Has the summit changed alliances within the Union?

Date: 23/06/05

Jean-Claude Juncker, prime minister of Luxembourg, was trembling with emotion when he said at the end of last week's summit in Brussels that hope for the EU's future was coming from the new member states. "I was ashamed," Juncker said after the budget talks broke down, notably over Britain's refusal to give ground on its budget debate, "when I heard one after the other, all the new member countries, each poorer than the other, say that in the interest of reaching an agreement they would be ready to renounce some of their financial demands. I was ashamed."

The most striking development during the summit was not that the British opposed a deal but the new member states broke ranks with the UK's stance, abandoning Tony Blair and emerging as a more generous group for whom money certainly matters, but is not all-important.

It had always been assumed that the poorer new member states would fight fiercely for money, once they make it into the EU. And it was expected that they would side with the UK, with which they share a preference for liberal economic policies and a faithful friendship with the US.

The question is, does the summit mark the end of the love affair between Britain and new Europe?

Brussels-based diplomats pour cold water on the alleged split between the new member states and the UK on the future of Europe. "The new member states are sympathetic to a number of things that Blair is defending - on economic policies, reforms, etc," Lithuania's EU ambassador, Rytis Martikonis, said. "Just, we did not like the way it was done at the summit, from the UK's side."

Blair did nothing that was "unforgivable", Martikonis said, "but now, we have to see what is their agenda, what they propose. If in 2007 we do not have a budget and we will lose lots of cohesion money because of that, we will have greater problems in forgiving him."

But the long negotiations over the budget have called into question some old splits within the EU and highlighted new ones.

For Juncker, the summit was the scene of confrontation between two visions of Europe. "There are those who, in fact without saying it, want the big market and nothing but the big market, a high-level free trade zone, and those who want a politically integrated Europe," he said.

Nicolas Schmit, the deputy foreign minister of Luxembourg, believes the summit showed there is no "old Europe [France and Germany]/new Europe" division. He says the real cleavage is now between "a Europe of solidarity that counts on solidarity to achieve progress and another one that speaks about reforms, without exactly saying what it wants, because it wants to reform by undoing".

"The new member states showed that they are more linked to the Europe of solidarity which advances integration. This is the debate that we will be facing over the next few months."

A senior EU diplomat said that the new member states did not want to be caught in the middle of a power-struggle between the leaders of France and the UK. The diplomat, from a new EU entrant, said that the French President Jacques Chirac should be under no illusion that the summit made him more popular with the new member states. "If this is something between Blair and Chirac, Chirac will never be my favourite," he said.

"Maybe Blair was cynical during the summit, but it was no less cynical of Chirac to praise the new member states who offered money to save the deal, one year after he told them to shut up [over the Iraq war]."

The ambassador of a small new member state to Brussels said the gesture to offer money to save the deal was not only tactical: "It was an attempt to push for a deal. For somebody like me, it is difficult to accept that we don't have a deal because of €2 million. We wanted to make this point and to show that if it is about money, then there are solutions. But it was about politics."

The new member states are unlikely to form a steady alliance with either the UK camp or with France or Germany. The summit showed that they do not need to follow one group and that they do not like to be played off in games between big member states. It showed that they are mature enough and that to defend their long-term interest and position they can give up something they are otherwise badly missing - money.

The love affair between the new Member States and the United Kingdom is not over - but it was given its first test by the budget row at the European Council in Brussels, 16-17 June 2005.