EU leaders strike deal on 'reform treaty'

FE Team | Published: June 24, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

George Parker, FT Syndication Service
BRUSSELS: Nicolas Sarkozy, French president, claimed to have dealt a blow to the "dogma" of competition after European Union leaders struck a deal on a new "reform treaty" in marathon talks that ended in the early hours of Saturday.
Mr Sarkozy said the new treaty opened the door for the creation of "European champions", after he secured the deletion of the words "undistorted competition" from the EU's objectives.
"The word "protection" is no longer taboo," he said. "Competition as an ideology, as a dogma, what has it done for Europe?"
There was an air of relief among the EU's prime ministers and presidents when they emerged from the summit chamber around dawn on Saturday: for a few hours the talks seemed on the brink of failure.
The Brussels summit agreed the outline of a treaty to replace the Union's failed constitution, rejected by voters in France and the Netherlands in referendums in 2005. Although stripped of its grand title and symbols of statehood like a flag and anthem, the new treaty contains many of the constitution's main ideas for making the enlarged EU more efficient and coherent on the world stage.
They include a full-time EU president, foreign minister and diplomatic service, a streamlined European Commission and more qualified majority voting. Angela Merkel, German chancellor and host of the summit, hopes the treaty will come into force by 2009.
A deal became possible after Poland finally agreed to a new "double majority" voting system, where a decision is taken in the council of ministers if 55 per cent of member states representing at least 65 per cent of the Union's population approve it.
For a while the country's ruling Kaczynski twins threatened to veto a deal, but they finally relented after gaining a delay in the full introduction of the new system until 2017. They had infuriated Ms Merkel by claiming a population-based voting formula was unfair because of Poland's losses in the second world war.
Tony Blair, British prime minister, also secured a number of concessions to protect his "red lines": guarantees of national control over foreign policy, criminal law, social security and labour law.
But Mr Blair's failure to stop Mr Sarkozy watering down the competition references in the treaty infuriated Gordon Brown, the chancellor who becomes prime minister on Wednesday.
EU lawyers insist the removal of "undistorted competition" from the Union's objectives will have no legal impact on the European Commission's powers to police cartels and anti-competitive behaviour. A new protocol would make things "even clearer", said Jose Manuel Barroso, European Commission president.
But competition lawyers say the move will have legal effect, weakening the EU's ability to fight protectionism. Mr Sarkozy endorsed that view, saying it "might give a different jurisprudence to the Commission". He said a competition policy could emerge "that will favour the emergence of European champions".
Mr Sarkozy's previous incarnation as finance minister suggests he may have in mind state intervention to create Franco-French industrial mergers.