TUC leadership under fire over support for Constitution
Bulletin 21: 5 April 2005
TUC leadership under fire over support for Constitution
Big unions sound sceptical note
EU fraud still rampant say MPs
Extent of fraud impossible to discover
‘No’ campaign maintains small lead in France
Chirac panicking over rebellion
1. TUC leadership under fire over support for
The Trades Union Congress held a one-day conference this week to
discuss the EU Constitution. However, before the conference even
started there was controversy after some unions “accused the TUC
of trying to engineer support for the treaty” by only inviting supporters
of the Constitution to speak (Times, 4 April 2005). In his speech
to the Conference John Monks, General Secretary of the ETUC, argued
that the Government is wrong to claim that the Charter of Fundamental
Rights won’t affect UK law, while former EU Commissioner Neil Kinnock
insisted, “The Constitution gives no new powers to the Commission”.
Centre for a Social Europe chair Ian Davidson MP was eventually
invited to outline the case against the Constitution. In his speech,
he said, “We want the European Union to work, but it will not work
if more and more powers are centralised in Brussels”.
The conference, and the controversy that preceded it, gave indications
that key trade unions may decide not to back the Government’s ‘yes’
campaign, as they are currently expected to. Some large unions may
even move to back a ‘no’ vote. A spokesman for the Transport and
General Workers Union told the Guardian, “Tony Woodley has become
increasingly unhappy with the low position to which the EU constitution
has relegated employment and workers’ rights” (Guardian, 4 April
2005). Paul Kenny, the new acting General Secretary of the pro-euro
GMB, told the Times, “The TUC is trying to force unions down a particular
line. But we are not going to be bounced into supporting the constitution.
There is a level of scepticism in the GMB” (Times, 4 April 2005).
Speaking at the conference, Jane Carolan, the Chair of UNISON’s
policy committee, said, “The [Unison] NEC will be recommending to
our conference to oppose the EU Constitution and campaign for a
‘no’ vote in a referendum. We will be taking part in a progressive
coalition against the Constitution.”
The news that Britain’s biggest trade union, UNISON, is likely
to actively campaign for a ‘no’ vote is disappointing for the Government.
Increasingly sceptical comments from traditionally more neutral
unions like the T&G;, and even from pro-euro unions like the GMB,
is a potential disaster for the ‘yes’ campaign. Trade unionists
have become increasingly disillusioned by the spin of the pro-Constitution
lobby, and increasingly frustrated by the Government’s boast that
it has “put the interests of business at the heart of our negotiating
position on the EU Constitutional Treaty”. In 1999, Tony Blair hoped
that trade union grassroots would deliver the ‘yes’ vote on the
ground, but at best he will be looking to what allies he has left
in the TUC to try and stop more unions moving into the ‘no’ camp.
2. EU fraud still rampant say MPs
A new report from the all-party Public Accounts Committee in Parliament
has said that the precise level of fraud and corruption in the EU
budget is difficult to measure given the complexities of the accounts
(Eighteenth Report of the House of Commons Committee of Public Accounts,
Session 2004-05, HC 498). In 2003, member states reported “irregularities,
including alleged fraud” to the value of €922million to sleaze watchdog
OLAF, a figure which is even higher than when it was first set up
in 1999. But as the member states are not obliged to report in a
consistent manner, or differentiate between fraud and other irregularities,
the figure may be much higher and there is no reliable way of measuring
The report concludes that “accountability and audit arrangements
of the European Union have been characterised by inertia among the
institutions. The high levels of fraud and irregularity generally
thought to exist in the European Union operations have seriously
damaged the Community’s reputation. The fact that the European Court
of Auditors has qualified the Union’s accounts for ten successive
years gives credence to this view. We believe that obtaining a positive
Statement of Assurance is hopeless without dramatic changes to the
Common Agriculture Policy and the Structural Funds to make them
simple to control, thereby avoiding the high levels of fraud and
The Committee reports that by 2003 the EU budget was €98.3billion
and the UK gross contribution was €15.2billion, emphasising the
need for better financial management and accountability. It suggested
that “the scale of [the Court of Auditors’] work is totally inadequate
given the importance of ensuring the effective use of Community
funds”, noting that “No independent review of the Court’s work has
taken place since it was set up in 1977” and that unlike the UK’s
National Audit Office, “the Court does not report on its own performance
to anyone”. They demanded that the UK Government uses the EU Presidency
to improve accountability.
For years, EU politicians have been saying that they are on the
verge of solving the European Union’s problem with fraud and waste.
But nothing seems to change – and it’s getting worse rather than
The Public Accounts Committee Report is available here.
3. ‘No’ campaign maintains small lead in France
The French ‘no’ campaign has maintained a slender lead over the
last week, as the Government launched its ