Author Archive

It’s air quality, stupid.

November 13, 2012 at 6:39 pm Leave a comment

The Beijing-Brussels connection

Fleishman-Hillard Brussels was particularly enthusiastic to welcome Li Hong, President of Fleishman-Hillard China, as he visited the capital of Europe last week. While almost 8000 kilometres separate Brussels from Beijing, the upcoming leadership transition in China is poised to have a dramatic impact on the economy here in Europe, as in the rest of the world. His visit was thus the perfect occasion to discuss, with a handful of EU public affairs professionals from a broad range of industry sectors, the challenges the country is facing and the outlook for various industry sectors moving forward.

Trade policy is an exclusive power of the EU which means that it is the EU, and not individual member states, that legislates on trade matters and concludes international trade agreements, covering services, intellectual property and foreign direct investment. With the globalisation of the supply chain, China has become a major, if not the most important, production hub for multinational companies operating in Europe. Any shift in labour or environmental legislation taking place in China has an impact on foreign companies producing in China. Similarly, China is looking at the EU as a landmark for matters like the classification of chemicals substances or product safety legislation.

The fruitful discussions further confirmed the global dimension of EU public affairs. As influence operates from multiple pressure points and sources across different time zones, a silo approach to public affairs is no longer viable. Companies navigate in a globalised system with global challenges (trade, environment, food security, energy scarcity): what happens in China impacts the EU and vice versa.

In view of the current global economic slowdown, all eyes are expectantly turned on market prospects in China where a burgeoning economy and growing middle class still offer untapped opportunities for foreign players, from the pharmaceutical and retail sectors to logistics, automotives and chemicals.

On November 8th at the 18th Party Congress, the Chinese Communist Party (CCP) will see new faces in many of the top leadership posts. Given the importance of the Party’s leadership to the functioning of the world’s second-biggest economy, these major generational changes will strongly impact the margin of maneuver of foreign companies operating in China. It will also have a critical influence on the future of EU-China political and trade relations and therefore on public affairs in Brussels, Beijing and beyond.

Stay tuned for a comprehensive analysis of what the upcoming Chinese leadership change can bring to the industry, European consumers and EU policy makers.

 Francesca

October 23, 2012 at 12:23 pm Leave a comment

A woman is like a tea bag- you never know how strong she is until she gets in hot water

Exactly a year ago today, I arrived in Brussels, apprehensive, hesitant but most of all excited about beginning an internship for one of the world’s largest communications agencies. It is true to say that in the early days I had officially landed in hot water; new job, new country and ridiculously high heels on the infamous Brussels’ cobble stones, my first few days at Fleishman-Hillard are probably better described as a balancing act. However, things very quickly began to fall into place and after an eventful and adrenaline-filled twelve months, (an office party on a boat, a moment or two stuck in an elevator and an office ‘fire’ included) I can hardly believe that my first episode in Brussels and my year at Fleishman must draw to a close. It has been an unforgettable year and an incomparable experience that I would recommend to anyone seeking professional experience in the public affairs sphere.  There are too many things to write in a blog post about exactly why I have enjoyed my time here so much so I have decided to dedicate this blog to the top 3. 

  1. Being an important part of the team.

An internship at Fleishman does not fall into society’s stereotypical view of an undergraduate intern. Believe me when I say that your tasks will not involve making coffees for your senior colleagues or spending days attached to the photocopier. Although there may well be times when you become better acquainted with the coffee machine than anyone either inside or outside of the office. From very early days you are trusted with client work, invited to brain storms and relied upon. Working as an intern for Fleishman is unlike any internship I’ve ever heard people speak of, you are an important part of the team and your contributions are valid. This really provides an opportunity to get more involved with your clients, develop a passion for their issues and make an impression on your colleagues.  

  1. Sense of achievement

 Working for Fleishman gives you a real sense of achievement. I have been fortunate enough to receive the support and encouragement of some of the most inspirational people I have ever met. It is thanks to this support that I have striven to continually make the most out of this opportunity in every way possible. I have been proud to work for Fleishman-Hillard and I am proud of the things that I have accomplished. From making the Christmas party 2011 at least a 4-month mission, to becoming perhaps a little too obsessed with the issue of women on corporate boards, to jointly presenting a ‘How to’ session, I am walking away from this year with a new wave of confidence. 

