Lisbon Treaty ‘is not dead’

The year 2009 is certainly a year of great uncertainties regarding the future of the EU after the Irish ‘No’, particularly when this will be coupled with the unknown impact of the current financial and economic crisis, that seems to many more structural than simply a cyclical recession. But it may also be a year of opportunities. It will certainly be a year of great expectations of change in transatlantic relations and even in global politics with the arrival of President Obama at the White House.[1] The combination of these factors seems to point to 2009 as a year of both great opportunities and great challenges in terms of the future of the EU and of global governance.

1. How does the future of the EU after the Irish ‘No’ look like?

 

There were no major changes in terms of the Portuguese debate on this issue from the previous report. The Socialist government who was responsible for presiding over the final negotiations and the signing the Lisbon Treaty continues to be, as Prime Minister José Sócrates made clear immediately after the Irish ‘No’, “deeply disappointed” with the problems in its ratification process, but also firmly convinced that the treaty “is not dead”.[2] Portuguese official position therefore continues to be very much to pursue a policy of having the Lisbon Treaty ratified and having a new referendum in Ireland after some effort to accommodate some Irish grievances, whether real, as in the case of the national Commissioners, or fictitious, as in the case of abortion. Those who continued to oppose the Lisbon Treaty in Portugal – especially the ‘far left’ – represented at the national and the European Parliament by the Communist Party and the Left Bloc, still believe, and as the latter’s MEP Miguel Portas put it, that “the treaty is dead” and any effort to try to revive it will bring discredit to the EU. In fact, the ‘far left’ had already presented a vote of non-confidence – purely symbolic given the absolute majority held by the Socialists in parliament – on the government, alleging it had not kept its electoral promise to hold a referendum on the Constitutional Treaty and hence they argued, necessarily also on the Lisbon Treaty.[3]

The fact that the conclusions of the European Council of December 2008 on the fate of the Lisbon Treaty seemed to point in that direction were therefore seen by Portuguese officials as a very positive sign. Things were moving in the direction they wished for. The reactions of the critics of the EU denounced a perversion of democracy, by having as many votes as necessary to have the people say ‘Yes’ on EU institutional reform.[4]

The upcoming European Parliament elections in June 2009 have been discussed so far in Portugal mostly in the context of a relatively tense political climate aggravated by the economic crisis, and of a very crowded Portuguese electoral year. In 2009 there will be municipal, European, and last but not least, national parliamentary elections. There has been a great deal of speculation in political circles regarding the dates of these elections. The law makes it difficult or even impossible to have these elections on the same day, yet a great deal of speculation has emerged regarding the possibility of changing this. Yet, this would require agreement at least between the governing Socialists and the main opposition party, PSD,[5] as well as the President of the Portuguese Republic.[6]

Aníbal Cavaco Silva, as Head of State, is the one with the power to actually set a date for the parliamentary and European elections – with the latter, of course, having to be held in June across the EU. The Prime Minister is the one who sets the date for the municipal elections, in principle between September and October. Prime Minister Sócrates has made clear he would not be willing to change the law to allow all three elections to take place on the same day, but he would be willing to have national parliamentary and European elections on the same date, citing a precedent for this in the past. However, this would require the President to dissolve parliament ‘in time’ for the European elections. In the absence of an ample consensus between the different political parties, which seems highly unlikely, the President is not likely to make any dramatic move on such a delicate matter. Still, an argument that has become significantly salient, reflecting the seriousness of the economic crisis, is that holding all these elections on the same day would save money.[7]

Ultimately, what will be determinant in this discussion are the political calculations in terms of cost-benefit by the major parties. The Socialist Party is widely expected to do worse in the municipal elections as well as in the European elections than in the national parliamentary elections. In municipal elections, because in the more rural areas the ‘right’ traditionally controls a larger number of municipalities – but also, particularly in the future elections, because the ‘far left’ refuses to accept any coalitions with the rulings Socialists – the key point has traditionally been whether or not this is then reflected in a majority of the aggregate popular vote. The same is broadly expected in the European elections, traditionally a way to show disapproval of national politics, and perhaps also because the right-wing PSD can now play the card that voting for them will mean voting for José Manuel Barroso’s continuation as President of the European Commission, which will become difficult if not impossible in case the European Left has a majority in the European Parliament. The Socialists are hoping that holding parliamentary and European elections as soon as possible and together will contain losses. Having the municipal elections after these two would provide some space for last minute local coalitions between the different left-wing parties.

