, Nice turned out to be the longest and most difficult summit in the history of the European Council; the 15 heads of government fought until dawn and beyond, far past the anticipated conclusion of the conference, to finally come up with a compromise Treaty of Nice.

Proponents of deeper integration, such as European Commission President Romano Prodi, voiced disappointment at the lack of concessions made by certain member states in retaining vetoes for various policy issues. Big countries wanted to exert their might, small countries countered this with finesse and tenacity, and the result was muddy compromise.

Compromise and fall-out

French President Jacques Chirac took advantage of his country's EU presidency to host "confessionals" with other member states in order to broker solutions to the lagging disputes. France, not exactly an independent and impartial arbiter, curiously marched out of Nice with several important victories, notably maintaining its voting parity with Germany in the Council of Ministers.

However, Germany won some battles of its own, managing to win more seats at the European Parliament.

France's antics did not play well with some participants, including Prodi, who among others hinted that France's refusal to end the voting parity with Germany forced the creation of the convoluted formula for voting.

How ready for enlargement?

Convoluted or no, some form of compromise was clearly needed lest the leaders and the EU in general face even further embarrassment for their inability to confront the challenges of the new Europe that emerged 11 years ago. In the better-late-than-never department, some of the needed institutional issues linked to enlargement were finally dealt with--albeit in a manner that left most member states barely satisfied.

The reweighing of votes in the Council of Ministers included those of candidate states, showing the applicants exactly how much voice they will have upon membership. However, this reweighing also demonstrated to smaller member states how much more their voice will diminish after enlargement.

It pays to talk

Phone lobbying by Polish Prime Minister Jerzy Buzek during the weekend solidified the Polish voice, as the finalised voting system gives Poland 27 votes, making it equal to Spain, and just under the 29 of the "big" countries France, Germany, Italy and the United Kingdom.

The other Central and East European candidate states, all smaller than Poland, were allocated potential votes as follows: Bulgaria (10), the Czech Republic (12), Estonia (4), Hungary (12), Latvia (4), Lithuania (7), Romania (14), Slovakia (7) and Slovenia (4).

Lithuanian President Valdas Adamkus also got on the horn during the weekend, arguing his country's vote total up, resulting in a curious Baltic vote formula of 4-4-7 for Estonia, Latvia and Lithuania respectively, despite populations roughly of 1.5, 2.5 and 3.5 million respectively.

Latvia, relegated to the same four votes as Estonia despite having 40 per cent more people, voiced dissatisfaction with the outcome of this part of the summit.

Reweighing the heavyweights

Two major battles fought in the reweighing of votes were big-versus-small and the question of French-German parity. As different sides refused to give in to any rational and straightforward compromise, the voting formula was made horrifically complicated.

Twice during proceedings, smaller countries, Portugal and Belgium, vetoed plans crafted by Chirac, one of the principle non-benders who made the process exceedingly difficult and acrimonious.

Each motion in the resultant qualified majority voting (QMV) system would require two conditions for passage: securing QMV votes of around 74 per cent of total (once the full and hypothetical enlargement is completed, it would manifest as 255 of 345 votes) and securing votes from countries representing at least 62 per cent of the EU's total population.

However, more importantly, this double test effectively gives a handful of large countries the ability to block any matters decided by QMV. Though by sheer numbers the representation of small states grew, the system still heavily favours the large countries.

What's more, it is even clearer that there is a new heavyweight waiting in the wings. Upon membership, Poland will become an instant major player, perhaps leading to a future Polish-German special friendship that would replace the now fractious German-French one as the driving engine of the Union's development. All that is hypothetical, of course, until Poland becomes a member.

Another missed chance?

Member states failed to surrender many more policy sectors to QMV at this point. That very problem has given birth to suggestions by analysts and pro-Europeans that Nice was a good opportunity squandered.

But some important progress was made at Nice.

Member states agreed to hold another—probably equally vexing—summit in 2004, which could happen after the first wave of new countries are admitted, from current timetables.

Spain yielded on the issue of regional aid, agreeing to abandon its national veto in 2007. Though this is conveniently after the next six-year EU budget is set in 2006, it should free up structural funds for some of the new entrants to the East, some of which certainly need them more than Spain.

Also, France retains its veto against Hollywood—its right of veto in cultural matters—so rest well, Monsieur Depardieu.

In addition, the small states won a battle to keep their own European commissioners, crafting an interesting formula that keeps the larger countries from running roughshod over them.

The total number of commissioners was capped at 27, despite the current 20-member commission already being too unwieldy. By 2005, the larger countries, currently with two commissioners, are also obliged to become equal with their smaller neighbours in having only one commissioner.

