Anyone Fooled?
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Jacques Chirac left yesterday's meeting of heads of government in Brussels yesterday claiming to have slain the dragon of Anglo-Saxon ultra-liberalism by knocking back Europe's services directive. Tony Blair slipped out the back door, without talking to press. For good measure, Chirac launched another attack on his British counterpart, demanding that the UK's £3.5 billion rebate from the EU should be scrapped. And this after Blair gave in to Franco-German demands for concessions in the directive!

Chirac's "victory" comes as French voters look set to reject the EU constitution in May's referendum. Last night's carefully-choreographed press conference allowed Chirac to depict the obstacles placed in the way of EU workers hoping to trade in other countries as a triumph for tough-talking French diplomats and a slap in the face for liberals planning to dismantle France's cherished vision of a "social Europe."

British newspapers left the conference with an attack of the vapours. Blair was betrayed and humiliated, raged the Telegraph, which, after all, has its own reasons for making the prime minister look like a fool. Surely Blair has learnt by now not to trust Chirac, said The Sun. The wily old hypocrite, who slams British and American liberalism for increasing the wealth gap while defending the obscene Common Agricultural Policy will always stab you in the back, the paper continued.

But does the entire furore not look just a little bit suspicious?

Of course Chirac was going to win concessions on the services directive. EU competition commissioner Charlie McCreevy said as much several weeks ago when Chirac and his ally Gerhard Schröder bent his ear over the issue. This didn't prevent Chirac continuing to rant about the directive's flaws to every French journalist who would listen.

EU commission president José Manuel Barroso complained on Tuesday that France really had to learn to divorce the issue of the EU constitution from the separate issues of the services directive and Turkey's application to join the EU. However, the directive was already doomed in its previous form. Germany, previously a supporter of the directive, turned against it as German unions caught a whiff of the trouble their counterparts in France were causing by scaremongering about the order. Germany's government has a crucial election coming up too, and with 5.2 million unemployed does not need the opposition or the unions warning voters that yet more jobs will be lost to swarms of Polish accountants and Slovenian hairdressers. Luxembourg's prime minister, who currently holds the EU's presidency, came out against it. McCreevy, as we said, had changed his tune too.

And then there is the issue of British voters too. In stark contrast to France, no-one in Britain has heard of the Bolkestein Directive. Planned to help service workers to ply their trades in other EU nations, the British government has backed the directive from the beginning. However, there's an election coming up in Britain soon too. Brits might like the idea of cheap Polish plumbers and Estonian brickies undercutting expensive and inevitably overbooked British providers, but small businesses of this sort are the backbone of the nation's economy. The idea is good in principle but the threat of British businesses losing out to cheaper, foreign competition could very easily be exploited by organisations hostile to immigration and outsourcing - like the Daily Mail and the Conservative Party, which has already rattled the government with its populist take on asylum seekers. The Tories' supposed admiration for economic liberalism takes a back seat to anti-immigration troublemaking when there is an election at stake.

Put simply, Blair didn't see the fight as worth picking. Besides, the directive is not dead, despite Chirac's gloating. It goes back for a longer period of consulting - but, crucially, it will be out of the way while France votes on the constitution.

Nevertheless, The Times is scathing on Chirac's behaviour:

"M Chirac has jumped on the bandwagon, seized the wheel, and chose a dinner on Tuesday to condemn liberal market principles as "the new communism of our age".

"This will be a surprise to those who had the misfortune to spend time in the labour camps. In reality, what this sad saga and his ludicrous statement illustrate is that Chiracism is the new infantilism of our era. His crass protectionism is naked populism pure and simple. In a similar vein, as part of yet another political tack, he opted yesterday to embrace the cause of poverty in the Third World (as if those souls had not suffered enough) and this despite his unrelenting refusal to contemplate the wholesale overhaul of a Common Agricultural Policy that condemns millions of people there to abject misery."

Indeed, Chirac's crowing comes from a position of weakness. His government is much more worried than it pretends about the sudden drop in support for the EU constitution. Brussels is seriously rattled by the French opinion polls too - so much so that it was willing to make concessions, despite Barroso's bluster on Tuesday.

If Chirac loses the May 29th vote, the remaining two years of his presidency will look bleak indeed. Such a defeat would almost certainly spell the end of his ambitions to run for a third term in 2007.

