Nothing is more dangerous than a statesman in a hurry. His diary is crammed with dates. Blackmailers queue at his door. Past pledges fall by the wayside. Only three things matter: legacy, legacy and legacy.
This month Tony Blair is displaying chronic legacy overload. He is president of Europe, chairman of the G8, president of the United Nations Security Council, convenor of the World Trade Organisation’s (WTO) Hong Kong summit and all-singing-dancing saviour of planet Earth. His dream is that men from Mars seeking humanity’s leader will be directed to Downing Street. There on a throne of pink candyfloss beneath a miasma of cliché will sit “our Tone” in a white robe, master of the universe. He nods his manic smile and says, “Gee guys, I’m only trying to help.”
Small wonder wires get crossed. Earlier in the year, Blair told parliament of Britain’s European budget rebate that “we will not negotiate it away, period”. This weekend he is desperately negotiating away 15% of it. He would give it all away, he said, if “but only if” France agreed to a fundamental reform of farm subsidy. He could not have been more clear. Yet France has not budged an inch. Circumstances have not changed. So what has happened?
Blair has committed diplomacy’s greatest blunder. He has fouled his timing. The French president, Jacques Chirac, has called Britain’s bluff. French leaders know that Europe is about national interests. British leaders think it is about “concessions”. They meander and fudge. They sometimes seek money, sometimes electoral gain, sometimes glory. It never works. Europe was the death of the last two prime ministers, and is now murdering a third.
Britain’s original strategy for its six-month European presidency was ambitious but sound. It was to secure a grand deal on the new European Union budget for 2007-13. This would bring Europe’s spending down from 1.06 to 1.03% of the overall domestic product. In addition a new contributions regime would fairly reflect the size and wealth of each of the 25 members.
Since 40% of the budget goes on farming, the 2002 common agricultural policy (CAP) reform (also lasting to 2013) would need tearing up. It was mad that in a decade’s time almost half the budget should be spent sustaining roughly 3% of Europe’s population. Since this would mostly affect France, Britain would surrender its 1984 rebate of £3.8 billion, a direct result of EU generosity to farming. If nothing changes the British rebate will rise to £8 billion by 2013, making Britain the smallest net EU contributor after Cyprus.
This strategy was complex, financially, diplomatically and politically. It needed a “big bang”. Everything had to link. But if it worked and cut farm support, it would unlock the WTO trade concessions to the developing world. This in turn would make the Kyoto climate targets more acceptable to that world, and put added moral pressure on the Americans to come aboard Kyoto. With the new Iraq elections also due this month, Blair’s diplomatic apotheosis would be complete. He would have the lion lying down with the lamb, and all in time for Christmas. Glory be.
Nothing ventured, nothing gained is an admirable aphorism. But by yesterday the core strategy was collapsing. Blair has long seen the EU as a cross between a Ditchley weekend and a Eurovision song contest. It is not. It is about money. Britain mooted that its rebate might be up for grabs and the European pack howled at once for the cash. Blair himself had said, over and again, that Britain would pay its “fair share” of the cost of EU enlargement. So where is it? Blair went into this critical last stage of negotiation with his precondition unfulfilled. France has not given an inch on CAP reform.
It is puzzling that Blair can have expected otherwise. He himself agreed the 2002 CAP deal, now done and dusted. He did so in return for France accepting enlargement. Protecting farm support from any budgetary dilution was France’s quid pro quo. Blair knew this. He cannot protest French unreasonableness, since he failed to veto that unreason when it suited him in 2002. The French are being consistent. It is Blair’s chickens that are coming home to roost.
The hope was then to enlist the support of the eastern states along with Scandinavia and Holland in a moral crusade against the French position. This might have had purchase had Blair begun in July, when Europe was reeling from the collapse of the new constitution. Now, with Chirac under domestic pressure and Germany in political turmoil, the tactic is hopelessly naive. Besides, Blair has shown his hand by hinting at “rebating the rebate”. It is like a spot of blood in a tank of piranhas.
Without fundamental reform of the CAP the strategy unravelled. Blair’s proposed cut in the 2007-13 budget, which is badly needed, means a 10% cut in non-farm structural funds. This was the magnet that drew east Europe into the EU orbit. To millions of otherwise sceptical easterners, development subsidies meant access to the wallets of western taxpayers, relieving the pain of post-communist reconstruction. Europe was to be a Polynesian cargo cult.
Somehow Blair must now rescue a lesser reform from these ruins. But this involves him telling the new states that it will hurt them more than it will hurt him, or France. In the interests of Brussels solvency there can be no trams in Warsaw, no sewers in Budapest and no gravy trains running east of the Danube. Even access to the golden stream of farm funds for the new states is being “phased in”. Blair, the friend of enlargement for so many years, finds himself looking increasingly like its saboteur.
The British prime minister is a good performer but a dreadful negotiator. As Sir Christopher Meyer points out in his book on Washington, Blair let George Bush run rings round him on Iraq.
In Northern Ireland he has been putty in Gerry Adams’s hands. Then last March he meekly conceded to France the notorious “services directive”, protecting French workers from eastern competition. This was a futile attempt to help Chirac win his referendum on the European constitution. Chirac’s payback was a slap in the face. With his farm support in the bag he coolly demanded an end to the British rebate. In the old days this would have meant war.
Some form of modest budget may be delivered next week, to avoid Blair’s presidency going down in humiliating flames. That is not sufficient reason. If east Europe’s compliance to a new budget is bought at the price of 15% of the British rebate, as now suggested, Blair will have paid dearly for a dud deal.
The strategy was explicitly to use the British rebate to lever a vital reform of Europe’s “agri-protectionism”. The strategy will have failed, and with it will go the opportunity for further budgetary reform prior to 2013. In consequence, there will be no hope of a breakthrough in Hong Kong, only bitter and wholly valid Third World recrimination. This is a dreadful outcome.
Blair cheerily told the BBC on Friday that he could not govern “according to the headlines”. The truth is he knows no other way. He has done rotten deals on Europe since coming to power. He has now wasted six months grandstanding and legacy hunting, desperate to be the leader who set the world to rights. The one foreign policy cause to which he should have devoted himself was EU budget reform. He has blown it.
The best outcome now would be no settlement. Blair should play French and tell Europe what he told the Commons. There will be no move on Britain’s indefensible rebate without a move on France’s indefensible farm support, “period”. The two indefensibles are bonded together politically and historically. Europe, under Austrian and Finnish presidency, has next year in which to sort out the mess. There is no real hurry, were it not for Blair’s legacy quest.
Britain has a powerful lever. If the rest of Europe cannot face fundamental reform, the rebate will stack up inexorably, and legally, to £8 billion in 2013. This is so indefensible as to be a lever beyond price. The rest of Europe has the option, reform it or leave it. Blair may want Britain to be Europe’s solution. He is wrong. He must become the problem. Two can play at realpolitik.
