Meaty menu served up at Nice will be hard to swallow

Date: 30/11/00

EU leaders are likely to be faced with making some painful concessions in the interests of enlargement if next week's IGC summit in Nice is to produce a new treaty. Simon Taylor reports

WHEN EU leaders sit down to dinner at the Nice summit in a week's time, they will be served a dish of cold Amsterdam leftovers instead of the fine Mediterranean cuisine they might expect. And, once the meal is finished, they will be left with a bitter taste in their mouths.

This Intergovernmental Conference was planned with the lofty-sounding ambition of preparing the Union for its most historic enlargement, reuniting the continent after nearly 50 years of Cold War division.

To be a success, this round of reform negotiations required all member states to sacrifice some power and influence in the interests of ensuring that the EU decision-making does not grind to a halt when the bloc expands. Instead, the debate on shaping the new Nice Treaty has been small-minded and largely introspective.

If the Union had been serious about addressing the challenges of bringing in new countries from central and eastern Europe, IGC negotiators should have tackled fundamental issues such as reducing the number of official languages when the EU expands to 25 or more members. Instead, meetings between member states' negotiators have all too often descended into stand-offs between the five large and the ten smaller countries as each fought to defend its own interests in a reformed Union.

Since it took over the EU presidency in July, France has repeatedly come under attack for its allegedly biased handling of the negotiations, accused of pursuing its own agenda at the expense of building a consensus.

The reasons for this are not hard to see. Nice was never going to be an ambitious overhaul of the Union because EU leaders had already condemned themselves to tackling the thorniest issues relating to the balance of power when they delayed decisions on the most sensitive questions at the Amsterdam summit in 1997.

The partial deal cooked up under Dutch Prime Minister Wim Kok left Nice to sort out how to streamline the European Commission to cope with more than 25 member states and how to redress the disparity between the size of the population of a country such as Germany and its share of votes in the Council of Ministers.

It also left open the question of how to extend the use of qualified majority voting to prevent paralysis when the former Communist bloc states join the Union and deals have to be made between 25 rather than 15 countries. The expectation is that these states, with their fragile economies, would oppose any new drive to industrial liberalisation or other attempts to erode their competitive advantage in attracting investment through measures such as tax harmonisation.

The French diplomats who have been handling the negotiations argue that the tensions between smaller and larger member states have been inevitable, given that the big countries committed themselves in Amsterdam to giving up a Commissioner in return for reweighting of votes and so are looking to gain greater power in other areas. "The small member states only had something to lose in this IGC. That is why their objective has been to have a minimal deal. The French presidency wants a substantial deal which allows the institutions to work better," said one.

The question of the future size of the Commission encapsulates this split between large and small member states. It is evident that the next Commission, which takes office in 2005, will have to expand from the current 20-strong team to ensure any new countries which join before then have their own Commissioner.

For the applicant states, having a 'representative' in Brussels is essential to help them feel that they are full members of the EU's political club. But fears that the Commission will become too unwieldy and lack political coherence have boosted support for plans to cut the size of the team which takes office in 2010 back to 20 and share out posts among the 20-plus countries which will be members by then.

This approach is supported by most big member states, which know that their future influence over the Commission does not depend on holding office. But Portugal, Ireland and Belgium are still unhappy about moves to cap the size of the Commission which would deprive them of their nightwatchmen in Brussels.

Opposition from the small countries when the negotiations go long into the night at Nice may produce an unsatisfactory deal by forcing leaders to delay a decision on the long-term make-up of the Commission until 2005. Given the EU's tendency to put off difficult decisions until the last minute, this cannot be ruled out. But that would make it harder to get agreement on the distribution of votes in the Council, as the two issues are closely linked in member states' minds.

While there was agreement at Amsterdam that voting rights should better reflect population size, finding the right formula poses immense political problems for Paris and Berlin. In recent discussions, there has been widespread support for a model which would see the number of votes wielded by Germany increase to 33, with tiny countries such as Luxembourg limited to just three.

Germany's 82 million citizens would entitle it to more votes than France, but such a shift in power between the twin motors of the Union would be very hard for Paris to swallow. German Chancellor Gerhard Schröder and French President Jacques Chirac have already said this issue will be one of the last to be settled at Nice. But rumours are rife that Germany is ready to accept parity with France provided it gets a favourable share-out of seats in the European Parliament.

Spanish Prime Minister José Maria Aznar will also take off his gloves in the fight over the share-out of votes as Madrid battles to ensure it does not end up with fewer votes than the other big countries. Aznar will use a clause in the Amsterdam Treaty which promised to address the fact that Spain has eight votes compared to ten for the UK, France, Germany and Italy, as he battles to get his way.

Reducing the risk of paralysis is also the main reason why Union leaders are considering extending qualified majority voting to new policy areas. Governments look set to agree to abolish national vetoes in very few fields which will make a significant difference to the quality of European life. Some measures designed to make it easier to live and work in other EU countries will come under QMV, as will changes to the rules governing the European Court of Justice and Court of Auditors which should help reduce the time it takes to get rulings from the court.

But scrapping the national veto on tax is politically impossible, not just because UK Prime Minister Tony Blair would be burned alive in the British media but also because he is not alone. Ireland and Luxembourg are refusing to give up the right to defend the tax regimes on which their buoyant economies depend. Moving to QMV for social security rules also looks unlikely because of Danish and British opposition.

The only two areas where progress has been blocked until now but where there may be a breakthrough at Nice are trade policy and regional aid rules.

France has steadfastly objected to giving up the veto on trade policy in services, intellectual property and investment. Greece, Denmark and a host of other countries want to see exceptions in areas such as maritime services. But support has grown for a Finnish proposal which would allow the Commission to negotiate more effectively in international bodies like the World Trade Organisation, and diplomats believe that an agreement on this is possible in Nice.

They are less hopeful that rules on the Union's annual €30 billion budget for structural aid could move to QMV because of Spanish and Portuguese sensitivities, although diplomats point out that allowing the new aid-hungry member states to wield the veto could cause problems.

EU leaders will have to play the most difficult game of three-dimensional chess during their marathon negotiating sessions to ensure everyone makes their share of painful concessions. But as the only choice on the menu at Nice is sacrifice in the interests of enlargement, they Wil

Major feature. EU leaders are likely to be faced with making some painful concessions in the interests of enlargement if the forthcoming IGC summit in Nice is to produce a new treaty.