BRITISH Prime Minister Tony Blair, as the European Union president, may have been officially in charge of the budget negotiations, but it was Germany's new Chancellor, Angela Merkel, who played the critical role of honest broker -- and dramatically rewrote the rules of European politics. Ms Merkel arrived almost as unknown as she was powerful. As leader of Europe's largest country, its biggest economy and its biggest paymaster, the German Chancellor could hardly fail to play a dominant role, but how she played it would be critical. A senior EU official said: "All eyes were on her." Much to Mr Blair's delight, and French President Jacques Chirac's dismay, she abandoned the tactics of her predecessor, Gerhard Schroeder. Rather than considering the Franco-German axis as the paramount motor of Europe, she acted as an independent arbitrator. "What normally happens at these summits is that Chirac and Schroeder stitch it all up beforehand," one official said. "Merkel has been two things -- she has been constructive and she has not been Schroeder." At dinner on Thursday, she rebuked the other leaders for spending so much time arguing over comparatively small amounts of money -- E20 billion ($32 billion) spread across 25 countries over seven years. Ms Merkel spoke of the need for a European program to improve the quality of mathematics teaching so the leaders got their figures right, and declared: "My country is the biggest payer, and I want an agreement."
Ms Merkel arrived almost as unknown as she was powerful. As leader of Europe's largest country, its biggest economy and its biggest paymaster, the German Chancellor could hardly fail to play a dominant role, but how she played it would be critical. A senior EU official said: "All eyes were on her."
Much to Mr Blair's delight, and French President Jacques Chirac's dismay, she abandoned the tactics of her predecessor, Gerhard Schroeder. Rather than considering the Franco-German axis as the paramount motor of Europe, she acted as an independent arbitrator. "What normally happens at these summits is that Chirac and Schroeder stitch it all up beforehand," one official said.
"Merkel has been two things -- she has been constructive and she has not been Schroeder." At dinner on Thursday, she rebuked the other leaders for spending so much time arguing over comparatively small amounts of money -- E20 billion ($32 billion) spread across 25 countries over seven years.
Ms Merkel spoke of the need for a European program to improve the quality of mathematics teaching so the leaders got their figures right, and declared: "My country is the biggest payer, and I want an agreement."
Angela Merkel, Germany's new chancellor, emerged into the chilly night air of Brussels shortly after 3am on Saturday hailed by politicians and international media as the key figure in reaching a deal on the European Union budget. Ms Merkel, dubbed "Miss Europe" by the German tabloid Bild am Sonntag, combined pragmatism, persuasion and toughness during the two days of talks. "Angela Merkel impresses Europe" was the front page headline in the upmarket Frankfurter AllgemeineSonntagszeitung, which argued that the chancellor had gained significant influence that could now be deployed to address some of the other political problems facing the EU. Like Gerhard Schröder, her predecessor, Ms Merkel worked alongside President Jacques Chirac of France in seeking a deal. Unlike the Schröder-Chirac double act, she did not alienate Britain and Poland in the process. British officials say a deal "would have been impossible" had Mr Schröder been at the summit, arguing that he used to encourage Mr Chirac to go on "an anti-British rampage". They say Ms Merkel helped to broker a Franco-British agreement over a final €10.5bn (£7bn) cut to the UK rebate. "Merkel told Chirac to drop his demands for the total to be €14bn," claimed one British official. Ms Merkel refused to bow to Mr Chirac in his summit quest to win EU permission to cut value added tax in French restaurants from 19.6 per cent to 5.5 per cent, a pledge in his 2002 election campaign. "Chirac deployed all his charm," recounts one German official. "But she explained she couldn't raise VAT at home while approving VAT cuts in other countries at an EU summit."
Ms Merkel, dubbed "Miss Europe" by the German tabloid Bild am Sonntag, combined pragmatism, persuasion and toughness during the two days of talks.
