• user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '3:947b58363d72d477852b594f8c69ace3' in /home/cer/staging/includes/cache.inc on line 27.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>The vexed EU budget is supposed to be the main topic of discussion when Germany\'s chancellor, Angela Merkel, meets David Cameron for supper on Wednesday in Downing Street. But this meeting is really about much more: the future shape of Europe and the UK\'s place in it. Alas, neither Cameron nor Merkel have a coherent plan.</p><p>The press likes to portray prudent Britain as engaged in a solitary battle against wasteful Brussels bureaucrats, spoilt French farmers and needy Eastern Europeans. But Britain is not alone: Germany, the Netherlands, Austria, Finland, Sweden, even Italy have all been calling for a freeze in EU spending. The difference is that these countries understand the need for a compromise as the rest of the EU (the \"net recipients\" of EU money) would prefer a bigger budget.</p><p>In the past, Germany often used to lubricate compromise by throwing in an additional billion here or there. Today, Germany – feeling already overstretched by euro rescue efforts – is in no mood to spend more. So Merkel wants to reduce the European commission\'s planned budget framework by about €100-130bn. Cameron wants it cut by €200-250bn. The difference in their positions – stretched over the seven-year period over which EU budgets run – is too small to warrant a political showdown.</p><p>However, Merkel is seriously worried that Cameron will employ his veto at the EU summit on 22 November to placate his party colleagues at home. Since the Commons revolt last week, Cameron seems has little choice on this. The Germans fear the wider impact of a botched summit: \"If we fail to reach an agreement [on the budget], if we cannot even sort out our routine business, it will be a bad signal for the December summit [where bigger issues, such as banking union and help for Spain are at stake]\", a Merkel adviser told me a few weeks back in Berlin.</p><p>Merkel is also worried that with every new veto Cameron is backing himself into a corner from which there is ultimately only one escape: EU exit. Now that Labour has discovered the EU veto as a domestic political tool, this danger seems even more acute.</p><p>The Germans want Britain to stay in the union. They need a large, liberal-minded ally lest the EU becomes dominated by Gallic ideas about industrial policy and trade protectionism. But Berlin is becoming exasperated with British tactics, in particular when Cameron holds up EU treaty changes needed to underpin the euro, in an attempt to cajole other Europeans to \"return powers\" to Britain. Another Merkel adviser warned: \"It is one thing if the UK is engaged in negotiations on a particular issue and makes demands on this issue in line with its national interest. It is quite another if the UK makes unrelated demands in negotiations on a euro issue.\"</p><p>Most German politicians have some sympathy for the political constraints under which Cameron is conducting his European business. Many are upset when British politicians in turn call on Merkel to ride roughshod over German public opinion and parliamentary majorities and move straight to eurobonds and Europe-wide guarantees for banks.</p><p>Merkel also knows that the British-German relationship is key for the future shape of a multispeed Europe. To save the euro, the countries that share the single currency will have to move closer together. They have to build a fiscal union, a banking union and the democratic oversight that these require.</p><p>No one in Berlin expects, or wants, Britain to be fully part of this. But other EU countries who are not in the euro, such as Sweden and Poland, fear that in a two-tier Europe they will be marginalised and powerless. They insist on having at least one foot in the new structures.</p><p>An obstinate British position will make it much harder for Germany to smooth the boundaries between the euro ins and the euro outs. It will also weaken Cameron\'s ability to fight for the City when the eurozone banking union is constructed. Merkel will therefore plead with Cameron to show some flexibility and vision. Will he just answer, \"nein\"?</p>', created = 1508700218, expire = 1508786618, headers = '', serialized = 0 WHERE cid = '3:947b58363d72d477852b594f8c69ace3' in /home/cer/staging/includes/cache.inc on line 112.
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  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>\"The consequences are likely to be far-reaching. Not only will governments struggle to push through the needed reforms, but there is a risk of a broader backlash against the market economy and the European Union,\" said Simon Tilford of the CER,</p><p></p><p>The risk, however, is that these and other structural reforms become discredited because voters associate them with declining living standards and rising inequality, according to Simon Tilford, chief economist at the Centre for European Reform, a London think tank. \"The consequences are likely to be far-reaching. Not only will governments struggle to push through the needed reforms, but there is a risk of a broader backlash against the market economy and the European Union,\" he said.</p>', created = 1508700218, expire = 1508786618, headers = '', serialized = 0 WHERE cid = '3:a0105a06fbb973e3b5108beee2b9f742' in /home/cer/staging/includes/cache.inc on line 112.
