Blair in Budapest
British charm has its limits
Last Friday, Tony Blair made a quick stop in Budapest in order to try and salvage a deal for the 2007 EU budget. Although gawking outside and inside the Parliament at the building's design and trappings may have pleased his host, the deal he came with did not. Nor did it please any of the other guests at the meeting.
The meeting in Budapest between the so-called Visegrad Four (Poland, the Czech Republic, Slovakia, and Hungary) and the British chair of the EU presidency was to try and persuade the four Central and East European countries to accept a reduction in financial support in terms of development funds. The British press tried to paint a scene of Blair going to Budapest to hammer out a deal that would help the "poor" EU member states of the east. How giving these countries less money as a way of helping them was something that wasn't easily explained, especially given the fact that the prime reason for them joining the EU in the first place was for the money.
The present crisis over the EU budget merely highlights the shaky foundations upon which the EU has been hastily built. Throughout the 1990s there was no clear direction or plan for EU expansion, and the accession countries at the time were simply left waiting. By 2000, when patience in Central and Eastern Europe began to grow thin, the EU finally reacted by letting all those in line come in. Previously, most analysts regarded this as the worst case scenario, and initially saw a wave of four to six entrants. However, as with the introduction of the euro, paralysis in Brussels led eurocrats to some hasty decisions.
In addition to the haphazard way that EU expansion was handled, the present crisis over the budget also reveals the true nature behind the EU. Despite proclamations of it being an ambitious political experiment, a form of cultural union, a historical eventuality, or a combination of all these (and more), the EU is nothing more than an economic concept, no different than that of the North American Free Trade Agreement (NAFTA) across the Atlantic. In fact, the biggest beneficiaries of EU expansion so far has been western Europe, which has been dumping their products in the east and buying up privatised industries, including energy companies. Thus, the euro, the erasing of borders between member states, etc., are not for the convenience of European citizens, but primarily for big business interests. The windfall advantageous European citizens do gain from all this, however, is often used to justify the "coming together" of Europe.
All this sounds fine when things are relatively stable on the economic front, but in times of crisis Europeans tend to display their individual independence, a trait of their often tragic history. Hence, we have recently witnessed not the "coming together" of Europe but the "breaking apart" of member states. This was made quite clear with the rejection of the European constitution by the EU's two founding members, France and the Netherlands.
The crisis over the 2007 budget, therefore, is simply a continuation of this process. Eurocrats appear to think that recent failures with the European constitution and the squabble over Turkey's membership can be easily swept under the under the rug. Yet by ignoring the true dynamic behind these failures, eurocrats are playing a very dangerous game indeed.
The British, meanwhile, have been handling the situation as if they were playing domestic politics. One of the polished tricks of Tony Blair and New Labour is to move forward on a pseudo-policy in order to prepare for the real policy which is to come along afterwards. This is done to either first gauge reaction toward a policy or to an outcry over an issue that is known to be unpopular. By doing so, the initiative is maintained so that whatever is subsequently introduced, which is the main objective in the first place, is then accepted as a "compromise".
Need for Cash
This explains why even though the budget hasn't been officially released, the British presidency is already making the rounds. The problem with Blair is that EU politics is not the same as British politics, and in this case he's not dealing with public opinion but political leaders who have their own agendas -- some of which are well hidden. Nevertheless, Blair has been counting on his perceived popularity within Central and Eastern Europe as one of the "champions" of EU expansion to help him win over his counterparts within the new member states.
Still, Blair is going to need more than just charm in order to accomplish his task. One of the main reasons Central and Eastern European countries joined the EU was to secure a source of funding in order to develop their economies and infrastructure. In Hungary, former prime minister Peter Medgyessy, who saw the country into the EU, campaigned on the promise that Hungary was going to be a net recipient and not net contributor to European coffers. Ironically, no-one thought of questioning what kind of union they were joining in which the ultimate objective was to be a net recipient of money coming from Brussels; likewise, no-one ever wondered why is it that Europe's two most richest countries, Switzerland and Norway, refused to be a part of the EU.
For some countries, the need for cash is more urgent now than ever. Hungary, for instance, is not only struggling with a massive budget deficit, but is potentially on the verge of a liquidity crisis. This was made apparent when the country tried to tap into some EU money which is reserved for national emergencies only, such as forest fires, floods, etc. Brussels promptly prevented Budapest from touching the money.
At the moment, the British presidency has been using a carrot and stick routine to try and convince members of the Visegrad Four to accept a cut in EU funding as a way to secure a budget for 2007. On the one hand, the Brits have been arguing that Central and Eastern Europe is unable to use up all the funding they have earmarked anyway, since the development funds can only be unlocked through a one-to-one funding scheme (this means they get one euro in funding for every euro they add to a development project). On the other hand, Blair has warned that if a budget isn't agreed upon, they will lose up to two-thirds of this funding.
Despite this carrot and stick routine, three of the four Visegrad countries rejected the British offer. Slovakia also said it was unacceptable, but was still open for discussion. Further east, however, Lithuania made their small voice heard: under no circumstances would it accept such a deal.
If Tony Blair and the British presidency are somehow able to push through a budget, it will no doubt simply put off a crisis which has been brewing in the background for the past couple of years. This, in turn, will only add to the pressure and feeling of discontent, making it harder in the future to forge any kind of deal, be it political or economic. For now, the feeling in Budapest among the Visegrad Four over Blair's visit was exemplified by the frustration felt on the streets of the Hungarian capital. As traffic was brought to a standstill for hours by the police while eurocrats raced across the city in their padded limousines, their convoys were greeted by the blast of car horns from angry drivers.