[A-List] EU integration struggles: new Franco-German axis

["Michael Keaney" <michael.keaney@xxxxxx>]

Blair admits new row with Paris
By James Blitz in London and Hugh Williamson in Berlin
Financial Times; Nov 05, 2002

Tony Blair yesterday publicly acknowledged tensions with Paris - this time
over the creation of a common European defence policy - as France and
Germany took a fresh step towards joint co-operation on reform of the EU's
stability and growth pact.

A week after the prime minister and French president Jacques Chirac argued
over the future of EU farm subsidies, Mr Blair admitted to a clear
"disagreement" with Paris over the future of the EU's fledgling European and
Security Defence Policy, or EDSP, with the UK and France each determined to
shape its direction. Mr Blair sees the ESDP as an instrument for improving
Europe's military capabilities through a strong institutional link to Nato.
France views the ESDP as becoming in the long term more distant from, if not
independent of, Nato.

At his monthly press conference in Downing Street, the prime minister
acknowledged "French frustration" over the line the UK was taking over ESDP.
"I understand why some people in France . . . believe we have somehow lost
our enthusiasm for European defence," Mr Blair said.

"That is not true. We still believe it is entirely the right way to go." But
he added: "It will only succeed in my view if, one, it is done on a proper
basis so it is complementary to Nato and, secondly, that we lever up our
defence capabilities. So there is a disagreement there."

The tensions between London and Paris on defence policy came as France and
Germany moved to strengthen joint co-operation within the EU. The finance
ministers of both countries called for EU economic policy-making to take
greater account of inflation and unemployment rather than strictly focusing
on budget deficits imposed by the stability and growth pact.

Less than two weeks after the French and German governments controversially
joined forces on the issue of farm spending at an EU summit, their finance
ministers agreed on five "parameters" - including inflation and
unemployment - that could be used to judge a country's economic performance.

Yesterday's co-operation between Paris and Berlin is likely to be viewed
with concern in London as another sign that the Franco-German motor which
once dominated European policy-making is showing signs of life again.

However, the UK government can take comfort that some of the ideas being
mooted by the French and German finance ministers - such as greater
evaluation of a country's performance in sovereign debt reduction - are
similar to those put forward by Gordon Brown, the chancellor.

Finance ministers from the 15 EU states are to meet in Brussels today, where
reform of the stability pact governing the euro is certain to be discussed.
It is unlikely that any final decision on reform of the pact will be taken
until spring.

The dispute over ESDP has become critical because EU monitors backed by Nato
troops are implementing a peace accord in Macedonia. Britain has made it
clear it cannot support the EU going into Macedonia without an accord with
Nato.