"Angela Merkel impresses Europe" was the front page headline in the upmarket Frankfurter AllgemeineSonntagszeitung, which argued that the chancellor had gained significant influence that could now be deployed to address some of the other political problems facing the EU.
Like Gerhard Schröder, her predecessor, Ms Merkel worked alongside President Jacques Chirac of France in seeking a deal. Unlike the Schröder-Chirac double act, she did not alienate Britain and Poland in the process. British officials say a deal "would have been impossible" had Mr Schröder been at the summit, arguing that he used to encourage Mr Chirac to go on "an anti-British rampage".
They say Ms Merkel helped to broker a Franco-British agreement over a final €10.5bn (£7bn) cut to the UK rebate.
"Merkel told Chirac to drop his demands for the total to be €14bn," claimed one British official.
Ms Merkel refused to bow to Mr Chirac in his summit quest to win EU permission to cut value added tax in French restaurants from 19.6 per cent to 5.5 per cent, a pledge in his 2002 election campaign.
"Chirac deployed all his charm," recounts one German official. "But she explained she couldn't raise VAT at home while approving VAT cuts in other countries at an EU summit."
BRUSSELS (Reuters) - A deal on the European Union's long-term budget has drawn a line under an "annus horribilis" of political setbacks but it may take a generation change in leaders before the 25-nation bloc finds new momentum. Saturday's middle-of-the-night compromise on the 2007-13 budget averted a deeper crisis after a grim year marked by the rejection of the EU's constitution by French and Dutch voters, economic stagnation in western Europe, conflicts over trade and finances, and personal recrimination among EU leaders. But it left unresolved the disputes on which Europe clashed in 2005: "deepening" of European integration versus "widening" to still more members; liberalizing economic reforms versus social and trade protection; investing EU funds in research and development or in agriculture. "The EU crisis has not yet been overcome with this summit," European Industry Commissioner Guenter Verheugen told Germany's Bild am Sonntag newspaper. "The Austrian presidency must provide an answer to the big questions. That includes in particular: how many members can the EU cope with?" he said. Austria takes over the EU chair from Britain for six months on January 1. While it will not inherit the budget impasse that diplomats in Vienna had feared most, it faces a daunting task conducting a promised debate on the future of the EU's creaking institutions and the scope of future enlargement. The EU must also tackle an unresolved battle over how far to open up cross-border competition in the services sector, which the European Commission sees as key to boosting economic growth.
Saturday's middle-of-the-night compromise on the 2007-13 budget averted a deeper crisis after a grim year marked by the rejection of the EU's constitution by French and Dutch voters, economic stagnation in western Europe, conflicts over trade and finances, and personal recrimination among EU leaders.
But it left unresolved the disputes on which Europe clashed in 2005: "deepening" of European integration versus "widening" to still more members; liberalizing economic reforms versus social and trade protection; investing EU funds in research and development or in agriculture.
"The EU crisis has not yet been overcome with this summit," European Industry Commissioner Guenter Verheugen told Germany's Bild am Sonntag newspaper. "The Austrian presidency must provide an answer to the big questions. That includes in particular: how many members can the EU cope with?" he said. Austria takes over the EU chair from Britain for six months on January 1.
While it will not inherit the budget impasse that diplomats in Vienna had feared most, it faces a daunting task conducting a promised debate on the future of the EU's creaking institutions and the scope of future enlargement.
The EU must also tackle an unresolved battle over how far to open up cross-border competition in the services sector, which the European Commission sees as key to boosting economic growth.
Weekend newspapers in Europe express some relief at the EU budget deal, but the overall response is broadly unenthusiastic. French newspapers highlight the British "concessions" which they believe enabled leaders to reach an agreement. "The European leaders wrung out a crucial agreement... thanks to the concessions made by British Prime Minister Tony Blair, notably on his country's rebate," Le Monde says. In similar vein, Liberation believes that the "last-minute agreement" was achieved "thanks to concessions by British Prime Minister Tony Blair". Another paper, Le Nouvel Observateur, takes a broader view and expresses relief at the outcome. "This agreement on the first budget of the enlargement - delivered through a painful labour - makes it possible to break the deadlock in which the EU had found itself since the French and Dutch "No" to the Constitution and the failure of the June summit on the budget," it says.
