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President Sarkozy’s sleight of hand in removing one of the European Union’s key objectives almost slipped through the final meeting of the 27 nations’ top diplomats preparing for the Brussels summit.
The so-called sherpas took five hours on Tuesday night to go through the draft German proposals line by line. It was a Hungarian diplomat who saw that something was missing.
The failed EU constitution proposed that the EU shall have “an internal market where competition is free and undistorted”. The phrase was included to make free competition one of the objectives of the EU, upgrading its status from the Treaty of Rome, where it features as a sub-clause.
Minutes from Tuesday’s meeting seen by The Times show that, near the mid-point of the discussions, the Hungarians drew attention to the redrafted statement. It included commitment to the internal market but omitted the phrase “where competition is free and undistorted”.
The Hungarian questioned whether this would affect EU competition policy – a huge area of European Commission activity combating cartels and illegal state aid that could distort fair trade.
Immediately the Spanish representative observed that it seemed to change one of the principles of the EU and called for it to be looked at further.
The discussion moved on, with no comment from Kim Darroch, the British representative, but British officials insist that they began work on analysing the significance of the change the next day.
José Manuel Barroso, President of the European Commission, set his lawyers to work on Thursday and was sufficiently concerned to raise the change as one of his key discussion points at the round-table dinner on Thursday evening. But it was only after news of the move broke late on Thursday that Mr Sarkozy admitted that he had persuaded the Germans to edit the treaty language.
Once the cat was out of the bag, opposition increased within the European Commission, especially at the department of Neelie Kroes, the Competition Commissioner.
Mr Barroso explained to Mr Sarkozy yesterday that the status quo – the position of the Treaty of Rome – would have to be bolstered with a protocol to the new treaty. The pair sat together over lunch until late into the afternoon. Mr Sarkozy, who had discussed the matter with Tony Blair earlier, agreed to the compromise, although not before the French media had acclaimed a successful feat of summitry at his first European Council.
The episode is revealing about the summit debutant Mr Sarkozy and his economic doctrine, “Sarkonomics”. Compared with previous French presidents, he is a business-friendly reformer. But he has never hidden his traditional French belief that trade is too serious to be left to mere markets – or the European Union.
Mr Sarkozy won the election in May with promises to shield France from what the country sees as the hostile force of globalised trade. Like Britain, he also needs the treaty to be sufficiently different from the failed constitution to avoid holding a referendum.
For more than a decade, supposedly unfair competition from low-cost nations inside and beyond Europe has been blamed as the underlying cause of France’s domestic ills.
The first line of defence must be the European Union, but Mr Sarkozy insists that it is failing. He earned credit in the campaign with his argument that the union is acting like an innocent among predators when it aspires to scrap all internal and external barriers to trade. He has ensured the ire of Brussels – and Britain – with his demand that the EU must impose tariffs on “unfair” imports.
Mr Sarkozy’s chief villains are the United States and the emerging world giants led by China. He has waged a campaign against the EU Commission and Peter Mandelson, its British trade chief, for feebleness in the face of US pressure on farm subsidies and protection of its entertainment industry. He accuses China of forcing down its currency to flood Europe with its goods while the European Central Bank turns a blind eye to the “overvalued” euro. Never one to beat about the bush, Mr Sarkozy has repeatedly called for Mr Mandelson to be stripped of the job of negotiating trade for Europe.
Mr Sarkozy hardened his interventionist views with the French “non” in the referendum on the European constitution in 2005. Voters in France and the Netherlands rebelled because Europe was failing to protect them from the harsh winds of globalisation, he and the rest of the political world concurred.
On the night of his May 6 election victory, Mr Sarkozy sent a message to European leaders: “Do not remain deaf to the anger of the people who view the European Union not as a protection, but as the Trojan Horse for all the threats that are contained in the transformations of the world,” he said.
Sarkonomics mixes state intervention with a supply-side desire to lighten regulation. For example, he supports government promotion of “national champions” in industry while also pushing for further privatisation of state companies such as Areva, the nuclear energy giant. “In some economic sectors, the market isn’t the be-all and end-all,” Sarkozy said in a TV interview in March. “The market sees short term.”
Already agreed
— Permanent President A powerful new post to chair European Council meetings, held for two-and-a-half years and renewable for an extra term. Tony Blair has denied he wants to be first.
