What conclusions should we draw from Germany's abstention on no-fly zone?

Last night's UN resolution authorising the creation and enforcement of a no-fly zone over Libya, and Germany's abstention in the Security Council's vote in particular, is stirring quite a debate.

Iain Dale has been quick to denounce the German abstention as "shameful" and an act of "cowardice".

The Spectator's Alex Massie has countered that:

Having doubts is not shameful and I don't see why we are supposed to think that Germany should have supported the resolution simply because Britain, France and other countries were doing so.

Perhaps I'm missing something, but if sovereignty means anything it must permit sovereign, friendly nations to disagree on matters of major international importance. (And if the Germans are bad europeans for preventing a common EU approach doesn't that just mean they're fulfilling the traditional British role? Which in turn means they must, from the eurosceptic position, be the Good Guys in this instance.)

Germany's aloofness when it comes to matters of foreign policy and military action can be extremely frustrating. Take its unwillingness to get fully involved in Afghanistan, despite providing the third largest contingent of NATO troops, as an example. The legacy of the Second World War still looms large in the German psyche and that is somewhat understandable.

But, whatever one's views about the merits of Germany's perceived pacifism, Massie makes surely the most important point: that countries should be free to make up their own minds and, if they disagree with each other, so be it.

The real problems arise when you try to force these different views through the funnel/sausage machine that is the EU in the hope of a single common position.

At last week's summit, we should remember, it was Germany that blocked EU endorsement of a no-fly zone. This, in the words of the Independent, left France and the UK "isolated" in their call for intervention. This was, of course, nonsense because, as we have seen, it was never going to be the EU that decided on the use of force. The Franco-British defence pact, agreed last year outside the auspices of the EU, was an admission - however small - on the part of France that to get things done militarily, the EU is just too slow, indecisive and unwieldy.

And it was the Frankfurter Allgemeine Zeitung that today noted "the tensions in foreign policy between France and Germany are remarkable," adding that the lack of Franco-German consensus was "paralysing the EU".

The Franco-German relationship will always be the most important in the EU (they share a border, a turbulent history and the same currency), but on more and more issues, be it defence or the future of the euro, as France and Germany get up close and personal, the more they start to grate with each other. The FAZ article started by noting that newly appointed French Foreign Minister Alain Juppe's first visit to Berlin was cancelled, albeit with the "plausible excuse" that he had to fly to the UN in New York.

Alright, it's only in one area, and hopefully it won't come to the use of force, but if France begins to see the benefits of a flexible approach to European cooperation, sometimes outside the EU, this could prove to be important in breaking down the EU's monolithic approach to many other issues.

A blueprint for doing nothing?

‘Enhanced economic co-ordination in the euro area’ is the long winded title for the new watered down version of the Franco-German ‘pact for competitiveness’ - the blueprint for saving the eurozone (well...).

Following the massive hostility towards the initial proposals the pact was pawned off onto Herman Van Rompuy, the European Council president, in an attempt to find a compromise. The result is a four page document that outlines some nice ideas but, scratch the surface, and it has very little substance.

The pact focuses on: fostering competitiveness, fostering employment and enhancing the sustainability of public finances. It feels as if we've heard this before, i.e. the Lisbon Agenda (or the new Europe 2020 strategy, same difference) with a pinch of the original Stability & Growth Pact.

All admirable aims and definitely issues which need to be tackled, especially if the eurozone is to avoid a similar crisis in the near future.

In most areas the actual policy specifics (specifics being pretty much every aspect of the policy other than the general overarching aim) will be left to member states, bringing into question the actual need for this document at all. Between the new macroeconomic monitoring and the increasing acceptance in member states for the need to enhance competitiveness on the national scale, what value is this pact supposed to add in real life? The lukewarm reception it received seems to support this, and casts further doubts over the chances of an agreement which contains something new and convincing being produced at the March summits.

