Is Anglo-Saxon the EU’s new language?

Date: 30/06/05

HOW much appetite there will be for the UK presidency's planned push for economic reform is still unclear. The fact that the EU is facing a crisis of confidence could mean that the time is ripe for Prime Minister Tony Blair to grab leadership and run with it.

But he is also seen as the man who killed the 16-17 June EU summit by rejecting a deal on the Union's budget for 2007-13. His stubborn insistence that the UK budget rebate could only be touched if serious reforms of the Common Agricultural Policy were envisaged in parallel wrecked the summit, as well as any last vestiges of a relationship with French President Jacques Chirac. This could spark hostility in the ranks.

Blair came out fighting last week with his speech before the European Parliament (23 June) calling for an overhaul on social policy.

"What kind of social model is it that has 20 million unemployed in Europe?" he asked. It was, Blair insisted, far better to focus on growth and jobs, and a more "flexible" macroeconomic framework.

But many were sceptical of his economic views. "The British social model cannot be applied to all of Europe," blasted Daniel Cohn-Bendit, co-president of the Greens.

"The majority of people do not ask about how they can enhance their ability to compete," said fellow UK Green MEP Jean Lambert. "They want to know why the gender pay gap in the UK is one of the biggest in Europe and why the percentage of those at risk of poverty in the UK is higher than the EU average."

But Brussels-based think-tank the Lisbon Council welcomed Blair's thoughts and called on the rest of the EU to "stop trying to paint Mr Blair into a political corner and start working with him to define a more compelling 21st century agenda for the European Union".

Others suggested that the proof of the pudding would be in the eating. "Conservatives will judge him on results, not rhetoric," said British MEP Timothy Kirkhope.

Certainly no one is expecting the British to provide the neutral chairmanship that their Luxembourg predecessors aimed at. Blair himself said that the UK would give its own views "strongly". That is likely to spark hostility in the ranks of many 'old Europe' countries, in particular in France, Germany, Belgium and Luxembourg, where it is feared that Blair wants to export the dreaded 'Anglo-Saxon' liberal model to the rest of Europe.

The British prime minister insisted that he was faithful to Europe's cherished 'social model' but he wanted to modernise it. "Investment in knowledge, in skills, in active labour market policies, in science parks and innovation, in higher education, in urban regeneration, in help for small businesses. This is modern social policy, not regulation and job creation that may save some jobs for a time at the expense of many jobs in the future," he said.

One thing is clear though. Blair has global clout. The doubts over the stability of the EU economy, implicit in his Parliamentary speech, saw the euro dip to a ten-month low of $1.198 overnight.

And the UK has already shown its hand in several of the issues that will be at ministerial level during its presidency.

On the employment side, Blair inherits the thorny discussions over the UK's opt-out from the maximum 48-hour working week, an issue that pits those in favour of a flexible labour market against those who do not. MEPs have already voted down the opt-out, but EU employment ministers earlier this month (2 June) failed to agree even on a compromise proposal which partly revived it.

Many now expect the issue to fall off the agenda, but the UK might want to get it through under their watchful eye to have as much influence as possible on the outcome.

It will also be interesting to see how Blair manages the debate on the EU services directive - if he gets his hands on it. The text looks set to be watered down in Parliament where a vote is not scheduled before October. Following this, the European Commission plans to review the entire proposal, after severe criticism from some member states and in light of Parliament's amendments.

The UK backs the Commission's proposal, while others, in particular France, Germany, Belgium and Luxembourg, are worried that it will lead to a deterioration in social standards.

Blair will also put serious emphasis on breaking down the administrative burden of EU legislation on businesses, concentrating on improving the consultation and impact assessment processes surrounding EU lawmaking.

He has committed himself to taking forward discussions on the next EU budget round, but whether he can continue to champion investment in research and innovation while stalling talks on the rebate issue is something else.

And though Blair has indirectly criticised eurozone countries for failing to implement structural reform, how the rest of Europe will react when the UK economy looks to be slowing down, will also be an issue to watch.

Article takes a look at the prospects of the United Kingdom to successfully pursue an agenda of economic and social reform in the European Union, during its Presidency of the EU Council, July-December 2005.