Status agreed
— Smaller European Commission Ends the practice of every member state having commissioner. Instead two thirds (18) will hold top jobs in Europe. Designed to streamline EU.
Status agreed.
— Amending previous treaties Idea of a constitution dropped, along with references to EU flag and anthem, to stop the treaty looking like the basis of a European superstate. Instead, the reform treaty will update previous European agreements, not replace them.
Status agreed
— Single legal personality The constitution carried a formal statement that would give the EU treaty-signing powers but it was objected to by several countries including Britain as giving the appearance of too much power.
Status dropped
— EU Foreign Minister A single figure to represent the EU internationally, combining the role of the current High Representative and the Foreign Affairs Commissioner. Britain wanted limits on powers to ensure that job would not conflict with national foreign ministers – and never threaten Britain’s seat on UN Security Council.
Status agreed after Britain retreated
— Common Foreign and Security Policy The EU constitution proposed shifting the decision-making basis for common foreign and security policy, which would threaten the British veto. Britain and others wanted guarantees in the new treaty that policy would still be decided intergovernmentally, preserving the veto.
Status British position agreed
— Tax and benefits One of Britain’s “red lines” was to retain a veto over anything that would influence the tax or benefits system.
Status easy to meet because there were no serious proposals for harmonising welfare systems
— European Parliament A limit of 96 on the number of MEPs for large countries, meaning that Germany will lose three MEPs, and on the minimum number of MEPs for small countries of six.
Status agreed

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'Certain' EU nations rejected the constitution in a referendum......have we forgotten already....?
luthor lionel, NY,
It's weird or funny that Sarkozy has Hungarian roots, and a diplomat of my country (Hungary) founded the missing thing. :D
Balazs, Szeged, Hungary, EU
The burial of a UNITED EUROPE is distressing...Not even references to a flag or anthem will be allowed henceforth.
Jeopardized are the Founding Fathers' dreams of a United Continent in which a THIRD World War would be technically impossible.
So .... back to the ruthless rat-race for power and money. The end will be both a bang and a whimper.
Mth, Luxembourg,
Truth to tell, a United States of Europe makes a whole lot of sense, rather clearly this would entail a loss of power for individuals, but not for the individual nations, problem is this will take perhaps one or even two more generations, but it probably will eventually happen...
wpo, warsaw, n.y.
I hope Europeans have the wherewithall to keep Sarkozy on a tight leash. He's turned trade logic on its head. Make Poverty History was about giving the world's poor the means to work their way out of poverty. Now it's all backwards. The EU is the poor, beleaguered victim of the hungry, predatory masses.
Strangely, Mandelson is actually a lot like Sarkozy. He also wears his saintly victimhood rather comfortably.
Let's get these things into proportion. Take shoes as an example. The EU slapped duties on Chinese shoes after it investigated just 13 shoe factories and found that just one of these (ie fewer than 8%) had received a subsidised loan and that some of the 13 were receiving the exact same tax concessions enjoyed by every foreign company in China. How convincing is that as a claim for victim status?
Compare that with the billions upon billions the EU uses to subsidise its agricultural exports.
Tim Wilson, Shanghai, China
Sarkozy is no different from Blair. He would like to deliver France to big business as soon as he possibly can. The clause on competition was changed to hoodwink the socialists in France. Sarkozy knew that the change in the competition clause would be discovered and changed back to it's original terminology by others, that way he can claim that he tried to protect French interests but was over ruled by other nations.
The idea of EU is to deliver all the European nations to big business and financial interests just as America is run by big business and financial interests.
We are being turned into nations of surfs!
Vincente, Barcelona, Spain
Did anyone seriously expect Teflon Tony to stand firm?
A couple of headline grabbing "Red Lines" and cave in on everything else is simply a continuation of his 10 years of treeachery!
Mike Bibby, St Albans, England -not EU
I do not trust Sarkosy, he needs watching, why has he been offering blair jobs?
mike, Paphos, Cyprus
It seems that Blair and his team were too focussed on red lines and, as a result, overlooked Sarkozy's canny alteration to one of the corner stones of EU policy. This lack of good judgement is so characteristic of the Blair years that I really can't understand why he should deserve high office elsewhere!