  1. The People 

Perhaps the most fantastic thing of all this year is just how great   the people at Fleishman are. I never imagined that the people here would not only be so talented and scarily good at what they do, but that they would also hold some of the greatest personalities that I have known. The atmosphere in this office is unparalleled! My year at Fleishman has been so much more than just an internship, it has become a way of life that I have become incredibly fond of and dedicated to. I will never forget the kindness, humour and support of all of the people in this office. 

365 days later… 

I still looked forward to coming into work this morning, excited at the thought of facing a few final challenges and grasping the opportunity to spend a final few hours working on issues that I have become so deeply passionate about. I have enjoyed spending one more day working with colleagues who are inspirational on so many different levels; their expertise, knowledge, enthusiasm and constant desire to achieve the very best. I am fully aware that I am incredibly lucky to have spent a year surrounded by people of this calibre, who have always been so willing to dedicate their time and to share their knowledge with me.  There are few people who at twenty-one can say that they have been this fortunate and I am grateful to Fleishman for giving me such a wonderful opportunity.

To all of those who I have had the pleasure of working with, I hope you will recover from the exhaustion of dealing with a years worth of never-ending energy. However, most of all, I would like to thank you for your inspiration, your kindness and your time.

I could not have had a more valuable, or more enjoyable year and I am going to miss you all a lot. 

Emma Cracknell

August 31, 2012 at 5:06 pm 1 comment

Five transformative years for Europe

At last the sun is shining, after months of rain. London gears up for the Olympics and is thronged with visitors. Brussels is quiet, Paris is empty. The roads to the south are crowded. The mountains and the beaches beckon. It must be the summer holidays. But not for those politicians and officials across Europe struggling with the latest phase of the eurozone crisis, nor for all those individuals whose lives have been turned upside down by the economic downturn and cuts in public spending.

Back in autumn 2007, when I posted the first of this regular series of blogs on European affairs, nobody could have anticipated the scale of the economic crisis which was to hit Europe, nor conceive of the threat which this would pose for the future of the monetary union and indeed for the European Union as a whole. These have been transformative years.

Five years ago the main preoccupation for the EU was approval of the Lisbon Treaty, still to be ratified by several countries and then blocked by the “no” vote in Ireland in 2008. The euro was riding high on world markets and the level of indebtedness of governments, banks and individuals was ignored. Then in the autumn of 2008 came the credit crunch. Most people were unaware how close the world came to a global banking collapse. It was only drastic action by central banks and governments which stabilised the situation.

There have been many victims since then. Almost every country has changed government and changed leader (Germany’s Merkel a notable exception). Coalitions have taken over from single party administrations. Politicians have been forced to take tough decisions, promising little other than hard times ahead, and although they have been punished at the ballot box their successors have been obliged to sustain a policy of austerity.

Ordinary individuals and families have been taking the biggest hit, whether through unemployment or cutbacks in social benefits and other government spending.

The “European social model” will never be the same again. The crisis showed that it depended upon state borrowing and the loading of debt on future generations to fund current spending. Indeed, it’s worth remembering that the Commission took the Council of Ministers to the European Court in 2004 because of the refusal of France and Germany to respect the limits on debt and spending in the Stability and Growth Pact – limits which had originally been put in place on German insistence because of fear that Italy would spend beyond its means!

Of course the emphasis now is on economic growth, but the challenge is to stimulate research and innovation, to encourage training and apprenticeship – all measures which call for public expenditure – and it is the weaker economies such as Spain where the need for such measures is most compelling, to build a dynamic economy for the future.

It’s said that European integration surges ahead in response to crises. The eurozone will only survive if it has all the attributes of a monetary union, including economic and fiscal policy-making at an EU level and the means to ensure that the rules are respected. For those countries outside the euro, and especially the UK, this development will pose a major problem – how to influence policy developments while keeping a distance from the institutional process.

