EU Reform Treaty: compromising over a compromise

As I write this article European Union leaders are still meeting in Brussels to discuss the EU Reform Treaty - the new name given to the now defunct Constitutional Treaty, which was rejected by French and Dutch voters two years ago. It is possible that a compromise will be reached, after a lot of hard bargaining, but failure cannot be excluded. It all depends on just how flexible certain EU leaders are willing to be.

The main scope of the treaty is to help the EU work more effectively. I always believed that the overall thrust of the Constitutional Treaty was a positive one but that it was marketed badly. It contained too many unnecessary details and should never have been called a "constitution" because such a word worries those who believe in a Europe of nation states.

Although 22 EU member states were satisfied with the original Constitutional Treaty - 16 of which have ratified it - the five other countries wanted changes, some of them substantial. Considering that both France and The Netherlands had rejected the treaty in popular referenda - effectively killing it - modifications had to be made when the new draft treaty was being drawn up by the German presidency.

Furthermore, Poland objected to the new "double majority" Qualified Majority Voting system - 55 per cent of EU member states plus 65 per cent of the EU population - which it said penalised Poland and gave an unfair advantage to Germany, and it was supported by the Czech Republic, and Britain wanted some of the powers transferred to Brussels in the original treaty to be scrapped.

A draft presented by the German presidency just before the summit began made several concessions to EU member states opposed to key parts of the failed constitution, but not to Poland over the issue of voting rights. However, the summit was meant to issue a mandate for an intergovernmental conference to agree the precise wording of the new treaty in the autumn, under the Portuguese presidency, and it is possible that Poland will take its fight over voting rights to this IGC.

The key compromises in the new draft treaty include the scrapping of the word "Constitution", the replacement of the proposed EU "Foreign Minister" with another name, the exclusion of any reference to EU law having supremacy over national law, no increased role for the European Parliament and the European Court of Justice over the EU's Common Foreign and Security Policy, and an opt-out will be allowed for those countries not willing to accept further integration in justice and homes affairs.

Furthermore, there are no references to symbols such as the European flag and anthem. These are all compromises mainly addressed at Britain and, to a certain extent, The Netherlands.

However, Britain also opposed making the EU's Charter of Fundamental Rights legally binding, something Germany was keen on. The UK was worried that this could allow the European Court of Justice to make decisions that would change British labour law. One possible compromise is either to allow Britain to opt out or to include the charter in the annex of the treaty.

In addition, The Netherlands wanted a "red card", which would force the European Commission to withdraw a proposed law if a majority of national parliaments objected to it. However, the German draft treaty proposed that national parliaments would have a greater say in EU legislation by having the right to ask the European Commission to redraft legislation, something which The Netherlands seemed likely to be satisfied with. The Dutch also wanted the Copenhagen criteria - the EU's membership rules - to be enshrined in the new treaty, thus making future enlargements a bit more difficult. However, this is unlikely to be agreed to.

As for the French, President Nicolas Sarkozy has always maintained that he wanted a slimmed-down 'mini-treaty' and the latest German proposals were more or less acceptable to him. However, during the summit a reference to "free and undistorted competition" was pulled from the draft after French pressure and instead the treaty refers to "social cohesion" and "full employment". This will probably allow EU states a higher level of state aid to industry, something the French electorate, which voted against the treaty in 2005, should warm to.

Of course, certain crucial parts of the original treaty will remain intact, such as the creation of a President of the EU for a two-and-a-half-year period instead of the six-month country rotating presidency, a new voting system (unless the Poles get their way), the setting up of an EU diplomatic service, more Qualified Majority Voting and less vetoes, and a smaller European Commission consisting of 18 Commissioners.

Furthermore, the changes to the number of MEPs as envisaged in the original treaty - the minimum number of seats for small countries increased to six (good for Malta) and the maximum limit for big states at 96 - will also remain in place.

The Constitutional Treaty was not perfect and this new Reform Treaty will not be perfect either. However, Europe is all about compromises, and this slimmed-down treaty is a compromise over a compromise (the Constitutional Treaty).

I very much hope that an agreement is reached and that institutional reform is taken off the EU agenda for quite a while, so that Europe can concentrate on other very important issues and challenges that it faces, such as enlargement (especially Turkey), economic reform, budget reform and climate change.

I do not exclude the possibility of failure at the summit, which won't mean the end of the world, but it will mean spending more time on institutional reform at the expense of many more crucial issues, something Europe really can't afford.