After the vote: enter Lisbon, stage left

This morning sees early evidence of the difficulties David Cameron will face on Europe, if he ends up leading a minority government or has a very slim majority.

The Spanish presidency has set out proposals to amend the Lisbon Treaty in order to allow 18 additional MEPs to take up their seats (read Bruno Waterfield for background). The Conservative Party’s Eurosceptic wing sniffs an opportunity: maybe this will allow a new PM to throw the entire treaty back up in the air.

The Taxpayers’ Alliance leads the charge:

It has been widely assumed that the hope of a Lisbon Treaty referendum was dead and buried, but this development brings it back to the fore. David Cameron has always claimed that had he been in Government when the Lisbon Treaty passed through Parliament then he would have held a referendum. Will he now promise to hold a referendum on this new version of the Lisbon Treaty if he is in charge after the General Election? […]

Grasping this opportunity would be popular, strategically shrewd and – perhaps most importantly of all – honourable to the spirit as well as the letter of the Conservatives’ EU pledges. The failure to grasp it would not only be astonishingly shortsighted; it would be the final brutal betrayal of the pledges made to the British people in a general election – the election of 2005.

ConservativeHome weighs in, to great excitement in its comments, while England Expects mutters darkly about an entirely new Lisbon Treaty being ‘rammed’ through both Houses of Parliament.

This is a storm in a teacup, it seems to me – but it’s a sign, surely, of battles to come.

If he emerges from the election as PM, I expect David Cameron will need votes from Labour and Lib Dems if he is to avoid a series of fruitless rows with the UK’s European partners.

[Read the rest of our After the Vote series.]

Baroness Ashton to resign? (updated)

And for the EU’s latest foreign policy disaster (and one that reflects enormously badly on Gordon Brown if the story is true), the Telegraph claims that Baroness Ashton is on the brink of resigning after only months in her job:

“Every day is an uphill struggle,” said a European Commission official. “No one predicts she can stay five years, not even she.”

Lady Ashton has come under fire from powerful countries led by France, for allowing the Commission to seize too much control of a new EU diplomatic service that she is building from scratch.

Her lack of political authority has been blamed for a failure to stamp out bureaucratic Brussels in-fighting over who will control the new European External Action Service, with 7,000 diplomats manning over 130 embassies around the world.

Bitter turf wars over budgets and senior posts mean the diplomatic corps will be delayed, a situation that has angered governments and embarrassed the EU on the global stage.

Following one recent row, she allegedly threatened to walk out of her job and had to be talked out of resigning on the spot by diplomats and officials.

Of course, this may be wishful thinking by the Telegraph, but it’s another shocking misstep if true…

Update: And the plot thickens. According to the Daily Mail, Peter Mandelson is floating the resignation rumours because he expects to be Foreign Secretary and needs to find a job for David Miliband.

An Ashton aide told the MailOnline the report had ‘Mandelson’s fingerprints all over it.’ Mandelson wants to force Ashton to resign and hand over the EU job to David Miliband, the source said.

Miliband, the Foreign Secretary, was offered Ashton’s job last year but refused it, reportedly because he didn’t want to spend ‘years on a plane’.

But does Mandelson really expect Labour to form the next government? And how could he push Ashton out between now and Gordon Brown naming his cabinet after the election?

Eurozone crisis – Alistair Darling needs to get off the campaign trail

If you’re in any doubt of the seriousness of the Greek sovereign debt crisis, read Mohamed El-Erian in the FT. A banking crisis has fuelled a sovereign debt crisis, which could in turn spark another banking crisis (with the whole caboodle, as I have argued, part of a sustained episode of financial instability that stretches back to the 1990s):

A number of things have to happen very fast over the next few days to have some chance of salvaging the situation. At the very minimum, the government in Greece must come up with a credible multi-year adjustment plan that, critically, has the support of Greek society; EU members must come up with sizeable funds that can be quickly released and which are underpinned by the relevant approval of national parliaments; and the IMF must secure sufficient assurances from Greece (in the form of clear policy actions) and the EU (in the form of unambiguous financing assurances) to lead and co-ordinate the process.

This is a daunting challenge. The numbers involved are large and getting larger; the socio-political stakes are high and getting higher; and the official sector has yet to prove itself effective at crisis management.

Meanwhile, the disorderly market moves of recent days will place even greater pressure on the balance sheets of Greek banks and their counterparties in Europe and elsewhere. The already material risks of disorderly bank deposit outflows and capital flights are increasing. The bottom line is simple yet consequential: the Greek debt crisis has morphed into something that is potentially more sinister for Europe and the global economy. What started out as a public finance issue is quickly turning into a banking problem too; and, what started out as a Greek issue has become a full-blown crisis for Europe.