French newspapers highlight the British "concessions" which they believe enabled leaders to reach an agreement.
"The European leaders wrung out a crucial agreement... thanks to the concessions made by British Prime Minister Tony Blair, notably on his country's rebate," Le Monde says.
In similar vein, Liberation believes that the "last-minute agreement" was achieved "thanks to concessions by British Prime Minister Tony Blair".
Another paper, Le Nouvel Observateur, takes a broader view and expresses relief at the outcome. "This agreement on the first budget of the enlargement - delivered through a painful labour - makes it possible to break the deadlock in which the EU had found itself since the French and Dutch "No" to the Constitution and the failure of the June summit on the budget," it says.
The epithet most usually added to the name of Wolfgang Schüssel is "wily", reflecting the Austrian chancellor's skills as a tactician and negotiator after 37 years in politics, the past 15 as a minister and five as his country's leader. But even at 60, Mr Schüssel, responsible for economics and foreign policy before becoming chancellor in 2000, will need every grain of his political judgment to steer the European Union during next year's Austrian presidency. Leader of the centre-right People's party, the bespectacled Mr Schüssel has direct experience of the ups and downs of European politics. In 2000, he faced EU-wide opprobrium after forming a coalition with the ultra rightwing Freedom party. Joining forces with Jörg Haider, the driving force of the Freedom party - and well known for his positive comments about the Nazis - led to a period of virtual diplomatic isolation for Austria. Domestically, the tactic paid off in introducing fresh policies after decades of stifling "grand coalitions" between the People's party and the Social Democrats, Austria's two dominant political groupings. And, as Mr Schüssel probably suspected, Mr Haider's influence waned rapidly as his party descended into internal quarrels and divisions. Although the days of Austria's exclusion are long over, the hostility of many EU leaders and commentators has left its mark on the urbane Mr Schüssel. His once characteristic bow ties, for example, were discarded after a cartoonist combined the distinctive neckwear with the design of a "no entry" traffic sign as a simple, starkly effective depiction of Austria's diplomatic isolation
But even at 60, Mr Schüssel, responsible for economics and foreign policy before becoming chancellor in 2000, will need every grain of his political judgment to steer the European Union during next year's Austrian presidency.
Leader of the centre-right People's party, the bespectacled Mr Schüssel has direct experience of the ups and downs of European politics. In 2000, he faced EU-wide opprobrium after forming a coalition with the ultra rightwing Freedom party. Joining forces with Jörg Haider, the driving force of the Freedom party - and well known for his positive comments about the Nazis - led to a period of virtual diplomatic isolation for Austria.
Domestically, the tactic paid off in introducing fresh policies after decades of stifling "grand coalitions" between the People's party and the Social Democrats, Austria's two dominant political groupings. And, as Mr Schüssel probably suspected, Mr Haider's influence waned rapidly as his party descended into internal quarrels and divisions.
Although the days of Austria's exclusion are long over, the hostility of many EU leaders and commentators has left its mark on the urbane Mr Schüssel. His once characteristic bow ties, for example, were discarded after a cartoonist combined the distinctive neckwear with the design of a "no entry" traffic sign as a simple, starkly effective depiction of Austria's diplomatic isolation
Like Gerhard Schröder, her predecessor, Ms Merkel worked alongside President Jacques Chirac of France in seeking a deal.
Here:
Much to Mr Blair's delight, and French President Jacques Chirac's dismay, she abandoned the tactics of her predecessor, Gerhard Schroeder. Rather than considering the Franco-German axis as the paramount motor of Europe, she acted as an independent arbitrator.
The FT, as usual, is closer to the truth, but the Murdoch press will always be on the lookout for any sign that allows them to say that France and Germany are split. In the long run, we're all dead. John Maynard Keynes