An interesting question is how the German Bundestag and Bundesrat will respond to a proposal which quite clearly give national government quite a bit of discretion in defining their own caps on debt levels and wage setting arrangements.

At best the new pact looks to be a set of guidelines for member states to follow and to show a unified approach. That is fair enough, but it should not be treated as more.

Saying 'Nein' To Angie - Part II

We've already looked at the reaction from some of the European press to the Franco-German "pact for competitiveness". But what about European leaders? Well, as has been widely reported, Paris and Berlin may find it a bit more difficult than usual to get their way.

Possibly the toughest reaction came from non-euro member Poland, whose PM Donald Tusk "personally attacked" German Chancellor Angela Merkel and expressed “fundamental doubts” about her plans, according to Spiegel. Going all out, he added:

Why do you have to demonstrate a division? Are the rest of us standing in your way?

Belgian Prime Minister Yves Leterme said on his arrival at Friday's summit that he was "absolutely not in agreement" with the idea of scrapping the link between pay rises and inflation, and warned,

We will not allow our social model to be undone.

Luxembourg's Prime Minister Jean-Claude Juncker concurred,

I can't really find a reason why abolishing the indexation of wages should improve the competitiveness of my country or the euro area.

Austrian Chancellor Werner Faymann, a known supporter of German-style fiscal discipline, bluntly stated,

I don't even think it's possible that the EU sets the retirement age.

Predictably, Greece also voiced its disapproval, not quite appreciating the idea of a constitutional limit to government borrowing - the already infamous "debt brake". In an interview with Ta Nea, Greek Deputy Prime Minister Theodoros Pangalos said,

I categorically reject the thought of an EU decision to intervene in national constitutions. The idea that this would be a precondition for being a part of the German rescue plan is not attractive to me.

European Council President Herman Van Rompuy will now try to find a compromise, suitable to all eurozone leaders. An extra eurozone summit is planned, possibly for March 11, then the aim is to have a deal ready at the EU summit by the end of March.

Bonne Chance.

Merkel refuses to fold

German Chancellor Angela Merkel is a tough cookie.

Sandwiched between Deauville and tomorrow's EU Summit, Dr. Merkel took to the podium today to defend the controversial pact with President Sarkozy on economic governance in the eurozone that has left both German politicans and EU leaders incensed (but in different ways).

Addressing the Bundestag this afternoon, a firm Merkel said both President Sarkozy and herself will relentlessly insist on a "culture of stability" at tomorrow's European Council summit. She stressed the necessity of taking "precautions today for dealing with future crises" in the eurozone.

Such precautions, she said, will simply have to include a Treaty change. Merkel stated that the measures taken earlier in the year to bail out Greece were "unavoidable" but did not provide long-term solutions. She insisted on a new, robust and legally unassailable "crisis management framework" anchored firmly in a new EU treaty; a move that she admitted is "ambitious". But she confidently asserted that, for the EU

success will only come with a change to the treaty...improvement is always possible, even if the road is rocky.

Presumably responding to Luxembourgish Foreign Minister Asselborn's and others' sneer that Europe does not work with only a "two-stroke engine", the German chancellor said, "the Franco-German union is not everything in the EU, but, without a German and French union, it is not much."

Tomorrow's summit could be really interesting...

Reding vs. Lellouche: Round Two

Following the infamous quarrel over the Roma deportations, EU Justice Commissioner Viviane Reding isn't exactly the French government's préférée.

But, it seems, there is one person in Paris who really can't stand the Commissioner: French Europe Minister Pierre Lellouche. The two are now at it again. This time the disagreement concerns the Franco-German proposal to change the Lisbon Treaty to allow struggling eurozone countries to default.

In an interview with Die Welt, published today but with extracts circulating already yesterday, Ms. Reading said,

It seems to me completely irresponsible to put on the table these chimeras on new Treaties.

