Airstrip One

The Battle for Europe is lost. The Battle for Britain has begun - 16th January 2003, 20.56

France and Germany finally revealed their compromise deal for the future governance of the EU and introduced the notion of the Dual Presidency to rank alongside that other famous constitutional cuckoo, the Dual Monarchy. Let's hope that, if it is implemented, it does not last the fifty-one years that Austria and Hungary managed to stay together.

The proposal was unveiled against a backdrop of increasing indifference from the nation-states to the desires and goals of the Commission as they struggle with economic stagnation. The International Herald Tribune examined the latest report of the Commission on member states and disclosed that most countries did not get good marks. For the first time since 1992, and in a black mark against the integration of Euroland, the report stated that cross-border investment and trade had declined as a proportion of the size of the total European economy. Productivity of European workers had also dropped to 83% of their American competitors. The Commission concluded that deficit spending could worsen Europe's forthcoming demographic crisis and might prevent the EU from becoming the most competitive economy in the world by 2010.

These figures show that the European economy is becoming less competitive and the EU does not have the capacity to foster structural reform. Even the promised integration from the creation of Euroland has faltered. The Commission responded to the recalcitrant nations by taking more cases to the European Court of Justice, including the priority 'infringement proceedings against five countries for failing to implement an EU directive ‘‘setting out the minimum standards for the protection of laying hens.’’'

The Franco-German proposal represented a poorly-organised compromise between the intergovernmental and the federal approaches. The former wanted a President based on the Council of Ministers; the latter, a President based on the European Commission. Their solution: we'll have both.

Chirac explained the compromise to journalists last night: "In this spirit (of cooperation), France accepted that the president of the commission be elected by the European Parliament, and Germany accepted that the European Council (Council of Ministers) is chaired by a president elected by the European Council with a qualified majority for a duration of 2 1/2 years or five years."

This proposal will be submitted to the Convention and will probably form the basis of any new institutional arrangements. This dual executive is an awkward compromise that will prevent any reform from touching the EU for years. As the Council of Ministers will be unwilling to elect a president that outshines them, the President of the Commission, now legitimately elected by the European Parliament will gain the position of primus inter pares by default.

Blair has lost the battle in the Convention even before it begun. Expect a rearguard action whilst he attempts to keep the redcoats active on tax, foreign policy and the army. Now is the time to call for a referendum.