What this shows, however, so far, is how dependent upon national politics European elections still are in a country like Portugal. Certainly, the political discussions have so far been dominated entirely by national concerns, even if there is at the same time, and perhaps somewhat paradoxically, a notion that a lot in the current crisis depends upon effective and coordinated European measures.

In terms of the formation of the new Commission in autumn 2009, the most serious Portuguese concern is whether or not its current Portuguese President of the European Commission, Barroso, will be willing and able to continue. One of the most influential Portuguese newspapers is but one example of the question everyone is asking: “The Year of the Re-Election of Barroso?” As this article notes, he seems to be running unopposed, but this might prove illusory given three reasons: first, how quickly events have been changing on the global landscape for the worst; second, how likely it is that as a result of this a turn towards more eurosceptic, ‘left-wing’ protest vote in the European elections has become; and, third, we would add, how appetizing the job is.[8]

There was some speculation in the past that he would be willing (or not) to consider instead becoming the first President of the European Council, if the Lisbon Treaty was ratified. A number of senior Portuguese politicians, including the President of the Republic and the Prime Minister, publicly expressed their wish that he should continue as President of the European Commission.[9] Now that the ratification of the Lisbon Treaty in time for the new Commission seems a thing of the past, however, that has become a more academic question, at least for the time being.

There has been some concerned speculation also as to why the European People’s Party did not formally endorse Barroso as its candidate in the December 2008 meeting. The public explanation offered, that the meeting had started late and ended early, did not fully convince one of Portugal’s most well-informed EU-watchers, Isabel Arriaga e Cunha, who noted in her blog that this might signal that Barroso was perhaps becoming a “falling star” most likely because of how displeased Merkel was with the perceived alignment of Barroso with Sarkozy and a more state-centred and expenditure happy approach towards the current crisis.[10] If this is the case, ironically, then it would show that the frequent criticism that Barroso is unwilling to take a strong position, and always strives for the middle road, is untrue; he is ready to take political risks and show leadership in a moment of crisis favouring the direction he believes is right in the attempt to overcome the current economic difficulties.

If, however, Barroso, for any number of reasons, does not succeed ‘himself’ as President of the European Commission, then a high profile Socialist would mostly likely be considered for a role of Commissioner; given the new disposition after the Irish ‘No’ that will preserve a slot in the Commission for each member state; and also given the fact that even if probably without an absolute majority the governing Socialist – according to all the polls – still seemed posed to win this year’s parliamentary elections and will therefore continue in government.[11] In that event one strong contender, who would seem to guarantee an appointment for a high profile portfolio would be Maria João Rodrigues, who presided as Minister over the initial stages of the Lisbon Agenda during the 2000 Portuguese EU-Presidency, and under the current government and during the 2008 Portuguese EU-Presidency played a key role as a special advisor to the Prime Minister on European affairs. Still, undoubtedly if that opportunity comes other contenders will emerge for such a potentially important job.