And this adds more spice to his situation. As we reported this week, pretty much the entire administrative and political establishment of Paris city council during Chirac's reign as mayor has gone on trial in a multi-million Euro corruption scandal. Chirac sat in the centre of this web of corruption, but is glaringly absent from the trial.

He bullied a presidential immunity law more suited to a banana republic through the courts when this case looked like it would go to trial: Thanks to the 2002 law, he cannot be prosecuted or face questions while in office. Pity, that: The other conspirators face jail sentences of up to ten years if they are found guilty.

Unfortunately for M Chirac, there are several dozen French judges who would just love to pick the President's brains on what he knows about the Paris corruption scandal once he leaves the job.

Failing to persuade French voters to support the constitution would surely mean that Chirac's forty-year political career would end in the ignominy it deserves.

That rebate again

And as for that demand that Britain's rebate should be scrapped? Newspapers depict this as another knife in Blair's back. British voters will probably reject the constitution next year, but are certain to if Blair loses Britain's £3.5 billion annual rebate, secured by Mrs Thatcher back in the early 1980s.

The EU's other 24 countries are dead against Britain receiving such a payment, particularly as the ten new EU members, substantially poorer than the UK, have to contribute to it. Britain's government, however, is equally determined to keep the rebate: Foreign minister Jack Straw threatened yesterday (before Chirac's outburst) to use Britain's veto to block any moves to end the rebate.

The Telegraph does some sums: Between 1984 and 2002, Britain paid 38 billion into the EU - France paid only 18 billion, despite having an economy much the same size as Britain (today) and a larger economy than Britain's back in the 1980s.

A government official laid British objections out in simple terms too: Even with the rebate, Britain pays two and a half times what France pays into the European Union. If the rebate is ended, Britain will pay fourteen times what that similar-sized economy across the Channel pays.

EU ministers gather to decide the next round of EU budget spending in May. Britain's rebate is supposedly for the chop, as M Chirac kindly reminded us. However, if Blair is really determined to keep it, Chirac's vocal opposition to the rebate might be another set up to provide Blair with a victory against the wicked French - in return for Blair's collusion on the services directive. After all, nobody in France gives a fig about Britain's rebate - the French are too busy wallowing in their ill-gotten Common Agricultural Policy loot to bother about a paltry £3.5 billion. It would probably surprise most Frenchmen to hear that the rebate existed at all.

CAP in hand

While France rages in horror at the EU's services directive, Britain is occupied with what the Times called yesterday the "grotesque and obscene" Common Agricultural Policy. Yesterday it was revealed that the lion's share of Britain's CAP loot goes to big businesses and even farms owned by the royal family.

Tony Blair's government has made reform - and preferably abolition - of the CAP a central plank of his EU policy. Opposition to the CAP has even begun to manifest in the form of an unlikely alliance between fair trade NGOs, who resent the damage the system does to millions of developing world farmers, and Eurosceptics, ever watchful of any corrupt and unfair policy emanating from Paris or Brussels. Even pro-EU newspapers like the Guardian and the Independent have attacked the CAP.

Add to this consumers groups, who are beginning to discover that they would pay a great deal less (up to £800 a year) for their annual food shop if CAP was abolished and you have the beginnings of what could be an exciting cross-party movement.

Whatever Britain's farmers get from the CAP is nothing compared to how French agribusiness is propped up by the system. As most commentators have noted, Chirac's declared sympathy with the world's poor huddled masses stinks of hypocrisy when squared with his determination to block reform of the CAP. Last year, he scored a coup by persuading Germany's Gerhard Schröder to support the policy for another decade at least, effectively condemning millions to poverty, starvation and worse.

Despite this, the EU has certain aspects of CAP in its sights. Opposition is rising, perhaps not against the policy itself but France's
(and to a lesser degree, Spain's) huge share of the funds.

CAP uses about half the EU's entire budget. The EU needs more cash - "you can't have more Europe for less money," as Barroso's predecessor Romano Prodi said. Here's a thought: Abolish CAP and you can have as much Europe as you like.

Unlikely? Well, here's another idea: Britain should agree to drop its rebate, but reduce its payments to Brussels by the exact sum of the rebate. It should then announce that it will no longer pay to support the Common Agricultural Policy, and reduce its contribution forthwith.

That should concentrate minds. Britain will soon be the EU's biggest paymaster, and as its rivals in the European Union have repeatedly demonstrated, money is what matters to them most of all.