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  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>\"The consequences are likely to be far-reaching. Not only will governments struggle to push through the needed reforms, but there is a risk of a broader backlash against the market economy and the European Union,\" said Simon Tilford of the CER,</p><p></p>', created = 1508700218, expire = 1508786618, headers = '', serialized = 0 WHERE cid = '3:2778adf9e1ff3311837d4917e34b5cfe' in /home/cer/staging/includes/cache.inc on line 112.
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  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>According to Philip Whyte, a senior research fellow at the&nbsp;CER in London, to accept that the eurozone suffers from a structural flaw that can only be corrected by more federalism is politically explosive. In his <a href=\"http://www.cer.org.uk/sites/default/files/publications/attachments/pdf/2012/essay_bankingunion_5dec12-6704.pdf\" target=\"_blank\"><span style=\"text-decoration: underline;\"><span style=\"color: rgb(0, 102, 204);\">analysis</span></span></a>, he points out that a more federal structure goes at the heart of sovereignty because it allows European bodies to dictate the fate of national banks, putting taxpayers\' money at the disposal of the eurozone to solve problems in other member states. This is the reason, the analyst believes, why it takes so much time to accept the idea of a banking union and all its implications.</p><p>It is clear that a fully fledged banking union in the euro area will not emerge any time soon, Philip Whyte writes, because political constraints are too big. Acquiescing a partial federalisation, embodied in the supervisory mechanism for the banks, however, will not solve the problems, the analyst is convinced underscoring that the rest of the bitter medicine - direct recapitalisation of banks, creating a resolution mechanism and deposit guarantees - cannot be avoided. Moreover, he explains, partial solution creates another problem - destabilisation of the EU-27 by diminishing the status of the non-euro countries.</p>', created = 1508700218, expire = 1508786618, headers = '', serialized = 0 WHERE cid = '3:ce93cc6ce230422e1cfd1c41a4735734' in /home/cer/staging/includes/cache.inc on line 112.
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  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>According to Philip Whyte, a senior research fellow at the&nbsp;CER in London, to accept that the eurozone suffers from a structural flaw that can only be corrected by more federalism is politically explosive. </p>', created = 1508700218, expire = 1508786618, headers = '', serialized = 0 WHERE cid = '3:99e4bd91606e8192f07cc9ba49dbcd04' in /home/cer/staging/includes/cache.inc on line 112.
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  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>\"For two decades Britain\'s EU debate has been one-sided: Eurosceptic politicians and commentators have set the agenda, while few politicians (or business leaders) have argued the merits of the EU,\" Charles Grant of the CER wrote in a recent paper. \"Pro-EU politicians have seen the short-term advantages of saying little about an unpopular subject. So they have lost the argument by default.\"</p>', created = 1508700218, expire = 1508786618, headers = '', serialized = 0 WHERE cid = '3:233339d68a8a06c84db000c563b06502' in /home/cer/staging/includes/cache.inc on line 112.
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  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>\"For two decades Britain\'s EU debate has been one-sided: Eurosceptic politicians and commentators have set the agenda, while few politicians (or business leaders) have argued the merits of the EU,\" Charles Grant of the CER wrote in a recent paper.</p>', created = 1508700218, expire = 1508786618, headers = '', serialized = 0 WHERE cid = '3:e256a2ee010e8de98e588d195c312a05' in /home/cer/staging/includes/cache.inc on line 112.
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  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>Europe\'s common security policy is \"stuck between the strategic realities of declining defence budgets, waning European power in the world and a lack of will and ability to project strategic force outward\", said Hugo Brady, a senior research fellow at the CER.&nbsp;\"And on the other side, political inertia to do serious stuff in defence.\"</p>', created = 1508700218, expire = 1508786618, headers = '', serialized = 0 WHERE cid = '3:3227d4f886a611271ccddf1b6a607299' in /home/cer/staging/includes/cache.inc on line 112.
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  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>\"È stata una risposta un po\' emotiva - precisa Philip Whyte economista del think-tank Centre for European Reform - nel senso che i timori politici sono apparsi dominanti sulle considerazioni tecniche\".</p>', created = 1508700218, expire = 1508786618, headers = '', serialized = 0 WHERE cid = '3:2d2a95bc47e87c107a40d6395646833f' in /home/cer/staging/includes/cache.inc on line 112.
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Can Angela Merkel talk Cameron into being a more flexible ally? spotlight image