For the time being, however, the Portuguese public sphere seems to be dominated by short-term concerns with the economic crisis and quality of governance and not with longer-term implications and scenarios for the integration process itself. Still there are those, who try to engage in longer term thinking, usually in relative gloomy terms regarding the diagnosis, but not so gloomy regarding the need and ability to find some way out. This is the case for instance of the director of the main Catholic radio, Saarsfield Cabral, in an article titled the “Age of Suspicion”, where he points the absence of control and regulation over de facto transnational powers, as one of the major causes of that loss of faith in the democratic system and the need to counter it.[12] Likewise the former EU Commissioner and semi-retired elder statesman, António Vitorino, also tried to go against the current and look further ahead. Alongside a gloomy forecast of prolonged economic difficulties with no end in sight or sure way to get out of them, he puts high hopes in the new policies of US President Obama and their potential global impact.[13]

2. Transatlantic relations renewed after President Bush: top priorities

 

EU must engage new US-Presidency to deal with Bush inheritance

The Portuguese point of view tends to be generically very positive regarding the opportunities opened by the election of Barack Obama in tune with the polls that show his exceptional popularity throughout Europe and globally. The government has expressed in wishes that the longstanding alliance with the US will be reaffirmed and enhanced with the new presidency. In fact, Portugal took the lead in raising publicly the question of European states receiving former prisoners of Guantanamo – and offering to do so – as a concrete way of showing its willingness to help the new US President in solving some of the most complex aspects of the inheritance of George W. Bush.[14] At the level of the government, therefore, the willingness to cooperate with the new US President is clear, both as a result of the traditional strategic priorities of Portuguese defence and foreign policy, but also through a Europeanising of these relations. The current Portuguese government clearly believes that its membership in the EU is an important way of improving its relations with Washington and acts accordingly.

However, despite this almost universal sympathy, from Communist Nobel Laureate José Saramago to right-wing politicians and opinion-makers who nevertheless expressed their support for Obama, there are some analysts questioning the new US President’s ability to deliver on the very high expectations that surrounded his election; or at least emphasise the need for Europe to act now in a coordinated and well-thought way so as to profit from opportunities for a reform of global governances created by this administration, underlining that they will not take place on American initiative alone.

Among these more sceptical analysis is João Marques de Almeida, who points to the need to realize the many difficulties and constraints faced by the new American President.[15] Álvaro de Vasconcelos offers an example of the kind comments made by those who see the election of President Obama as a renewed chance for a global partnership translated in an effective multilateralism. At the same time this creates a challenge for Europe, requiring a more proactive stance that will go beyond simply criticising US foreign policy and move towards formulating concrete alternative proposals to the current international status quo. The challenges are many, namely in terms of international security, with matters such as NATO enlargement and Afghanistan. But there is also the need for Europeans to build and advocate a broader agenda that goes beyond the traditional US international security priorities and towards more truly global concerns. This could naturally include reforming international institutions, namely by an effort of dialogue and inclusion of different regional organizations.[16]

In terms of the top priorities for a re-definition or re-vitalisation of the EU-US relationship, a relative consensus emerges in Portugal among decision-makers and opinion-makers. The need for a renewal of the Middle East peace process and engagement with Iran is seen as a priority given the importance of this for our near neighbours in the Southern Mediterranean. Then there is the less urgent, but no less important need to reinforce multilateral institutions and by reforming or revising them, make sure that they are able to better integrate the so-called emerging powers, perhaps by engaging in the difficult reform of the UN, but also and more immediately and easily, by permanently transforming the G8 into the G20 with a guaranteed EU presence – so as to make sure that smaller countries like Portugal will have a say in such a forum. Last but not least, there is a sense of urgency because of the current crisis, in the need for stronger, more effective global economic regulations and institutions namely regarding the financial sector and the fight against off-shores and other forms of escaping regulations and not pay taxes.

How far this ambitious agenda can be achieved, however, is less clear. Again more sceptical or cautious voices point to the basic undeniable fact that no matter how much Obama was acclaimed as the “candidate of the Europeans” he will be the “American President”, as well as the potential difficulties if we look at the views so far expressed by Obama regarding the Middle East, that if taken literally – and not as part of the campaign rhetoric – do not necessarily point to an easy convergence on that vital matter with Europe.[17] Also, the old trap of falling into the temptation of national protectionism in these hard economic times may cause serious tensions between the US and the EU.[18]

Despite these different views, what the EU needs to do in order to revitalise transatlantic relations also seems relatively consensually. Europe needs to be more proactive and co-ordinated in its external policy regarding the US and the world in general, showing a greater ability to actually deliver some international public goods, alongside the very significant, but often a strategic, contribution that it already makes – primarily through aid.

