Spring European Summit


by Brussels Gonzo (originally published on A Fistful of Euros

I often marvel at the absurdities of the debate around the EU’s economic agenda.

Take, for instance, this pithy summary of Sunday’s meeting from EurActiv:

The costs of German reunification will be counted as a mitigating circumstance in the reform of the EU Stability and Growth Pact, EU finance ministers have agreed.
Because, of course, nobody knew about German reunification when the Stability and Growth Pact was first adopted. In 1997.

And the ludicrous row over the services directive leaves me wondering if the EU is at all serious about extending the four freedoms to the new member states, let alone about the dying Lisbon Agenda.

Perhaps the heads of state and government will surprise me. But I suspect the biggest effect of the summit for me personally will be the increased traffic jams when I go home tonight and tomorrow.


I think it is a tactical mistake by advocates of anything vaguely along the lines of the current Bolkestein-proposal to try to create a link between this debate and EU enlargement. If properly done, the service sector should be invigorated in an even manner across the whole EU, rather than just by exploiting some temporary wealth differentials between East and West. Yet every time somebody mentions that mysterious Lithuanian company venturing to the UK or France, advocates of the directive will get the infamous “social-dumping”-soup poured over their heads.

Posted by: Georg at March 22, 2005 11:14 AM

I admit that I haven’t been following the debate all that closely, but my impression is that the “social dumping” bogeyman is raised by the directive’s opponents, not by its supporters.

My point is that if we were ever serious about enlargement or the single market, the services directive is an inevitable consequence. What gets me annoyed is that so much of the opposition appears to be based in xenophobia and protectionism.

Posted by: Brussels Gonzo at March 22, 2005 11:47 AM

I believe you’re right that the opponents started this game, but for example commission president Barroso mentioned in his defence of the directive last week that he would protect the new member states from forces wanting to preserve the old order. Barroso then got a phone call from Jacques Chirac in reply..

Posted by: Georg at March 22, 2005 12:33 PM

I think Georg has a point there. Calculations in the Netherlands, for instance, show that the Services Directive would actually *create* jobs there, instead of threatening them. This is probably true for other EU-15 countries as well.

Another thing that disturbs me about the debate is that I hardly see any media refute the unions’ claim that the Directive allows companies to work under the conditions of the countries where social protection is lowest: If you take article 24 of the proposal, it says that for workers posted in another Member State the employment and working conditions of that Member State apply, in accordance with a Directive that has been in place since 1997.

Posted by: eulogist at March 22, 2005 02:37 PM

Brussels Gonzo, eh?

I’ll take it as a compliment!

Posted by: Belfast Gonzo at March 23, 2005 01:06 AM

Frankly, I’m not surprised that the debate has sunken to this level of stupidity, given how the SGP has failed to keep national deficits under the agreed percentage ceiling. The debates that flourished under France and then Germany breaking the pact were enough to make any causal reader of newspapers cringe.

Posted by: lazylinejane at March 23, 2005 03:42 AM

On France Inter, an interview with Laurent Fabius, 24 Mar… sets out the arguments on the French left for a ’no’ (to the constitution).

The new countries from Eastern Europe are said to be not like Spain and Portugal: they seek a niche (créneau) exactly through their lack of social protection. According to Bernard Guetta’s earlier commentary, they are seen as strengthening the camp of Great Britain, the ’liberal’ and atlanticist camp. (Spain’s position could of course be seen as temporary: would it have been accorded the honour of inclusion in the inner core if Aznar or the PP were still in power?)


Posted by: DavidP at March 24, 2005 03:24 PM

While the PP, and Aznar even more, aligned mostly with the UK-US “liberal”, their internal policies where rather unliberal, if not typical of crony capitalism. And their hold on Spanish society was not as strong as they thought, which was illustrated by they eviction from power one year ago. Spanish society is nearer to France’s than to Italy’s.


Posted by: Antoni Jaume at March 24, 2005 07:31 PM

One thought on “Spring European Summit

  1. This turns out to be of more than passing interest, as at work we have potentially similar issues regarding VAT. The EU legislation (so I have been told) is similar in scope, in that theoretically, anyone selling online to an EU destination is supposed to collect and account for VAT to that jurisdiction. (I doubt it’s ‘unconstitutional’, but of course it is completely unworkable for companies that have no presence within the EU). Some of the websites we host are for UK-based companies, so this is not an issue, but our hosting for organisations based outside of the EU is a more uncertain case.

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