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Feb 8

Written by: Diana West
Monday, February 08, 2010 7:40 AM 

Protocol calls: Who in the EU gets to receive President Obowma?

While EU officials mud wrestle each other for the fun of receiving Obama and, more important, his bow in a US-EU summit to be, the words "Greek" and "economy" come together and threaten to pull the EU apart. Paul Belien explains in "The EU's Horrible Honeymoon" at the Brussels Journal:

Last week, Barack Obama snubbed the Europeans by refusing to attend next May’s European Union summit in Madrid. The Europeans are very upset. But that is not the worst of their problems, and neither is the looming bankruptcy of Greece. Analysts fear that Spain might sink the euro, the EU’s common currency, and with the euro also the dreams of greater political integration.

At this point Europe is not even halfway its 100-day political “honeymoon” since the Treaty of Lisbon, which transformed the EU into a state in its own right, came into force. So far the honeymoon has been a nightmare. Since the beginning of the year, the EU’s currency, the euro, is on the brink of collapse; Greece has been placed under EU financial supervision to prevent it from going bankrupt. Now U.S. President Barack Obama has announced that he will not attend next May’s EU summit in Madrid. It was to have been Obama’s first visit to post-Lisbon Europe – the consecration of the new political order.

Washington informed Brussels last week that Obama is not coming because it is not clear who is his European counterpart. Since the Lisbon Treaty came into force on January 1st, Europe has its own President, Herman Van Rompuy. This former Belgian politician chairs the European Council, the assembly of the heads of government of the 27 EU member states. However, there is also José Manuel Barroso, a former Portuguese politician, who is the president of the European Commission, which is the EU’s executive body. And there is José Luis Rodriguez Zapatero, the Spanish Prime Minister, who is hosting the Madrid meeting and as such co-chairs the summit meeting of the EU heads of government with Mr. Van Rompuy.

Messrs. Van Rompuy, Barroso and Zapatero all want to be the first to shake Mr. Obama’s hand and receive the deep bow which the American President is in the habit of making to foreign leaders. Because of the embarrassing intra-European squabble about who should have the honor, Obama has declined the invitation until the Europeans have figured out which of them is the most important.

Obama’s decision has come as an unexpected blow to the European leadership. It has upset them so much that they are considering postponing the summit to the autumn. Meanwhile, they have begun quarreling about who is to blame for the present debacle. The Europeans generally agree that the vainglorious Zapatero is mostly to blame, but others are damaged more. “The Spanish have made a mess of the summit but Van Rompuy and the post-Lisbon EU institutions will carry the can in the long term. The squabbling has damaged the EU in the eyes of the most powerful nation in the world,” a senior EU official said.

Although Obama’s snub hurts Europe’s pride, the euro’s monetary problems are far more serious. They not only affect Europe’s finances and economy, but may also tear down the political EU framework. When the European Commission placed Athens under EU supervision last week, Greece was almost bankrupt. Brussels has forced the Greek government to present a plan to drastically reduce its budget deficit from 13% to 3% by the end of 2012. The plan will cost the Greeks blood, sweat and tears. It includes a freeze on civil service wages and the postponement of retirement. Brussels has invoked new EU powers under Article 121 of the Lisbon Treaty, which allow it to reshape the structure of Greece’s pensions, healthcare, labor market and private commerce.

“The envisaged correction of the deficit is feasible but subject to risks,” says EU Commission President Barroso – an understatement. The Commission fears a backlash from the Greek unions, who might organize strikes and bring down the Greek government. Trade unions in other countries are nervous, too. They warn that it is unacceptable that the European Commission intervenes in setting national wages.

The EU’s Monetary Affairs Commissioner Joaquin Almunia declared that the Greek targets will be enforced strongly and that, if necessary, even more draconian measures will be taken. “Every time we see or perceive slippages, we will ask for additional measures to correct these slippages. Never before have we established so detailed and tough a system of surveillance,” Almunia said. He has demanded quarterly updates on progress towards reduction targets, as well as a first report on 16 March. “This is the first time,” he said, “we have established such an intense and quasi-permanent system of monitoring.”

Much is at stake. In the coming weeks, the strength of the euro will depend on whether the markets believe that the government in Athens is strong enough to implement the reforms or trust that the other eurozone countries will bail out the Greeks. This year the eurozone governments have already borrowed a record €110bn from the markets, thereby forcing up the cost of borrowing for countries with the weakest public finances, such as Greece, Portugal, Spain, Ireland and Italy....

Read the rest here at the Brussels Journal.

 

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