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DE RUEHBS #2001/01 1691512
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P 181512Z JUN 07
FM USEU BRUSSELS
TO RUEHC/SECSTATE WASHDC PRIORITY
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUCNDT/USMISSION USUN NEW YORK PRIORITY

UNCLAS SECTION 01 OF 04 BRUSSELS 002001 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL EUN PGOV PHUM ECIN PBTS
SUBJECT: A NEW EU TREATY?: WHAT IT MEANS FOR US 
 
¶1. (SBU) Summary.  Given barely even odds six months ago, an 
agreement on institutional reform at the June 21-22 European 
summit has reached the realm of probability, with a strong 
Polish objection on voting weights as the most serious 
obstacle to agreement.  The pressure to reach a deal is 
enormous for the substantial majority of member state 
governments who want to continue further integration.  A 
failure to reach agreement will not "bring the EU down". The 
union has, after all, continued to function without reforms 
since the rejection of the constitutional treaty by voters in 
France and the Netherlands in 2005.  The real problem is that 
a second highly visible failure to reform the institutions 
will land the Union in another, extended political funk.  It 
is important to note, however, that a few member state 
governments may privately greet such a failure (and the 
resulting slow-down in EU consolidation) with a sense of 
relief. 
 
¶2. (SBU) The good news for the EU is that there is a large 
majority aligned on most of the key issues.  The outlines are 
now clear of a "simplified" treaty, shorn of the 
constitutional title but which nevertheless manages to 
incorporate almost all the original treaty's key elements. 
The joker in the deck, however, is that "most countries" is 
not good enough - all 27 must line up this week, leverage 
that the Poles in particular are eager to exploit. 
 
¶3. (SBU) For the in-coming Portuguese presidency, the 
nightmare scenario is that the leaders, caught between Polish 
intransigence and an intense desire to get a deal, will 
settle for a nicely-packaged, but "false", consensus - one 
that kicks crucial political disputes into the 
inter-governmental conference (IGC) that will be charged with 
wrapping up the package by Christmas.  The Portuguese have 
already hinted that they would refuse to open the IGC if they 
think this week's agreement is too thin.  Nevertheless, our 
gut sense is that a weak deal is precisely the most probable 
scenario. 
 
¶4. (U)  This message will spell out the key issues being 
debated, their implications for EU decision-making and for 
U.S. policy interests, and (where we dare) a USEU prediction 
for the bookies.  In the end, "success" will indeed be 
avoiding another round of extended self-reflection that could 
distract EU attention from working on the global issues that 
we, and they, need to address.  End Summary. 
 
Key Issues 
---------- 
 
¶5. (SBU) Issue:  Voting representation in (most) EU 
decision-making 
 
What's at stake:  power, prestige, and sovereignty.  Although 
EU decision-making is consensual by tradition, member state 
voting weights on "first pillar" (mainly economic 
legislation) are loosely based on national population and 
size of economy.  However, the 1999 Nice treaty deal gave 
Poland and Spain far more weight than their due, and Germany 
far less.  The proposed new voting system would create a 
"double majority" voting system (55% of member states plus 
65% of the total EU population).  Although the last Polish 
government signed off on this reform in the Constitution 
draft, the present government has reneged and turned it into 
a red-line issue.  The usual EU approach to recalcitrants is 
to buy them off, but our contacts admit that there are only 
limited options here.  At best, sweeteners to the Poles could 
include a stronger provision allowing a minority of states to 
delay Council decisions; giving the Poles more weight in the 
Commission or the European Parliament; or adding a clause on 
EU energy solidarity. 
 
USEU prediction:  This is a deal-breaker question. With the 
stakes so high, pressure will be intense on Poland to fold. 
More likely, however, our contacts think that the Poles will 
force the question into further study, before or within the 
IGC. 
 
Implications for the U.S.: The proposed change in the voting 
system would require an adjustment in our EU lobbying 
tactics, with Poland and Spain the biggest losers and Germany 
the clear winner. 
 
¶6. (SBU) Issue: EU Charter of Fundamental Rights 
 
What's at stake:  incorporating the charter of fundamental 
rights into EU law could mean more rigid EU limitations 
regarding workers' rights.  A red-line for the UK, this is 
the second-most contentious political issue and the leaders 
will not want to kick it down to the IGC.  It is already a 
given that it will no longer be in the treaties themselves, 
 
BRUSSELS 00002001  002 OF 004 
 
 
but only referred to as an annex.  The fight will be over how 
much legal value it is given. 
 
USEU prediction:  This will be largely a fight between the UK 
and the Latin member states, with the others in various 
stances in the middle.  Well-placed Commission contacts 
predict they will end up with an ugly opt-out or a 
non-binding article in the treaty. 
 
