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Merkel's domestic difficulties threaten the Eurozone

As August draws to a close, Europe is bracing itself for a series of September sovereign debt crises. Events in Germany at the moment have the potential to make these crises into events that could break the back of the Eurozone. As Ambrose Evans-Pritchard reports, Chancellor Merkel might not have the votes to push the European Financial Stability Facility through the German parliament. Merkel is currently under attack from all angles in Germany. Helmut Kohl has criticised her foreign policy, while the German president has implied that she should not have let the European Central Bank buy up so many poor quality bonds. It is now possible to see her coalition

This autumn, Europe could become the most important issue in British politics again

Europe will be one of the political issues of the autumn. The government expects another round of sovereign debt crises in the autumn and these will add urgency to the Merkel Sarkozy plan for ever closer fiscal union between the eurozone members. Nearly every Tory MP and minister I have spoken to is instinctively sceptical of the Franco-German strategy. But Cameron, Osborne and Hague believe that because the Eurozone members won’t accept the break-up of the currency union, Britain has to back further fiscal integration in the hope that it will make the euro work. (Cynically, one might add that their position also makes life easier within the coalition given

Osborne warns Eurozone that decisive action must be taken now

The UK government is becoming increasingly concerned about the situation in the eurozone and the fact that there does not appear to be the political will to address it. One government source complained to me earlier today that “unless they get their act together the eurozone are in danger of fiddling while Rome burns.” Tonight, in a major departure from Britain’s previous softly-softly approach to the issue, George Osborne is issuing a statement calling on the eurozone countries to take “decisive action” to “prevent market uncertainty doing real damage to the world economy.” The Chancellor calls on eurozone countries to: “…now set out in detail how they plan to expand

Europe, the times they are a-changin'

Before writing my column for The Spectator this week I asked one of the most clued-up Eurosceptics on the centre right what opt-outs Britain should push for in any negotiation over an EU treaty change. His answer, to my surprise, was “forget that, we should just leave”. This answer took me aback because this person had been the embodiment of the view that the European Union could be reformed from within. But people are dropping this view at a rapid rate for reasons that Matthew Parris explained with his typical eloquence in The Times (£) yesterday. I wrote in The Spectator this week that two Cabinet ministers now favour leaving

Will Britain leave the EU in 2025?

Britain is going to stay in the EU for the next ten years at least. Of that I’m sure. But after that, when David Cameron’s retired, William Hague has taken to writing books, George Osborne’s had his chance and the 2010 intake run the party, the Tories are going to be more openly hostile to the EU. Labour will too; it has a larger reservoir of pro-EU sentiment among its ranks, but one that is shallower than it was. Focusing on the Tories, it is worth noting that nearly all of the names being bandied about as future Tory leaders have a visceral dislike of the EU. By and large

The gulf between public opinion and Westminster opinion on Europe

It’s Europe Day today, where the flag of the EU will be flown by 26 of its 27 member states. David Cameron is refusing to join in* — and rightly. Why celebrate an institution to which the British public is hostile? I’ve always found it strange that Euroscepticism is caricatured as a fringe, minority position when the polling evidence is so overwhelming. The European Commission anxiously monitors this, conducting identical polling in all member states — the largest poll in the world. The results are never publicised in Britain because they make clear the depth of public hostility. We have dug a few out, from the Eurobarometer data archives, and

Much ado about Brussels, bailouts and budgets

The news that the European Union has decreed that its Budget be increased by 4.9 percent in 2012 ties a knot in the stomach, as I ponder an Easter weekend spent in Margate rather than Majorca due to austerity. As Tim Montgomerie notes, the government is taking this opportunity to assert its euroscepticism. Stern communiqués are being worded; stark warnings are being issued. Behind the scenes, the government has joined with the Dutch, its closest ally on the Continent, to confront the avaricious Commission. Patrick Wintour reports that the French will also oppose the proposed Budget, and the Austrians, Danes, Swedes, Finns and Belgians are expected to lend their weight

Allied military intervention in Libya has commenced

Reports are coming in that French jets have fired the first shots in the UN-supported intervention in Libya. The coming conflict will determine, in the short term, whether the Gaddafi regime is toppled and, in the longer term, whether the international community rediscovers its appetite for intervention which had been so diminished by the controversies over Iraq and the difficulties of the Afghan mission. That there is intervention at all in Libya is down in no small part to David Cameron and William Hague. Hague played a key role in ensuring that Arab countries were prepared to commit to putting planes in the air in this operation, something that was

Cameron's persistent leadership on Libya was key to tonight's resolution

David Cameron deserves huge credit for tonight’s Security Council vote. He has kept plugging away for a no fly zone and has succeeded in moving the Obama administration’s position. Cameron’s decision to have Britain table with the French and the Lebanese a Security Council resolution without the support of the Americans or even having talked to the president was a bold move that has turned out to be a game changer. The Prime Minister has proved himself an effective and courageous actor on the world stage. The question now is how quickly and effectively military force can be deployed and how Gaddafi is to be ousted. It, obviously, would have

Downing Street's bureaucratic burden

Do head over to ConservativeHome, where Tim Montgomerie has put together a comprehensive guide to the revamped Downing Street operation. I won’t spoil its considerable insights here, except to highlight this: “An analysis of papers sent to Downing Street and the Cabinet Office has revealed that just 40% are directly related to the Coalition’s programme. Roughly 30% come from the Whitehall bureaucracy and another 30% from the EU.” James makes the point in his latest politics column that Tory ministers are becoming more and more Eurosceptic as they face the EU in government. That pile of European directives in the in-tray must just be getting too much.