Dismissing as 'completely irresponsible' a proposal coming from the two most powerful eurozone governments is pretty strong stuff for a Commissioner. But in case someone still didn't get the message, Viviane added,

Decisions [in the EU] are not taken in Deauville [the small village in Lower Normandy where Merkel and Sarkozy agreed on treaty change last week], but at 27 and by unanimity. France and Germany are the two countries who scuttled the first version of the Stability and Growth Pact in 2004 and 2005. The euro has undergone a severe crisis since, but it seems like someone has not yet drawn the lesson [...] We must stop destroying what the EU institutions propose.

Lellouche - himself not known for shying away from hard talk - was quick to respond. Speaking in the French Senate yesterday, he said,

When you are a European Commissioner, and moreover a Vice-President of the Commission, is it conceivable that you call the President of the French Republic and the Chancellor of the Federal Republic of Germany 'irresponsible'?

Fair enough, but Lellouche wanted to take one last jibe,

Frankly, the words used by this Commissioner [he avoids calling Ms. Reding by name, like Sarkozy did during his row with Barroso last month] to denigrate the Franco-German proposals are unacceptable. They are cut from the same cloth as the insulting tone - which I will not forget - used against France during the polemic she herself used on the Roma question.

We're awaiting round three.

Sacrificed at the altar of the Franco-German axis?

As we've noted before, Germany's attitude to the EU and the famous Franco-German alliance is changing (plug: we will be organising a debate in Berlin next Tuesday on that very topic). Take German liberal MEP Silvana Koch-Mehrin (photo) for example. She is a vice-President of the European Parliament and has been called the 'European face' of the German liberals - the junior partners in Angela Merkel's coalition government.

However, yesterday she reacted fiercely to the agreement that Angela Merkel and Sarkozy reached in Deauville. The deal had the effect of watering down German demands for a stronger Stability Pact to install some fiscal discipline in the eurozone, in return for French backing for a Treaty change. Ms. Koch-Mehrin accused Merkel of having "broken her promise" on tougher rules for eurozone countries which run excessive deficits. Even more interestingly, she said: “I fear that more German taxes are now being sacrificed at the altar of the Franco-German friendship.”

Strong words from someone who certainly can't be described as a eurosceptic.

Keeping the dream alive

One of the more interesting aspects of EU politics at the moment is the crumbling Franco-German axis. The frictions between Nicolas Sarkozy and Angela Merkel – which are well documented by now - defined today’s EU summit in many ways .

As we outline in a new report published yesterday, Sarkozy wants an ‘economic government’ for the 16 eurozone members (meaning more influence over the ECB and possibilities to put pressure on Germany to stimulate domestic demand), while Merkel is pushing for tougher budgetary rules, backed by sanctions, but want them done primarily at the level of all 27 member states - fearing the politicisation of monetary policy if France gets its way.

Both the French and the German press seem to agree that Merkel now has the upper hand – and the conclusions from today’s Summit bears the Chancellor’s fingerprints.

Sarkozy and Merkel seemed to reach an uneasy – and just about face-saving – compromise earlier in the week, saying that “The natural frame for economic governance is at 27.” They also agreed on the possible need for Treaty change to introduce tougher sanctions to underpin the stability pact.

But tensions still persist. Sarkozy appears to be clinging on to his idea of an economic government for the eurozone. At a press conference following today’s summit, he said of his drive towards an economic government:

We are only at the beginning of the concept. Only four months ago, the words ‘economic governance’ were taboo. But the idea is progressing…The idea of economic government is not only about dealing with budgetary issues. It will allow us to put into place a strategy for competitiveness in several domains, such as research, social rights and universities.

He went on,

There will be sanctions for those who do not fulfill their commitments on debt. Fines are not the best solution. Together with Angela Merkel, we support the withdrawal of voting rights…Several countries want the sanctions to be the same for all member States […] Sanctions and obligations must be tougher for Eurozone countries.

Not the strongest stuff ever to come out of Sarkozy, but it still shows that he’s probably not going to give up on his dream of a euro economic government just yet – and that a new grand bargain between the Germans and the French won’t be achieved so easily this time.