This would seem to point to the urgent need for institutional reforms of the EU external action along the lines of the Lisbon Treaty to come into place as soon as possible. The fact that European leaders were able to meet and prepare a joint letter to the new US President on the eve of the election was perhaps a positive sign that there is some awareness among current European leaders of the need for increased coordination in relations with America. Another positive fact was that Obama made clear his commitment to multilateralism, diplomacy, and renewal and reinforcement of traditional alliances, namely and explicitly with Europe. In his main foreign policy text so far, published in “Foreign Affairs” during the campaign, he points to the mistake made in dismissing “European reservations about the wisdom and necessity of the Iraq war”, and goes on to underline that “I will rebuild our ties to our allies in Europe and Asia and strengthen our partnerships throughout the Americas and Africa. Our alliances require constant cooperation and revision if they are to remain effective and relevant.”[19]

However, if this gives room for hope of a renewed and more dynamic transatlantic relationship, it also means Europeans no longer have the easy alibi of being unable to work with George W. Bush. The EU faces the challenge of becoming an effective actor in the international stage, while at the same time avoiding the power politics (Realpolitik) kind of approach so traditional of international politics dominated by states. A European power politics approach to international relations would create a serious dissonance with a project of European integration born of a rejection of it between its member states.[20] Lastly, the present writer believes that there is room to question whether the current fragile institutional basis of EU-US relations, with periodic summits, while many important issues for the transatlantic relationship actually being discussed primarily either through NATO or through the G8, could not be improved. A stronger institutionalisation with the creation of a more permanent forum for a truly European-North American partnership – perhaps with the inclusion of Canada and Mexico, i.e. a ‘NAFTO’ – would seem to be a potentially very positive step in achieving effective coordination in transatlantic relations across the board.

3. Financial crisis and challenges of global governance: the EU response

 

EU initiatives seen as potentially a positive way to deal with financial crisis

The financial crisis may have demonstrated once more that the reality of globalisation in the shape of increased economic and social interdependence has its limitations in terms of governance, namely in providing effective regulations for globalised financial markets. The expectations regarding the EU in this context are very high in Portugal – European initiatives are largely seen as the only way to come up with effective answers to such an international and multidimensional crisis. Even if some will then use this starting point to criticise the EU difficulties and hesitations in responding to the crisis, and question whether more effective different policies could not be pursue. Others still see in these difficulties primarily evidence of the need to reform the EU, either to strengthen it, or to change the mandate of the European Central Bank so as to make sure that due account is given to the need to balance growth and employment with price stability.[21]

Still, economic analysts tend to emphasise the harsh lessons of crisis for smaller countries outside of Euroland and of the EU, most notably Iceland. Icelandic difficulties are generally seen as evidence of what might have happened to a country like Portugal – even more so because it would not have been shielded for so long by prejudices regarding Northern Europe’s fiscal responsibility and financial prudence, twice denied in the last few years by the banking crisis in Sweden and now in Iceland. In fact, criticism of the international rating firms was widespread, most notably pointing to the preconceptions that led to Iceland being awarded the highest possible ratings until the eve of its financial meltdown. Moreover, the belated urge of Iceland to join the EU and the Euro was seen as evidence that national sovereignty may not be as effective and as attractive now as it once were. The fact that Slovakia became the sixteenth state to join the Euro was generally seen as further proof of the attractiveness of the European currency in times of crisis. The fall of the British Pound has often been presented as further evidence of this. While at the same time causing some concern regarding the increased competitiveness of British exports vis-à-vis those of countries in Euroland, posing a renewed challenge to the principle of fair competition at the heart of the European internal market. The topic of the relative shield provided by the Euro and the wish of others to join has, in sum, been a relatively frequent theme in the Portuguese press.[22]

