France and Germany

ESSENCE OF ESSEN

(The Economist, December 3rd 1994)

"An enlarged Europe comprising a greater number of states could not be federal. That would mean extending considerably the domain of those decisions taken by majority voting. Therefore, the five big states representing four-fifths of the population and wealth could be put in a minority - which they will not allow."

Britain's John Major could hardly have put it better. But the words are those of Edouard Balladur, France's prime minister and perhaps next president. They appeared in a long article in Le Monde on November 30th, just as Mr Balladur was in Bonn meeting Chancellor Helmut Kohl. Mr Kohl does not share his view. What is music to Mr Major must have sounded like deliberately timed cacophony to him.

Mr Balladur's arguments suggest a widening reluctance to embrace the Germanic design for the European Union that has been a running theme of the current German presidency of the EU. This design proposes that: the EU should quickly embrace Central and Eastern Europe; give real powers to its parliament in Strasbourg; and turn the European Commission into a federal government. As Germany's defence minister, Volker Rühe, said this week, "The nation state is dead."

Not to Mr Balladur, let alone his more Euro-doubful Gaullist rival for the presidency, Jacques Chirac. In the French prime minister's view, "France is the oldest nation in Europe ... and has given the rest of the world the concept of the nation and of liberty whose combination underlies our no tion of democracy." Stirring the chauvinist pot a little more, Mr Balladur declares that France will not allow itself to be marginalised by the EU'S eastward expansion. Instead, though it will deepen its alliance with Germany, it will also co-operate more with Britain, especially on defence, and will forge closer links with fellow-southerners, Spain and Italy.

All of which may give Mr Kohl cause for thought, even pause, ahead of the 1996 intergovernmental conference that will decide the EU'S future shape and direction. After all, France and Germany form what the strategists in Mr Kohl's Christian Democratic Union call the "core" of the EU'S "hard core". If France does not share the German vision (benevolently designed, say the increasingly powerful Germans, to ensure a European Germany rather than a German Europe), then how can it work?

Good question, but Mr Kohl has more immediate matters to worry about. On December 9th and loth he convenes an EU summit in the unlovely Ruhr town of Essen. in theory, it should be celebrating the end of Germany's six-month stint as holder of the Union's presidency. In practice, it has little to celebrate.

One reason is Norway's referendum decision this week to spurn (for the second time in 22 years) membership of the Union, even though neighbouring Sweden and Finland have voted to accompany Austria into the EU on January 1st. Norway's No came as no surprise, yet it cannot be dismissed: the EU likes to boast that it is a club everyone wants to join.

A second reason is that German ambitions for its presidency (and for the Essen summit) have largely been thwarted,whether through inter-governmental squabbling or through poor tactics. This week, for example, the Union's foreign ministers approved a so-called "strategy" for bringing Poland, Hungary, the Czech Republic, Slovakia, Romania and Bulgaria into the Union. This blueprint, which will be discussed at the summit, explains how the applicants need to prepare for membership. The trouble is that it does not properly explain how the existing members will pay for enlargement.

The plan suggests using the existing aid programme for Central and Eastern Europe. This amounts to 1.1 billion ecus ($1.3 billion) for next year. But the European Commission wants 7 billion ecus to be committed to eastward enlargement over five years. Where is all the money to come from? The answer is not clear because the Eu's southern members will not approve the 7 billion ecus until their northern counterparts approve a 5.5 billion ecu programme for North Africa and the Middle East.

So too with other German plans for deepening co-operation among EU members: an energy tax (blocked by Britain); a uniform withholding tax on bank deposits (blocked by Britain and Luxembourg); turning Europol, an EU police venture, into an EU version of the FBI (opposed by France).

Even on "trans-European networks" (grand schemes to improve Europe's transport and energy infrastructure) there are problems. This week a group set up to help implement the networks confessed that of 14 priority projects, valued at 91 billion ecu, only three had financing in place, with another two near to it.

Though all this may make for an empty summit, Mr Kohl need not feel entirely disheartened. For one thing, there is plenty of common ground between Germany and France (and even Britain) on letting members of an expanding Union move at different speeds. There is agreement, too, on the need to reform the common agricultural policy and the regional aid funds.

Most of all, there is the possibility that neither Mr Balladur nor Mr Chirac will be French president in the spring. Instead, it could be Mr Kohl's old friend, the current president of the European Commission, Jacques Delors. The most recent polls have shown him emerging, for the first time, as front-runner in the race for the presidency. And what did Mr Delors say to Der Spiegel this week? Warmly endorsing German ideas while still appealing to French nationalists, he called for "a real federation of nation states to reinforce the influence of the old European nations."