The EU should impose sanctions on Gaddafi's Libya

The EU spends €460 million a year in operational costs alone on its new foreign policy department, the External Action Service, headed up by Catherine Ashton. This body – created by the Lisbon Treaty – was Europe’s ‘great white hope’ for the global stage, finally allowing it to speak with one voice and therefore giving it leverage where it previously had none.   It hasn’t quite worked out that way. Caught between Cairo and Tripoli, the EU has received yet another reminder that its bureaucracies and institutions cannot magically replace 27 individual foreign policies, as EU leaders continue their bickering over what to do.   The EU’s response to the

China eclipses the Japanese economic miracle

Official figures suggest that China has replaced Japan as the world’s second largest economy, after an estimated 10 percent growth rate left China with an economy worth close to $5.8trillion at the end of quarter four 2010. Japanese growth hovered around the 3 percent mark in 2010 with a total GDP value of $5.47 trillion. Analysts have told the BBC that it is ‘realistic’ that China will overhaul the US’ economy in about a decade, which, as Pete has demonstrated, does not look too outrageous a suggestion.  All of this puts me in mind of the European Union. The CIA World Factbook records that the EU leads the globe in

Irish to block EU integration

In continental lore, it is Britain that is often seen as the greatest impediment to EU integration. The government’s EU Bill initially caused horror in the rest of Europe. Would Britain have to vote for each treaty change, even those needed to enlarge the Union? Before the text of the bill became clear, every self-respecting eurocrat spat the name ‘Britain’ over their lait russe. Even now, they are not best pleased. But in future it may not be Britain, but Ireland that will block any further EU integration. For Ireland is turning a lot more eurosceptic. The role of the euro in Ireland’s decline remains a subject of debate. In

What to do about Belarus, Europe's last dictatorship?

For a while it looked like the West had the upper hand. Belarus’ Aleksandr Lukashenko, Europe’s last dictator, seemed to be moving away from Russia and closer to the West. A succession of European ministers went to see him and returned to develop packages of support and assistance with his country. In that new “Great Game” played out on Europe’s periphery it looked like Vladimir Putin’s winning streak was finally coming to en end, after partial success in Georgia and outright victory in Ukraine. Or so European leaders hoped. But any hope of changing Belarus’ position has now been dashed with the violent crackdown in Minsk against pro-democracy activists following

A preview of the rebellions to come

Today’s papers are full of the Tory right asserting itself. In the Mail On Sunday, Mark Pritchard—secretary of the 1922 committee—demands that the Prime Minister and his allies come clean about any plans to create a long-term political alliance between the Tories and the Lib Dems. In The Sunday Telegraph, there’s a report that Tory rebels will vote with Labour to try and defeat the coalition’s European Union Bill. I suspect that these stories presage one of the major themes of the year, an increasingly assertive right of the Tory parliamentary party. For too long, Cameron has neglected his own MPs both politically and personally. The result is a willingness

Europe keeps vexing the coalition

That the Conservatives and the Lib Dems disagree fundamentally on Europe is a well-known fact. But how much they disagree is rarely put on display as clearly as in today’s European Voice. Andrew Duff, Liberal Democrat MEP and president of the Union of European Federalists, argues that the coalition’s European Union bill – David Lidington’s masterpiece – amounts to “legal pedantry” and will make the UK an “untrustworthy negotiating partner, particularly in matters of treaty amendment, which is such an important driver of European integration.” ‘At home, referenda will unleash the forces of populist nationalism. Facile coalitions of nay-sayers will form to block Britain’s progress in Europe. Regular referenda on

A "two stone" solution to the Euro crisis will unbalance the coalition

Whatever the British government wants, moves are now afoot on the Continent to address some of the structural problem with the Euro. They may in the end lead to some form of fiscal federalism. So far they are not supported by Angela Merkel, the key decision-maker, who worries constantly about the court in Karlsruhe, which has set clear limits on further European integration. But they are said to be supported, at least in part, by Finance Minister Wolfgang Shauble. Writing in the Financial Times, Frank-Walter Steinmeier and Peer Steinbrück argue that the EU needs “a more radical, targeted effort to end the current uncertainty, and provide stronger support for the

Brit-free EU diplomacy takes shape

After months of behind-the-scenes work, the shape of the European External Action Service – the EU’s diplomatic corps – is now coming into view. The Bruxelles2 blog has obtained a version of its structure with some of the key names penciled in. You can find it here.      The top three jobs in the EU’s diplomatic headquarters will go to a Frenchman, a Pole and a German. The only senior UK official, besides Catherine Ashton (and her personal aides) is long-serving diplomat and geo-strategist Robert Cooper. But his name, rather mysteriously, is followed by a question mark. Of the EU “ambassadors” that have been appointed until now, there is

A more German Europe?

Timothy Garton Ash asked an important question in the Guardian recenty – is Europe becoming more German? Or, to put it more accurately, does the EU have to become more German to survive? “If the eurozone falls apart, it will be because Germany did not do enough to save it. If the eurozone is saved, it will be thanks to Germany. This is the greatest challenge to German statecraft since the country was peacefully united 20 years ago.” “Yet here is another horn of Germany’s dilemma. For half a century, German politicians have repeated, like a mantra, Thomas Mann’s call for “a European Germany, not a German Europe”. It was in

Ireland’s crisis is the fault of Fianna Fáil, not just the euro

In all likelihood, George Osborne will rise this afternoon to groans if not jeers. Britain looks set to lend Ireland £7bn as part of multilateral and bilateral bailouts. Many, particularly the Eurosceptic right, question our involvement, given our straitened financial circumstances and the apparent fact that Britain is sustaining the eurozone’s monetary and debt union, and will have to borrow to do so.     George Osborne has been adamant throughout: Ireland is too important to Britain’s recovery to risk collapse – British and Irish banks are closely linked, debts and borrowing are often co-dependent, trade is very profitable. That the bailout should strengthen the euro is a natural consequence of Ireland