The eurocrat and the chancellor
Gordon Brown is not much loved in Brussels. The general opinion is that he is a surly bugger who does not even pretend he is happy to be here, and who is in the habit of inventing "rows" with the Europeans in the hope of winning favourable headlines from the press back home. But your correspondent has discovered a secret Brown admirer among the group of senior EU officials who regularly attend the meetings of Ecofin -the committee that brings together national finance ministers. Apparently Brown is more than capable of being both charming and persuasive when he can be bothered. A prime example came with his success in persuading his ministerial colleagues to drop the idea of a withholding tax on savings-which threatened the London eurobond market-and instead to opt for a model based on exchange of information. Brown is also the only EU finance minister who regularly brings up the subject of third world debt. And, says the mole approvingly, "I like the fact that he is not interested in using his position to get rich himself." Another finance minister to get a rave review from the Eurocracy is Hans Eichel from Germany-"the only one who really thinks about the European economy and is not just a national spokesman." But it's thumbs down for Francis Mer, the new man from France, who has the irritating habit of accusing his colleagues of living in an ivory tower, contrasting that with his own experience of the real world in a (brief) stint as a businessman. As for Giuliano Tremonti, Italy's finance minister: black marks for not saying much in meetings, and then being overheard having an obscene chat on his mobile phone about what a total waste of time Ecofin meetings are.
A British model for the euro?
If Brown's stock is going up in Brussels, it may be partly because Britain's monetary policy framework is now being looked at as a model for the reform of the stability and growth pact-the increasingly incredible agreement whereby all countries in the eurozone promise never to run budget deficits of more than 3 per cent of GDP, on pain of vast fines. Brownian arguments, that the pact should take more account of overall levels of national debt when considering whether countries should be allowed to go into deficit, have already been acknowledged in the first official attempt to make the pact "more flexible." The next revision may attempt to incorporate the chancellor's suggestion that a distinction should be drawn between current spending and investment. It is a curious inversion of the assumption that Britain's decision to stay out of the euro meant that it would have no say in debates over how to manage the single currency. By staying out, Britain seems inadvertently to have provided an alternative model for economic management. Pascal Lamy, the French commissioner for trade, has suggested that British entry into the euro might be the occasion for a rewriting of the rules.
But EU officials are still wary of making a special exemption for spending that can be classified as investment -"just think what the Italians would do with a loophole like that," muses one. The fear is that making the stability pact more "intelligent" and "flexible" will also make it more ambiguous and meaningless. That is why nobody important has yet dared suggest scrapping the 3 per cent budget deficit limit. It may be crude, but at least it is easy to understand. And there is another problem. The 3 per cent budget limit is incorporated into the EU's treaty structure; that means scrapping it would require unanimity-very difficult in an EU of 15, with countries like Spain and Belgium which have made great efforts to balance their budgets. Oh well, say the Pollyannas-nobody will ever really get fined. The tortuous decision-making process means that in the real world you would have to run deficits of more than 3 per cent for four years before fines became a real prospect. Nobody will do that. Surely. Your diarist used to share this confidence until a recent visit to Portugal. They are in a mess-two successive years of deficits of more than 3 per cent now seem inevitable; tax receipts are falling and controlling public spending is proving very difficult.
Europe has a Clegg-shaped hole
So farewell then, Nick Clegg. The clever, personable and hard-working MEP for the East Midlands has decided to quit the European Parliament and to seek fame and fortune on the British political scene-well, fame at least. A bold decision since Clegg is a Lib Dem and has received no guarantee that he will get a winnable seat. Cleggie's departure is also a poor look-out for Brussels, since he could have been designed in a laboratory to work in Europe. He is Anglo-Dutch and is married to a high-powered Spanish civil servant, who works for the commission. He studied at the College d'Europe in Bruges, speaks many languages and has a genuine (if unfathomable) enthusiasm for telecoms regulation and trade law. If someone like Clegg decides that Brussels is a bit of a waste of time, what hope is there for the rest of us? And his assertion that MEPs are doomed to remain invisible is particularly galling for many of his colleagues, since Clegg is actually one of the few British MEPs who has a bit of a profile, with appearances on Newsnight and Today, and columns in the FT and Guardian. And the ultimate accolade... space in Prospect.