As my series of blogs comes to an end I see that US Republican candidate Mitt Romney, who is attending the opening ceremony of the Olympics, has rather a sour view of alternative ways ahead, of which “one leads to Europe. The other leads to the kind of dynamism and prosperity which has always characterised America.”  It would be interesting to see Romney’s remedy for the US budget deficit. In any event the crisis is forcing Europe to put its economy on a sound footing and rebuild its dynamism and prosperity. The process may well take another five years – or perhaps more.

Michael

July 26, 2012 at 1:28 pm Leave a comment

Your starter for 10: life as a EU public affairs consultant

Some would call it a life sentence. Others would call it a vocation. Many would argue I need more than an annual summer vacation. It’s been 10 years this August since I left the European Parliament (and working for someone I miss on a daily basis) and joined Fleishman-Hillard. Here are ten reasons why I’ve been here ten years.

1. It’s personal

I have a personal stake in the EU. I was indoctrinated at the College of Europe (I’m one half of a College couple). I still get hacked off when people talk down about the European Parliament. I’m happy to admit to being a ‘believer’ in ‘the project’ of EU integration. I may not work in the EU institutions, but my chosen career allows me to participate in EU integration every day of my working life. There are few that can claim their personal interests coincide with their day job so happily.

2. It’s about the real world

The great thing about consultancy is you get to help folks from the real world understand the EU and vice versa. There’s something intrinsically fascinating about understanding different sectors and being able to translate EU jargon and arcane processes into something that means something to someone. One of the most fascinating parts of our job is getting to go up air traffic control towers, visit chemicals plants and tour breweries as part of getting to know our clients businesses. Without gaining that understanding, we’d be pretty poor consultants.

3. It’s doing well by doing good

Explaining the EU to business and business to the EU helps democracy and makes for better policy at the end of the process. Over the last ten years I’ve lost count of the number of EU citizens I’ve had to teach crash courses on the EU, its benefits and how it works. Equally, much of our work involves ensuring that our client’s insights about their businesses and what’s affecting them are translated for policymakers and presented to them in a way that’s understandable. It strikes me that we’d have pretty rubbish policy if stakeholders didn’t have a voice in the debate. And they’d be a lot less informed EU citizens out there if we weren’t around too.

4. It’s a journey

My job has changed immeasurably over the last ten years. From the issues I’ve covered to the sectors I’ve worked for and the tasks I undertake, every day is different. From following issues to managing clients, to managing people and now helping run a business, it’s been a journey. The great thing about this consultancy is your role can evolve over time, while still doing the things you love (generally all listed above).

5. It’s about thinking and doing

I like to think that I can think with the best of them, but to be honest I still wish to get my hands dirty. Whether it’s drafting a position paper, media release or getting out there to events and speaking to folks, I like the doing as much as the thinking. Generally our job is a mixture of both.

6. It’s about outcomes

All communications is about change, either in behaviour or perception. It’s great to be able to measure the success of what you do, not by counting outputs but by measuring a change in a behaviour or perception of those we’re seeking to reach.

7. It’s a business

Someone once said to me that (EU) Brussels is the least commercial town on the planet. That may be true, but in a town of policy wonks (something I’d class myself as) consultancy is probably the most commercial thing going.  Once again there’s a measurable outcome in there.

8. It’s the people

Intelligent, committed (or need to be), experienced, interested, passionate… I could go on. From my boss to the latest account executive to wow me with their knowledge, as we don’t produce crisps or indeed anything else it’s the people that are the firm. I’ve been fortunate to count some of the best amongst those I’ve worked with. Many have become and stayed friends, even after they’ve moved on. It’s always great to see Alumni at events – funny how often they speak as if they’ve come home. As I note that the average lifespan of a management team member here is well over 10 years I conclude that we must be doing something right.

9. It’s fun

It’s hard work but at the same time I’d have to say I laugh out loud at least once a working day. Ten years of doing so probably says I enjoy coming in every morning.

10. It’s not just about Brussels

Increasingly our work looks at issues from a European (national capital) and even international perspective. It’s great to be able to have conversations with trusted colleagues about how the issues are playing out in London, Berlin, Beijing and Washington. It reminds you that much of what we do here is affected by and affects others parts of the world. It takes you out of that comfortable Brussels bubble which we can sometimes inhabit.