John Hambly, Tbilisi, Georgia
From the events as reported above, are we to understand the following:
1. France tried to dilute the rules and slip this through without anyone noticing;
2. Germany connived at this and neither of them told anyone of the changes;
3. it was left to Hungary and Spain to find the "error";
4. that the next draft of (any?) document is not distributed with the changes highlighted in some way?
Just what sort of games are these people playing - spot the difference?
And they wonder why people vote "No".....
Adrian Cobb
Moscow
Adrian Cobb, Moscow, Russia
A certain cunning evident in the actions of M. Sarkozy - note the way his father enlisted in the Foreign Legion to enter France and then had a Hungarian-born doctor collaborate to declare him unfit to serve (this is stated in the family annals). He should be watched very carefully.
Tony Gold, Bangkok, Thailand
What exactly is going on between Germany and France? The French ask the Germans to make a change, perhaps to help Sarkozy with his domestic issues, but possibly because France wants a different kind of EU. The Germans do it but tell no one else. Why? Surely at the least the printed drafts should highlight changes made, especially changes of significance. And the Germans should have told everyone, not kept the matter quiet. The devious and deceitful way this major change to the draft was slipped in does not augur well for the future of the EU and Mrs Merkel should take care to be less manipulative and more open in future. If I had been a PM and discovered this sort of trickery, frankly I would have walked out. The fact that Blair did not speaks volumes for his personal standards.
Colin , Shrewsbury, UK
I just hope the Europeans have the wherewithall to keep Sarkozy on a tight leash. He's turning trade logic on its head. Make Poverty History was all about giving the world's poor the means to work their way out of poverty. But now it's all backwards. Europe's now the poor, beleaguered victim of the evil, predatory masses.
The strange thing is that Mandelson is a lot like a paler version of Sarkozy. He also wears his saintly victimhood rather well.
Let's get these things back into proportion. As an example, just look at shoes. The EU slapped across-the-board import duties on Chinese shoes after an investigation of just 13 Chinese shoe factories found that just one of the factories (ie fewer than 8%) had received a subsidised loan and that some of the 13 were enjoying the exact same tax concessions given to every foreign company in China. How convincing an argument was that for victim status? Compare that with the billions upon billions the EU uses to subsidise its agricultural exports.
Tim Wilson, Shanghai, China
Good news! But for many reasons, Tony Blair is unfit to be the Permanent President, including that he is not a visionary, thinking creatively and strategically about the European Union. I bet Angela Merkel -- three cheers for "the Queen of Europe"! -- will win the post one day. Tony Blair also didn't force you Brits to decide once and for all whether you are in the European Union or out. One day we Europeans will decide for you Brits -- and expel Britain.
As for your UN Security Council permanent seat and veto, you Brits don't deserve them because of your small population and irresponsible voting record. Britain voted to impose genocide on Bosnia while China abstained. Britain invaded Iraq without permission from the UN Security Council -- in effect, you Brits obsoleted the council. I hope India, population 1.1 billion, takes your seat.
Shirley Jackson, Oliver, BC, Canada
As usual the latest EU agreement has been hatched with the sole intention of avoiding asking the People (who pay for the whole lot of it) what they think, and the leaders are more concerned about how issues can be fudged enough to pretend they are different/the same so as to avoid democratic scrutiny.
Deep down UK politicians of all parties know the UK electorate does not want an EU which is why we have never been asked about whether we want to belong to it, and why they are afraid to ask. The UK joined the Common Market and not the EU. Talk about a democratic deficit.
graham nixey, oxford, uk
Mark my words, after five or ten years in office French will have a different view of President Sarkozy! He will not be looked on as a savior but as a man who facilitated the decline of France as an economic and cultutral power. The man fails to understand the basic principlies of economics. I.e. one cannot build a strong economy without competitiveness and quality. The winds of change is here to stay. Either French change their mentality or lose. French have a lot to learn from us French Canadians and North Americans.
Seldan, California, USA
Sarkozy represents France's best chance in decades to extricate itself from the contraints of the outdated socialist model but at the sametime he has promised more than he can deliver and this sort of behind the scenes manouevering is no surprise. He will need some coaching from his European colleagues while giving the air of not losing any face.
Richard, Paris,
Will this one fly?
ben barr, north wilkesboro, usa/nc