Implications for the U.S.: in some ways this is as much about 
political symbolism as its legal impact.  The ECJ has already 
incorporated most of the rights and principles contained in 
the Charter as sources of law when applying "General 
Principles of Community Law" in its decisions, meaning this 
change would not greatly alter the status quo. 
 
¶7. (SBU) Issue: Justice and Home Affairs (JHA) decision-making 
 
What's at stake:  the member state veto over justice and home 
affairs cooperation.  This is one of the few truly 
substantive changes, as compared to the rest which focus 
mostly on process.  The proposed change would move JHA issues 
out of their protective cover of required unanimity. 
Instead, sensitive judicial and law enforcement issues would 
become subject to majority decision-making as well as the 
involvement of the European Parliament and European Court of 
Justice. 
 
USEU prediction: The proposal is likely to go ahead, but with 
a provision permitting a limited period of further discussion 
and, ultimately, an opt-out if any member state disagrees 
with the eventual majority decision.  The UK and Ireland 
reportedly want such a provision to protect their legal 
systems, which differ from those in much of continental 
Europe. 
 
Implications for U.S.-EU relations:  would facilitate EU 
decision making on judicial and police cooperation.  However, 
the additional powers of the European Parliament -- often 
less like-minded with the U.S. than other EU institutions on 
JHA issues -- could move EU policy in a direction we don't 
like. 
 
¶8. (SBU) Issue:  creation of an EU "Foreign Minister" 
 
What's at stake:  boosting the EU's global role, 
effectiveness, and profile. The EU FM post will combine the 
existing policy functions of CFSP High Rep (Solana) with the 
role, budget, staff, and programs of RELEX Commissioner 
(Ferrero-Waldner).  He/she would also control the new EU 
diplomatic service that will create for the first time a 
3500-strong professional EU diplomatic corps (the majority of 
whom will be seconded from national services).  In theory, 
this would create synergies, since the Council's foreign 
policy apparatus today has no ability to tell the Commission 
how to spend its development and foreign cooperation budget. 
The new EU FM would play a substantially bigger role in 
conducting CFSP/ESDP and take over external representation 
duties from the current rotating Presidency. 
 
USEU prediction:  the job will be created, as most member 
states agree to the double-hatting concept, but the name 
"foreign minister" will not survive - because the Brits, 
Dutch, and Czechs say it sounds too much like a national 
government position. 
 
Implications for U.S.-EU relations:  The new EU FM would be a 
substantial personality.  Not only would he chair the Foreign 
Affairs Council, but more importantly, his control over the 
combined Council/Commission bureaucracy would give him 
enormous ability to shape the foreign policy agenda and to 
bring resources directly to bear on foreign policy issues. 
However, there is potential for confusion over lines of 
authority, as the Foreign Minister will report to the 
Commission President but derive his powers from the Council. 
In the long run - assuming the personalities mesh well - it 
should increase coherence of EU foreign and security policy, 
since the policymaker will also control the purse strings. 
 
¶9. (SBU) Issue:  EU permanent President of the European 
Council 
 
What's at stake:  Surprisingly little.  The EU would still 
maintain rotating presidencies by member states for the 
specialized Council meetings, but the new permanent President 
would ensure top-level coordination and continuity in the 
EU's work (compared to the current six-month change).  The 
term would be for two and a half years, renewable once. 
 
USEU prediction: This proposal seems to inspire neither much 
enthusiasm nor opposition.  Not as controversial as EU 
 
BRUSSELS 00002001  003 OF 004 
 
 
"foreign minister" so will probbly happen. 
 
Implications for U.S.-EU relations:  The new President will 
represent the Union at the Heads of State/Government level on 
common foreign policy (CFSP) issues.  However, this could 
create confusion as well as a potential turf battle with the 
Commission President Barroso. 
 
¶10. (U) Issue:  Reducing the number of Commissioners 
 
What's at stake:  trimmingthe Commission in 2014 to nominees 
of two-thirds of member states chosen by equal rotation 
(currently, one Commissioner per country).  Also up for 
discussion is a French proposal: should the EP select the 
Commissioners? 
 
USEU prediction:  This may be an area that could be traded 
off to the Poles in exchange for Warsaw's cooperation 
elsewhere. 
 
¶11. (SBU) Issue:  Additional co-decision rights for European 
Parliament(EP) 
 
What's at stake:  Power gain for the EP.  A "tearing down" of 
the pillar system would increase the number of areas where 
decisions are made jointly with the EP from 50% of EU 
legislation to 95%.  The EP also stands to gain even more 
power over the EU budget. (Nevertheless, the EP's role in 
CFSP will remain limited.) 
 
USEU prediction:  Although there remains opposition to 
completely tearing down the pillar system, under any scenario 
except a complete failure to agree on any reforms, it looks 
like the EP will win big. 
 
Implications for U.S.-EU relations:  A power gain by the EP 
would lead us to increase our lobbying efforts there. 
Left-center MEPs have shown a knack for using the Parliament 
as a public forum for criticizing the United States. 
Nevertheless, there are a number of Members (including the 
bulk of the EP's largest, center-right, party) who are 
favorable to our positions on many issues. 
 