If you too fancy a life sentence, applications can be made here.

James

July 25, 2012 at 2:55 pm Leave a comment

Banking Union: magic solution to eurozone crisis?

It seems that a European Banking Union has become the magic solution to the eurozone debt crisis. This week’s meeting of eurozone finance ministers in Brussels confirmed that European funds will provide direct support to Spanish banks, to the tune of €100bn in loans from the European Financial Stability Facility and subsequently the European Stability Mechanism.

The aim of the scheme is “to break the vicious circle between banks and sovereigns”, which implies that eurozone governments will no longer be expected to shoulder the burden of bailing out their banks in times of trouble. The debt will not be part of Spain’s government deficit, as no guarantee will be required of Spain, but in return the government will bring in tougher austerity measures, in order to cut borrowing below 3 per cent of GDP by 2014, a one year extension to the current deadline.

The plan is bound to raise a further storm in Germany, where many commentators see it as transferring risk to German taxpayers which should be borne by the shareholders of the banks concerned and their governments. Another challenge for Mrs Merkel!

The first tranche of €30bn will be transferred by the end of July and held by the Spanish government as a contingency. Madrid is committed to wholesale reform of the Spanish banking sector as a whole and major institutions will be “stress-tested” to establish their viability.

Next stage will be the creation of a “single supervisory mechanism” for the banking sector which, once established, would oversee the reform and restructuring of banks. This should be in place by the end of the year, provided that Commission proposals, due in September, can be adopted in time.

Commissioner Michel Barnier has identified the questions this raises in his statement to the Economic and Monetary Affairs Committee of the European Parliament, and he still has a lot to answer. He asks whether the supervisor would replace national authorities or complement them; how the authority can “be open” to all member countries and respect the integrity of the single market; and whether it will oversee all banks, or just international institutions and banks in difficulty. Altogether a list of big questions, and of major significance for the City of London.

There is no doubt that the scandal over the alleged fixing of LIBOR and EURIBOR rates by 20 or more global banks will further strengthen the argument for tougher EU regulation just as Europe is planning for a banking union with common rules. Barnier has lost no time in pressing for legislation which would require false reporting of Libor rates to be made a criminal offence and introduce measures to ensure oversight of the reporting system.

For years the prospect of regulation was fiercely resisted across all financial services at both the national and the European level, and still some pockets of self regulation remain, including the fixing of LIBOR rates, which provide the benchmark for a vast range of financial transactions. How times have changed, when we see the deputy governor of the Bank of England, Paul Tucker, describe the whole scandal as a “cesspit” and tells MPs that “self-certified markets are open to abuse”. It’s not an easy time to be a banker.

Michael

July 10, 2012 at 3:19 pm Leave a comment

Rio +20 boost for EU fisheries policy reform?

The word “sustainability” can cover a multitude of interpretations, but when it comes to fisheries policy there is no ambiguity:  today’s overfishing means tomorrow’s collapsing fish stocks. Until recently the Common Fisheries Policy has been a classic case of unsustainability, a stand-off between short term political pressures on the one hand and scientific evidence warning of the destruction of Europe’s fishery resources on the other. But at least change is in the air.  Rio +20 may prove a real catalyst for reform.

NGOs have condemned the outcome of the Rio meeting for its lack of specific commitments, but  I would subscribe to the view of businessGreen that the conference conclusions could have a far-reaching impact on the way that governments and business approach the whole sustainability question. On fisheries the commitments are substantial.

Of course words must now be translated into action, but there are signs of change in Europe.   The EU fisheries council earlier this month set a course for a more sustainable fisheries policy. When the European Parliament discusses fisheries reform in September 2012, using the limited extra powers granted by the Lisbon Treaty, MEPs can be expected to maintain pressure on the Council for an enlightened policy to take effect from 2013. Rio will be an important incentive for change.

The June 12 Fisheries Council commitments are still pretty vague. They called for maximum sustainable yields for different stocks to be set “by 2015 where possible” and “by 2020 at the latest”. Multiannual plans for fisheries management would be used to manage specific stocks – bearing in mind that Lisbon introduced shared national-EU competence for such management. And the banning of discards, whereby fish caught beyond the quota limits are thrown back dead into the sea, would (eventually) be introduced.