Election or no election, the UK simply cannot afford to sit on the sidelines while this crisis runs out of the control. Alistair Darling needs to stop giving speeches to activists in Scotland and get back to work at the Treasury.

Lord Adonis stopped campaigning as soon as Eyjafjallajökull erupted. Darling must do the same as the UK faces contagion from Eurozone turmoil.

Without America, innovation will die

Jonah Golderg (of cheese-eating surrender monkey and liberal fascism fame) is no fan of Europe (Switzerland, excepted). Today, he frets that, if Obama is allowed to continue with his big gubmint ways, the world is likely to stop having new ideas.

Europe, he argues, is only able to keep afloat because it is propped up by US innovation:

America invents a lot of stuff. When was the last time you used a Portuguese electronic device? How often does Europe come out with a breakthrough drug? Not often, and when they do, it’s usually because companies like Novartis and GlaxoSmithKline increasingly conduct their research here. Indeed, the top five U.S. hospitals conduct more clinical trials than all the hospitals in any other single country combined. We nearly monopolize the Nobel Prize in medicine, and we create stuff at a rate Europe hasn’t seen since da Vinci was in his workshop.

If America truly Europeanized, where would the innovations come from?

Comparing rates of innovation between nations is no easy task, but the Economist Intelligence Unit produces an index – the last of which came out in April 2009. Here’s the top twenty, with the Europeans appearing to hold their own:

1. Japan. 2. Switzerland. 3. Finland. 4. United States. 5. Sweden. 6. Germany. 7. Taiwan. 8. Netherlands. 9. Israel. 10. Denmark. 11. South Korea. 12. Austria. 13. France. 14. Canada. 15. Belgium. 16. Singapore. 17. Norway. 18. United Kingdom. 19. Ireland. 20. Australia.

Such evidence, I fear, is unlikely to sway Goldberg. He prints, approvingly, an email from a reader which supports his thesis as follows:

I think that everything we need to know about the state of innovation in Europe is supplied by the search list results and the fact that the fifth-highest listing is this: Top 10 Inventions of the Middle Ages.

QED, say I.

Praying for European collapse

John Bolton:

The collapse or at least the decline of intra-EU political cooperation, facilitated by the corrosion of trust inherent in the EU financial crisis, inevitably will affect the common foreign and security policy. It may well affect and permanently hurt the continued quest for an “ever-closer union.”

If so, the United States and its European friends who believe in popular sovereignty, limited government and Atlanticism can only rejoice. The EU may be weaker, but the West as a whole will be stronger.

Ingham on Europe

Bernard Ingham and Margaret Thatcher
In today’s FT, William Hague underlines (again) that a new Conservative government will see the European Union as a platform for achieving progress on global issues.

With David Miliband’s enthusiasm for a G3, we’re left with robust cross-party consensus on Europe’s role as a foreign policy actor (whether it can fulfil this role is another matter).

I’m reminded of how Margaret Thatcher’s press secretary, Bernard Ingham reacted when asked, shortly after the new Tory government took office, to write a report on how the government could build public support for the European Community.

According to Robert Harris, Ingam wrote that:

A community of 250 million could achieve more than a ‘debilitated nation of 55 million, however much the latter may trade on past imperial glory‘.

Government publicity should stress this, ‘with all the instruments of the orchestra, not only central Government, reading the same score, playing the same tune and coming in on cue.’

True in 1980. Even more so thirty years’ later.

(Photo from Iain Dale.)

Foreign Office leads EU coup

It’s taken as a given here in the UK that Brits wield little influence in Europe. But apparently – not. According to the Guardian, an FCO-led coup is under way:

Germany is planning to stop what it sees as a British campaign to dominate European foreign policy-making under Lady Catherine Ashton, the Guardian can disclose.

Amid growing criticism across the EU of the performance of Baroness Ashton of Upholland, the EU’s new high representative for foreign and security policy, Berlin and Paris are alarmed at the prominence of British officials in the new EU diplomatic service being formed under Ashton.

A confidential German foreign ministry document analysing the creation of the EU’s new diplomatic service, seen by the Guardian, has concluded that Britain has grabbed an “excessive” and “over-proportionate” role…

The French contend that the inexperienced Ashton is being schooled in policy-making by the Foreign Office. Diplomats and officials in Brussels also see Britain’s hand in one of Ashton’s first appointments, made last week. She named Vygaudas Ušackas, a former Lithuanian foreign minister and ambassador in London, as the EU’s special envoy to Afghanistan. He was widely seen as the UK’s favoured contender after Britain withdrew its own candidate because it secured the post of Nato envoy in Kabul.

The Germans are also increasingly unhappy at what they see as the erosion of their influence and being cut out of decision-taking.