Can Angela Merkel talk Cameron into being a more flexible ally?

Written by Katinka Barysch, 07 November 2012
From The Guardian

The vexed EU budget is supposed to be the main topic of discussion when Germany's chancellor, Angela Merkel, meets David Cameron for supper on Wednesday in Downing Street. But this meeting is really about much more: the future shape of Europe and the UK's place in it. Alas, neither Cameron nor Merkel have a coherent plan.

The press likes to portray prudent Britain as engaged in a solitary battle against wasteful Brussels bureaucrats, spoilt French farmers and needy Eastern Europeans. But Britain is not alone: Germany, the Netherlands, Austria, Finland, Sweden, even Italy have all been calling for a freeze in EU spending. The difference is that these countries understand the need for a compromise as the rest of the EU (the "net recipients" of EU money) would prefer a bigger budget.

In the past, Germany often used to lubricate compromise by throwing in an additional billion here or there. Today, Germany – feeling already overstretched by euro rescue efforts – is in no mood to spend more. So Merkel wants to reduce the European commission's planned budget framework by about €100-130bn. Cameron wants it cut by €200-250bn. The difference in their positions – stretched over the seven-year period over which EU budgets run – is too small to warrant a political showdown.

However, Merkel is seriously worried that Cameron will employ his veto at the EU summit on 22 November to placate his party colleagues at home. Since the Commons revolt last week, Cameron seems has little choice on this. The Germans fear the wider impact of a botched summit: "If we fail to reach an agreement [on the budget], if we cannot even sort out our routine business, it will be a bad signal for the December summit [where bigger issues, such as banking union and help for Spain are at stake]", a Merkel adviser told me a few weeks back in Berlin.

Merkel is also worried that with every new veto Cameron is backing himself into a corner from which there is ultimately only one escape: EU exit. Now that Labour has discovered the EU veto as a domestic political tool, this danger seems even more acute.

The Germans want Britain to stay in the union. They need a large, liberal-minded ally lest the EU becomes dominated by Gallic ideas about industrial policy and trade protectionism. But Berlin is becoming exasperated with British tactics, in particular when Cameron holds up EU treaty changes needed to underpin the euro, in an attempt to cajole other Europeans to "return powers" to Britain. Another Merkel adviser warned: "It is one thing if the UK is engaged in negotiations on a particular issue and makes demands on this issue in line with its national interest. It is quite another if the UK makes unrelated demands in negotiations on a euro issue."

Most German politicians have some sympathy for the political constraints under which Cameron is conducting his European business. Many are upset when British politicians in turn call on Merkel to ride roughshod over German public opinion and parliamentary majorities and move straight to eurobonds and Europe-wide guarantees for banks.

Merkel also knows that the British-German relationship is key for the future shape of a multispeed Europe. To save the euro, the countries that share the single currency will have to move closer together. They have to build a fiscal union, a banking union and the democratic oversight that these require.

No one in Berlin expects, or wants, Britain to be fully part of this. But other EU countries who are not in the euro, such as Sweden and Poland, fear that in a two-tier Europe they will be marginalised and powerless. They insist on having at least one foot in the new structures.

An obstinate British position will make it much harder for Germany to smooth the boundaries between the euro ins and the euro outs. It will also weaken Cameron's ability to fight for the City when the eurozone banking union is constructed. Merkel will therefore plead with Cameron to show some flexibility and vision. Will he just answer, "nein"?