According to Hugh Fearnley-Whittingstall, a pioneer campaigner who has gathered nearly a million signatures against discards, about half of the fish caught in the North Sea is currently dumped at sea because it fails to meet by-catch rules or exceeds quota.  His campaign has been remarkably effective in reinforcing the Commission’s ambitions for change in fisheries policy.

The language used in the Rio declaration (paragraphs 158-177) combines environmental and economic measures to protect oceans and seas. On fisheries it commits the parties “to urgently develop and implement science-based management plans, including by reducing or suspending fishing catch and effort commensurate with the status of the stock” and to “further commit to enhance action to manage by-catch, discards, and other adverse ecosystem impacts from fisheries including by eliminating destructive fishing practices”.

Fisheries policy will now take on a different aspect as accession negotiations with Iceland move into their most difficult phase. Ten of 18 chapters have now been negotiated, fisheries still remain.  The prospect of a reformed CFP will be key for Iceland, which will surely settle for nothing less than a firm commitment to change. “A fishing nation like Iceland is something that the European Union hasn’t encountered before,” says Iceland foreign minister Ossur Skarphethinsson – a claim which the Norway might dispute. Indeed, fisheries and energy were the two issues which led the Norwegians to reject entry in the early ‘70s.

There are other issues where Iceland will no doubt want assurances. For example, a situation where quotas allocated to one EU country can be bought up by operators from elsewhere, as where Spanish vessels have registered in British ports and so qualified for British quota allocations, is of course consistent with freedom of establishment, but does little to respect an initial purpose of quotas, ensuring fishing opportunity to locally based fishermen.  A greater emphasis on regional management may be the way ahead here.

Michael

June 24, 2012 at 9:00 pm 1 comment

Talking straight

Frankly speaking, there’s an incredible amount of nonsense that gets written in Brussels. Whether you call it ‘Brussels English’,Eurobabble’ or ‘EU speak’, the big problem with using jargon in your writing is that it’s incomprehensible and confusing. And if your writing is incomprehensible and confusing the chances are it won’t be read, and is therefore not very useful.  

Which is a shame.

Of course, being ‘useful’ is something us consultants worry about a lot, but really – whatever job you do – there’s no point writing anything that no one will read. Ever.

So, why do we do use jargon?

Here are three main jargon traps I can think of.

1)    Familiarity. If you’ve been in Brussels for a bit you’ll have noticed that, after a while, the jargon people use in our little bubble starts to sound kinda ok. Just the other day I caught myself, with no sense of irony, using the word ‘roadmap’. Shocker. It’s a ‘plan’.

2)    Showing off. Don’t fool yourself that over-complicating your work with protracted verbiage will make you sound brainier – or vice versa.   Using clear and simple language does not make you a simpleton. I promise.

3)    Not understanding. A bit of soul searching is required here.  How many times, be honest, have you tried to cover up feeling not 100% sure about something you’re writing about by fudging it with an overused, meaningless term that seems to cover all bases?  DON’T DO IT. Have a proper think, work out what you want to say in your head, and then start writing.

Be mindful of your choice of words. Use ‘real life’ expressions you’d use back home (or that you learnt in school if you’re not a native English speaker), not the inhuman rubbish you’d expect to find in the Official Journal

The pitfalls are everywhere, but happily help is at hand. I was delighted (and, yes, just a little bit surprised) to discover that the European Commission – a traditional jargon stronghold – is itself fighting back, valiantly putting together this nifty  ‘Jargon Buster’ tool. I urge you to take a peek.

Life beyond jargon

Once you’ve clawed your way out of the jargon trap you’re already on your way to producing some really good writing. Here are a few tips for penning prose that stands head and shoulders above the average – be it a report, note, blog post or even a simple email.  It’s by no means an exhaustive list.

  • Put the important stuff first. Don’t let readers wait until the end of the sentence (or even paragraph) to discover the crux of what you want to say. The chances are they’ll lose interest and give up on you. Unless you’re writing a spy novel there really is no reason to keep things under wraps in the hope of a grand finale.  Be upfront.
  • Be economical Cut out needless repetitions, longwinded expressions and meaningless words (‘basically’ is a repeat offender).