One important economic commentator called attention to the tenth anniversary of the Euro, labelling it the most ambitious, complex and successful monetary experience in history. Still, even he called attention to some problems for the future, mainly derived from fiscal irresponsibility resulting in growing breaches of the stability pact as well as the enduring rigidness of markets, particularly the labour markets.[23] Traditionally more eurosceptic commentators have emphasised arguments that Europe was perhaps once protective of the Portuguese economy – but in a negative way, because it shielded companies in need of reform – but now is no longer able, because of globalisation and the World Trade Organization’s rules, to perform that role, making the Portuguese economic future even more gloomy.[24]

The role of the Portuguese President of the European Commission, José Manuel Barroso, in the development of the stimulus package against opposition from some countries, namely the traditionally Europhile but fiscally conservative German government, also deserved some attention and speculation as to its impact in his ability to be reappointed to that role later this year. The EU stimulus package was largely welcomed as an important sign that the EU would support and complement the effort being made by national governments to invest more, even if its size had been reduced as a result of pressure from a number of countries, notably Germany.[25] Some commentators, particularly from the ‘far left’, have seen it as insufficient, advocating a much stronger presence of the state in the economy. While others worried about where the money would come from, and how effectively it would be spent by the states, with or without a clear strategy that would see spending in key sectors – like energy efficiency, and technological development, and not simply in building infrastructure.[26]

The more radical critique was evident in the Left Bloc appeal to a nationalisation of economically important sectors. This, in turn, caused the reaction of some analysts pointing to difficulties in setting boundaries to a nationalisation following that rationale – what would be the criteria for nationalising companies? Above all, the disastrous consequences of a kind of blind nationalisation of large sectors of the economy in 1975 was used to illustrate the point that this radical leftist strategy had a very negative impact in Portuguese economic performance in the past without any visible economic benefits for the country. Still, the fact that these proposals again emerged in the political debate – even if the possibility of such a strategy being victorious in the next elections is seen as very remote to say the least in all the polls so far – does show the radicalisation of debate on these matters as a consequence of the crisis. The government tried to show that it was indeed investing more with a vision, namely by announcing important fiscal benefits and direct subsidising of investment in solar power as well as in the improvement of energy efficiency in public buildings. [27]

There is the impression that hard times are ahead. However, some point to the fact that Portugal has the (unfortunate) advantage of being already used to this due to its relatively slow rate of economic growth in the past. The President of Republic, Aníbal Cavaco Silva, in his New Year address, labelled the past ten years as the “sad decade in Portuguese history” because there was almost no effective convergence with the rest of Europe in economic terms. Others talked of the ‘lost decade’, and perhaps strangely in a market economy, attributed most of the blame for the relative lack of economic growth, and modernisation of the economy, to failed government policies.[28] In terms of the longer term impact of the more recent economic changes, there is not a great deal of discussion. But it is clear that while some predict a relatively early recovery within one or two years, and see this as an opportunity to modernise companies and make them more competitive without fundamentally altering the existing economic and international system; others fear (or wish for) a longer and more structural crisis of the market economy resulting in a much stronger role for states. Internationally, this would result also in a fundamental change in the balance of power, with stronger states emerging among resource rich countries and playing a much greater role in global politics.

