Cicero Policy Briefer

Issue 26, July 2008

Sarko Show left reeling from Irish No

By Michael Cooper

It was all set up perfectly – the French Presidency of the European Union was a chance for Nicolas Sarkozy to gain some much-needed good publicity. After a first year in office which has not set the world alight as expected, and in which he has earned more column inches for his personal life than for his political exertions, here was the opportunity to push forward ambitious initiatives on a European scale which had been lacking domestically.

The Member State which picks up the Presidency of the Union for the second half of the year is often, to some extent, merely continuing the work of its predecessor. Not so with France – or at least, that was the plan. With membership bulging at 27, the chance to sit at the head of the table does not come around regularly. Sarkozy had hoped to centre his tenure on policy – from energy competition to the controversial ‘Mediterranean Union’ (his own brainchild which has had the Germans up in arms), and even proposals for a common consolidated corporate tax.

Furthermore, it was a chance to bask in the glory of his greatest, and perhaps only, diplomatic coup of his term in office thus far. In the wake of his country’s rejection of the Constitutional Treaty, quickly followed by that of the Dutch, Sarkozy championed a ‘mini-Treaty’ which would ensure that necessary, technical arrangements to allow the Union to function more efficiently were pushed through, without referendum, at the expense of overarching, unpopular political gestures. Having then proceeded to take the credit for Lisbon Treaty he was set to oversee the full ratification of the text by all Member States by the end of the year. That was, of course, until Irish voters caused him to rethink.

Sarkozy is now left with a completely different role for the rest of 2008. His role as policy initiator has switched abruptly to that of negotiator in a process that is as – if not more – sensitive than that which faced leaders after previous referenda embarrassment in 2005. Following a summit in Brussels in the wake of the rejection, word emerged that a plan of action would be thrashed out over the following months. Thus far, Sarkozy has pointed the finger at Trade Commissioner Peter Mandelson for WTO negotiations which will disadvantage Irish farmers.

While such accusations may not necessarily do the President’s diplomatic credentials any favours, there is an underlying issue at stake during the French presidency which lends to attacking the liberal, free-market voices in the Union. The Barroso Commission, and in particularly Charlie McCreevy’s hands-off attitude to financial market regulation, did not sit well with backers of the traditional European social model. With the new Commission due to take its position in just over a year, political discussions around who will be in charge in of key portfolios are rife. The financial services industry has enjoyed a period under McCreevy in which the European Commission has looked to harness its potential while avoiding restrictive regulatory measures. That could all change, as growing disquiet from interventionist corners of the Union makes itself felt. While Sarkozy’s time in the sun may not produce headline policies or any meaningful consensus around Lisbon, the effects of behind-the-scenes political bargaining could be felt for years to come.

Michael Cooper can be contacted on +44 (0)20 7665 9530 or click here to email.