So,

Instead of  As a consequence of   try Because                     

Instead of  In order to try To

Instead of  Fully complete try Complete

Instead of At the present time try Now

Instead of  Prior to try Before                                                            

And so on.                                                 

  • Consider structure  Aim for sentences of around 15-20 words on average, but be sure to have some variety. A nice mix of long and short sentences will give your writing a decent flow and make it much easier to read.  Keep your paragraphs shortish too – aim for five lines if you’re writing for the web. Again, it’s about considering the reader: there’s nothing worse than a screen full of text and no white spaces to give eyes and brain a metaphorical tea break.
  • Separate your ideas Try and stick to one idea per sentence – and one theme per paragraph. Otherwise the reader (or you) might lose their way.
  • Punctuate My personal hero, Lynne Truss, illustrates the fundamental importance of punctuation for conveying meaning  in her wickedly funny book – Eats, Shoots and Leaves – with this  memorable example:

A woman, without her man, is nothing.
A woman: without her, man is nothing. 

Now that’s something to think about.

  • Be active, not passive There’s something a bit shady and underhand about passive sentences with their anonymous participants. They can lead to much confusion.

So, You should meet Rich at the airport sounds a lot better than Rich should be met at the airport (Rich stands a much better chance of getting a lift in the first sentence, anyway).   

Finally – and most important of all:

  • Put the reader first As you’re writing and editing, never lose sight of who you’re writing for and how what you are saying relates to them.

It sounds like a lot to remember – and it is. Writing clear and readable prose is heaps harder than writing murky nonsense. But it’s an investment worth making. Writing is meant for reading – so make sure you’re getting read.

Catherine

June 18, 2012 at 12:03 pm Leave a comment

Women in Power – State of Play

On June 12 2012, Caroline Wunnerlich, Managing Director of Fleishman-Hillard in Brussels, was invited to bring her European expertise to a panel discussion on improving the gender balance on corporate boards in the UK and across Europe. The discussion was hosted by the British organisation ‘The 30% Club’, a group of Chairmen voluntarily committed to bringing more women onto UK corporate boards, in conjunction with one of the world’s leading international fashion houses, Louis Vuitton.

The discussion was particularly timely considering the recent European Commission consultation on increasing women’s participation on corporate boards. The outcome of the consultation will impact the Commission’s decision on whether it will take mandatory legislative measures to increase female participation, including binding quotas. The consultation, which ended on 28 May 2012, received over 400 replies from corporations, the public and private sector, business associations and women’s associations, demonstrating just how important this issue is to a range of people and organisations.

This consultation followed the launch of the ‘Women on the Board Pledge for Europe’ by European Commissioner for Justice, Viviane Reding, in March 2011. The initiative calls for publically listed companies in Europe to sign a voluntary agreement to raise female representation on their boards to 30% by 2015 and 40% by 2020. Despite the promise of self-regulation only 24 companies have signed the pledge, a disappointing statistic. To add insult to injury, between 2010 and 2012, the percentage of female board members in the largest companies listed in the EU only increased by a fraction, from 11.8% to 13.7%. It would appear that despite encouragement, company chairmen have not assumed full responsibility for the issue by taking proactive steps to generate a change long overdue. At the time of the launch of the ‘Women on the Board Pledge for Europe’, Viviane Reding alerted the European business world to count on her ‘regulatory creativity’, if significant progress had not been made to enhance women’s participation in decision-making. 

The debate on increasing female participation has revealed a wide diversion of views. While a majority of stakeholders agree that increased female participation is desirable, there is a disagreement on whether binding quotas are appropriate or necessary to achieve this goal. During the summer of 2011, the European Parliament adopted a resolution supporting binding quotas if voluntary measures proved to be ineffective. The use of mandatory gender quotas is of course a heated debate and many corporations participating in the discussions, as well as a number of MEPs, have warned against such measures. However, the Commission, whilst analysing the responses to the discussed consultation, is also assessing the success of gender quotas that are already in place in Norway and across a range of Member States including France, Spain, the Netherlands, Belgium and Italy.