The 27-member cap, however, really means nothing immediately, since there is little chance the EU will reach 27 members anytime soon—even if the EFTA members or a renewed independent Scotland were to join—but the principle of one commissioner per country was a victory for small member states such as Finland, as well as small candidate states such as Estonia and Slovenia.

Slovenian Foreign Minister Dimitrij Rupel told Reuters, "The division of mandates is fair and still in favour of small countries. We wanted a commissioner and we got one."

Estonian Prime Minister Mart Laar made a good point after the dust at Nice began to settle, saying that it would be much easier to sell the idea of EU membership to the public in a referendum if the rights of small countries are clearly protected with, for example, the retention of the national commissioner.

The Nice meeting also adopted some other significant changes, such as reallocating seats in the European Parliament. The total number of Members of European Parliament (MEP) will reach 732 upon full enlargement of the current slate of candidate states, with Germany holding a massive 99 seats. Among CEE countries the tally is as follows: Bulgaria (17), Czech Republic (20), Estonia (6), Hungary (20), Latvia (8), Lithuania (12), Poland (50), Romania (33), Slovakia (13) and Slovenia (7).

This is Europe; this is Europe on speed

One issue that will surely become even more contentious after Nice is the "two-speed Europe" proposed by some on the Continent. Mostly in reaction to Britain and Denmark's traditionally cautious approach to further European integration, the idea of a "two speeds" would allow some countries to move faster in certain areas of integration and create easier "opt-out" strategies for those not so keen on diving into the EU's deep-end.

This, of course, is related to the reluctance to expand QMV significantly�the old sovereignty question. Some analysts in the United States compare it to the traditional debate of the right of states vs federalism, but that is missing the point. There is a big difference between nation states and federal states. Delaware and Luxembourg are both seen as tax havens, but their relationship to Washington and Brussels respectively, or even Pennsylvania and Belgium, are of a much different dimension.

The foggy side of Nice

The first part of the summit heralded the signing of a Charter of Fundamental Rights, though its ambiguities fuel opposition from both sides of the political fence. Social activists and Europhiles complain of the document's impotence, while sovereignists and conservatives blast it as the first step toward a constitution and a European superstate.

The summit was also somewhat inconclusive in dealing with the rapid-reaction force as the EU tries to soothe NATO's concerns over a developing European army. France, the only NATO country not part of the Alliance's strategic arm, pushed for the rapid-reaction force to have separate planning structures from NATO and succeeded.

Outgoing US Defence Secretary William Cohen warned the EU about such a development in November in a surprisingly sharp speech, though some wonder if Cohen was rediscovering his Republican roots in echoing Bush policy.

Applause stage right

For the most part, Central and Eastern Europe cheered the outcome of the monumental summit. Overall, the results of Nice may well be lukewarm and confusing, but at least it has given candidate states some cause for optimism.

EU leaders earlier on in the summit stated that enlargement would be possible as early as the end of 2002, and the first new members would be able to take part in the 2004 elections to the European Parliament (reportedly the addition of such wording was the good work of Italy). Though the announcement did not give concrete dates, this is the first true indication that the road to enlargement indeed has an end in sight.

The EU also promised to proceed on accession negotiations, and the looming Swedish presidency is looking to be the vital catalyst—perhaps the beginning of the end—in the process.

Despite all the confusion, bruised egos and knackered minds coming out of the French Riviera, Central and Eastern Europe came out of it a winner. Or, better put, CEE did not come out of the summit a loser.

The distribution of votes for the Council of Ministers gives CEE countries its first look at how much say they will have, while small countries applauded the retention of the national commission member. The rapid-reaction force continues to gain support from many CEE states, which see it as a way to something between a soft and hard security guarantee.

Though many had hoped Nice would produce the blueprint to conclude negotiations with the leading group of candidate states and to give a timetable for membership, what resulted was almost as satisfying: the start of the mechanical changes within the structure of the Union to allow for enlargement.

That may not sound like much, but that alone took years to start grinding forward, and the eyes of the eager candidates will now focus on how Sweden carries the ball until the Gothenburg European Council summit in six months.

More hurdles

However, as with all new treaties, the Treaty of Nice requires ratification by all 15 member states. With many already commenting on how poor or weak the Treaty is, it could be a long road ahead for candidate states eager to see results.

Adding to the mess are other unresolved issues of the Union and enlargement to which Nice did not contribute, most notably and obtusely being the fate of the Common Agricultural Policy (CAP).

Nice is just a start, but that can be seen as a major accomplishment in itself. Whether this has just prepared the ground for a more difficult process in 2004 is speculative; for now, Central and Eastern Europe is happy that it has been included in the re-design of the EU's framework.

Now, all they need from the 15 capitals is... compromise.

Mel Huang, 13 December 2000

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