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Delors and EU veterans float reform concessions

Jonathan Lindsell, 13 January 2015

The past few weeks have seen a number of offers to Britain and other EU states that appear uncomfortable with the current state of the union.

Greece is holding an election on 25 January, and polls suggest the far-left SYRIZA party under Alexis Tsipras will be able to form a government. SYRIZA’s centrepiece policy is rejection of the austerity being forced by the troika (Commission, European Central Bank, International Monetary Fund). Tsipras insists that Greece must be allowed a partial debt ‘haircut’ and an additional moratorium on interest payments, partly in a long-term quid pro quo for cancelling German war debt. 

While neither Brussels nor Germany are enthusiastic about the prospect of a Tsipras government, the general mood is one of seeking to moderate Greece’s demands rather than terrify voters into choosing another pro-austerity government. Indeed, Chancellor Merkel has hinted at the possibility of Greece being nudged out of the Euro – a move that could hurt Greece and the Eurozone in the short term, but ultimately be best for all concerned.

The Commission and Germany may privately see concessions to Tsipras as preferable to denying him entirely then facing an intractable Greece, which would damage the Euro’s strength on financial markets. EUR/USD is already at a nine-year low. Antagonism with a fringe member like Greece could lower it further, and encourage Podemos supporters in Spain this autumn. That would pose Brussels with the same problem: another confident, euro-hostile left-wing government.

Similar conciliatory logic is displayed by Francois Fillon, former French Prime Minister and probable presidential candidate. ‘If the English want a lighter Europe, then one needs to agree to change the European organisation and introduce a two-speed Europe [Eurozone integration and an outer ring]…that only deals with big issues: employment, energy, security and financial stability.’ Fillon argued that actual Brexit would be ‘the beginning of the end’ of the EU project, and must be avoided.

Pascal Lamy is another French politician, a former director-general of the World Trade Organisation and earlier EU Trade Commissioner. The WTO is seen as a potential ‘Brexit’ option, so when Lamy writes a piece sympathetic to exit together with Jacques Delors, he deserves attention: ‘This Union naturally needs the United Kingdom – but only as long a majority of its citizens still wish to be a part of it, because the Union is by no means a prison!’

If Lamy’s words open the Brexit door a crack, Jacques Delors’ name on the article confirms his 2012 offer:

‘The British …could be offered a different form of partnership…If the British cannot support the trend towards more integration in Europe, we can nevertheless remain friends, but on a different basis. I could imagine a form such as a European economic area or a free-trade agreement.’

This was an extraordinary concession from a former Commission President, Thatcher’s persistent sparring partner. While EU leaders and pro-EU British say that the EEA, WTO and FTA options are impossible or damaging, here their former headmen are endorsing those options as workable possibilities. From Greece to Spain to Britain, parties tugging against EU integration may get their way. 

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