Norway was the first out of these countries to introduce mandatory gender quotas, which have been in place for the board of publically listed companies in Norway since 2003. Companies in this country were called to fill 40% of the seats of their corporate supervisory boards with women. As does all regulation, the implementation of the quotas faced criticism. A particularly interesting denigration is that of the ‘Golden Skirt’ theory. This suggests that a powerful clique of women were provoked into collecting supervisory appointments, often holding 10 or more positions at a time. Whilst I envy any human-being who can successfully hold that many positions of responsibility, despite such suggestions, these quotas have actually achieved results. In Norway, before 2003, 7% of seats on supervisory boards were filled by women, today that figure is 40%. More than double the European average.

If mandatory legislative measures are to be introduced, they can be expected in the latter part of this year. Despite the controversy surrounding such actions, one thing is clear, at present self-regulation is not going far enough, fast enough. To this end, alternative options, regulatory or not, must be explored.

Emma Cracknell

June 13, 2012 at 10:59 am 1 comment

Eurozone crisis challenges UK role in Europe

Britain is buzzing with talk of a referendum on “Europe”. In May Peter Mandelson was advocating a national vote some time after 2016, when a new Europe of fiscal union will have been defined. He sees it as a way of resolving divisions within Britain’s political parties.

Last week it was David Owen’s turn. He called for a dual option: Question One on UK membership of the “European Community”, which would essentially be the single market plus extras; and Question Two on belonging to the “European Union”, which he defines as the eurozone group of countries in an economic federation. Once Britain’s foreign secretary and one of the Gang of Four which split from Labour to form the Social Democratic party in the early 1980s, Owen was always an advocate of Britain’s place in Europe, but was consistently opposed to joining the euro. He would want “yes” to his EC, “no” to his EU.

The fact is that Owen’s EC and EU cannot be so easily disentangled from each other, and while the referendum option may seem a decisive way of determining Britain’s future in Europe, there is nothing decisive about it. A negative vote would confront the nation with some deeply painful choices and be a recipe for long-term decline.

There is no doubt that the eurozone crisis is a fundamental game-changer for Britain, as it is for the whole European Union. This is the watershed. If the euro is to survive there must be significantly closer economic integration, more discipline over national budgets and a more robust European banking system. Angela Merkel is now talking of political union as well.

Britain and some other countries may wish to keep their distance, but the UK government must tread warily, for this is marshy ground. Such closer integration is bound to have far-reaching consequences for the British economy, especially over financial services. It also has implications for Britain’s influence at a global level and its role in the world.

Although British adoption of the euro is clearly out of the question, at least for the foreseeable future, it remains a fundamental responsibility of any UK government to maximise its influence over the direction of the European project. British ministers may express fierce indignation over the impact of the euro crisis on Britain’s economy (while the German economy, by the way, continues to flourish), but it remains crucially important to maximise leverage over policy and to engage with European partners, not just to shout from the sidelines.

It is hard to see any British government voluntarily choosing the referendum option. Cameron surely had no choice but to opt out of the fiscal treaty last December if he wished to avoid such a vote, but there remains a real danger that his hand will be forced by political pressures within his own party and the inroads which UKIP could make in Conservative seats in a general election. For the coalition government it would be a deal breaker, but at least legislation adopted last year to hold a referendum (only) if further powers were to be transferred to Brussels provides a useful firewall.

The right formula for Britain is as a committed member of the European Union, but with some options kept open.  Schengen, the Charter on Fundamental Human Rights and monetary union are policy areas where opt-outs have been effectively applied. Europe’s direction of travel is unpredictable. Today’s bail-out of the Spanish banks may be a sign of more decisive action, but we still await the Greek general election result, which has come to seem very much like a referendum on the survival of the euro.

Michael

June 10, 2012 at 3:52 pm Leave a comment

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A blog on politics, policy, public affairs and communications in Brussels and the European Union. The blog is written by the team at Fleishman-Hillard in Brussels. Views expressed are personal and do not reflect those of the company or its clients. You will find the contact details of our team at www.fleishman-hillard.eu

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