¶12. (U) Issue: giving national parliaments a voice in EU 
decisions 
 
What's at stake:  the Dutch are pressing for national 
parliaments to have the right to send warnings to the EU 
institutions if they think the EU is acting beyond its 
competencies.  A tougher version would give the national 
parliaments the ability to actually force the Commission to 
propose laws in specific areas or even veto EU legislation. 
 
USEU prediction:  Increasing national parliaments' powers 
will be a sweetener for the Netherlands and UK, who need to 
show their constituents that this reform is really different 
from the constitution.  Some version of this (though likely 
the weaker one) will make it in. 
 
Implications for the U.S.:  This could mean broadening our 
lobbying efforts on EU issues to more consciously include 
member state parliaments as well. 
 
¶13. (SBU) Issue:  The future of the Common Foreign and 
Security Policy (CFSP) 
 
What's at stake:  Unlike pillar one issues, decision-making 
on foreign and security policy (CFSP) has always been 
consensus-based, on the basis that foreign policy is a member 
state rather than a joint community prerogative.  Although 
the voting process won't change under the reform proposals, 
the ideological foundation just might:  the reforms would 
move CFSP out of its current isolation and unite it with all 
"policy" decision-making in the "Treaty of the Community". 
Potentially, this would set the stage for a later shift to 
majority voting on CFSP issues and is seen by proponents as 
giving a strong political boost to the common foreign policy. 
 
 
USEU prediction:  Not a done deal, as national governments 
will be loath to give up any control of CFSP.  Likely to be 
strong pushback from some member states. 
 
Implications for the U.S.:  Tough to assess.  Member states 
are already using Brussels as a platform to coordinate 
foreign policy -- this shift will likely merely formalize 
that.  The important point here is that it is not enough to 
focus on the EU-3 or the big five.  Minority member states 
can help block a policy we don't like (or vice versa). 
 
¶14. (SBU) Issue: single legal personality 
 
BRUSSELS 00002001  004 OF 004 
 
 
 
What's at stake:  how the EU is represented in international 
organizations. 
 
Implications for U.S.-EU relations:  The "additionality" 
question.  By conferring on the Union an explicit legal 
personality that would absorb that of the European Community, 
a new treaty would make the EU a fully recognized subject of 
international law.  This may enhance transparency and 
efficiency.  More importantly it will certainly be used by 
the EU institutions -- if not necessarily the member states 
-- to push for additional EU representation in international 
organizations. 
 
¶15. (U) Issue:  symbols of the constitutional treaty 
(European flag, anthem, the word "constitution") 
 
What's at stake:  nothing of substance, but for the true 
believers in a future federal Europe, the symbols were an 
essential signpost of Europe's ambitions. 
 
USEU prediction:  EU Foreign Ministers already agreed June 17 
to drop the term "constitution" as well as the flag and 
anthem from the text of any new treaty. 
 
The Road Ahead 
-------------- 
 
¶16. (SBU) Comment:  While nobody thinks member states can 
reach decisions on all of these issues at the June 21-22 
European Council, insiders hope that the key political 
choices will be made, with only four or five of the 
less-contentious issues left to be resolved by a largely 
"technical" IGC.  Senior Portuguese reps here seemed to be 
thinking in these terms when they told us that they did not 
expect the IGC to "monopolize" their time.  If this scenario 
holds, the Portuguese could formally open the IGC at the July 
24 General Affairs Council, table "summer reading" documents 
there, begin substantive work in September, and conclude by 
Christmas.  Scenario two (a deal full of hedges and holes) 
would certainly disrupt this optimistic timeframe.  Scenario 
three (no deal) is a nightmare no one here wishes to 
contemplate (though all agree that it will not stop the EU 
machinery from functioning). 
 
After the IGC: avoiding the referendum trap 
------------------------------------------- 
 
¶17. (SBU) The member states have carefully limited the 
present agreement's exposure to public referendum by deciding 
that these reforms will only be "amendments" to the existing 
treaties, rather than new ones (as were the treaties of Nice 
and Amsterdam).  Nevertheless, the EU and member state 
governments will still have to sell any changes to the 
European public  -- partially in order to avoid further calls 
for public referenda.  A Financial Times/Harris Poll 
published June 18 showed the majority of Spaniards, Germans, 
Brits, Italians, and French "consider the post-constitution 
treaty important enough to warrant a referendum".  Gordon 
Brown in particular may come under pressure from British 
conservatives to call for a referendum.  Our contacts say 
that the leaders will want to focus their public message on 
the EU's ability to deliver more and better services. 
Specific areas they will cite for "increased delivery" are 
climate change/energy, judicial and law enforcement, and 
external relations.  End Comment. 
GRAY 
.