EU: Amountain to climb
Before the European constitution debacle and the French-led flare-up over Britain's EU budget rebate, businesses in the 25-member group might have been looking forward to the next six months. On July 1, the UK became 'president' of Europe; a role which while not as commanding as it sounds, gives the country powers to define the course of policy negotiations - at least for the rest of 2005. The UK's popularity in Europe is at its lowest since most people can remember, especially in the eyes of France and Germany. Its position has been undermined by garrulous squabbling over the bloc's budget. Against this backdrop, Blair and Brown will struggle to make ground on their pro-business agenda. But maybe that's the real reason for the row. Germany, and in particular France, have a number of reasons to keep Blair and Brown quiet over the next six months. The latest breakdown in relations came amid a string of minor tiffs over Europe's economy and employment laws.
Chirac, mindful of France's powerful trade union movement, is reluctant to adopt 'Anglo-Saxon' free market economics for fear of compromising his own country's social model. In distancing Britain's policies from those of Europe, Chirac has made Blair and Brown's job of championing rules popular in the UK - its Working Time Directive opt out, for example - all the more difficult.
In general, freeing up labour markets is central to the Lisbon agenda, yet Germany has made slow progress. The result is the highest unemployment levels for 60 years and business sentiment in the doldrums. As an aside, both Chirac and Schroeder need to regain ground lost in recent domestic defeats - over the EU constitution and the lost Bavarian state elections respectively. Bullish British leadership of the EU could hinder that face-saving process. If the last few months are anything to go by, Brown and Blair will find the UK presidency no picnic. What was an uphill struggle has become a mountain to climb.
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