 

 

 

[1] See e.g. SpiegelOnline International: The World President. Great Expectations for Project Obama, available at: http://www.spiegel.de/international/world/0,1518,589816,00.html (last access: 21 November 2008).
[2] Lusa (news agency): José Sócrates “Desapontado” com vitória do não em referendo irlandês, news release, 13 June 2008).
[3] Left Bloc: Miguel Portas: Fingir que o ‘Não’ irlandês nunca existiu é liquidar credibilidade da Europa, press release, 13 June 2008.
[4] Jornal de Notícias: Irlanda volta a votar o Tratado de Lisboa, 23 December 2008; Alexandre Carreira: Irlandeses votam outra vez Tratado de Lisboa em 2009, Diário de Notícias, 12 December 2008.
[5] Right-wing Partido Social Democrata (PSD).
[6] The Socialists – Partido Socialista (PS) – rule an absolute majority but changes in this kind of legislation require a two thirds majority in parliament.
[7] Jorge Pinto: Eleições em 2009 custam cem milhões, Jornal de Notícias, 11 January 2009.
[8] Eva Gaspar: O ano da reeleição de Barroso?, Jornal de Notícias, 29 December 2008.
[9] See Bruno C. Reis/Mónica S. Silva: Report for Portugal, in: Institut für Europäische Politik (ed.): EU-27 Watch, No. 7, September 2008, Berlin, available at: http://www.iep-berlin.de/fileadmin/website/09_Publikationen/EU_Watch/EU-27_Watch_No_7.pdf (last access: 25 January 2009).
[10] Isabel Arriaga e Cunha: Durão Barroso, estrela cadente?, available at: http://eurotalkiac.blogspot.com (last access: 12 December 2008).
[11] The latest one gave 39.6 percent of the votes to the Socialists (PS) and 24.9 percent to the right-wing PSD, see for this and other polls commented by the foremost Portuguese pollster Pedro Magalhães his blog, available at: http://margensdeerro.blogspot.com (last access: 31 January 2009).
[12] Francisco Saarsfield Cabral: Idade da Desconfiança, Diário de Notícias, 6 January 2009.
[13] António Vitorino: Previsões, Diário de Notícias, 2 January 2008.
[14] Michael Abramowitz: Portugal Urges E.U. to Accept Former Guantanamo Detainees, The Washington Post, 12 December 2008.
[15] João Marques de Almeida: A ilusão Obama, Diário Económico, 11 February 2008.
[16] See e.g. Álvaro de Vasconcelos: O fim do carácter único da Europa?, available at: http://www.ieei.pt/ (last acess: 12 December 2008); Teresa de Sousa: O que o mundo espera da América e o que a América espera do mundo, Público, 20 January 2009.
[17] João Marques de Almeida: Bush e Obama, Diário Económico, 16 June 2008.
[18] Bruno C Reis: Presidenciais Americanas: Vitória Certa da Europa, Resultados Incertos nas Relações Trans-Atlânticas, available at: http://www.ieei.pt/ (last access: 10 December 2008).
[19] Barack Obama: Renewing American Leadership, in: Foreign Affairs 4/2007, pp. 2-16.
[20] Teresa de Sousa: A Europa tem dificuldade em afirmar-se no palco internacional com uma política de potência, Público, 12 December 2008.
[21] Luís Rego: Europa hesita na resposta à crise internacional, Diário Económico, 23 September 2008.
[22] Sérgio Aníbal: Ao fim de dez anos, o euro é mais desejado do que nunca, Público, 2 January 2009.
[23] João César das Neves: O Nascimento do Euro, Diário de Notícias, 2 February 2009.
[24] António Barreto: A Europa não é o que era, Público, 1 June 2008.
[25] Isabel Arriaga e Cunha: Plano Barroso contra a recessão já só conta com 195 mil milhões, available at: http://eurotalkiac.blogspot.com/ (last access: 2 December 2008).
[26] Portuguese government: Protocolo para apoiar instalação de painéis solares em edifícios habitacionais, press release, available at: http://www.portugal.gov.pt (last access: 30 January 2008).
[27] Ana Taborda/Maria H. Espada: Apresento-vos o meu amigo Trotsky, Visão, 12 February 2009.
[28] Helena Garrido: Décadas perdidas, Jornal de Negócios, 14 January 2009.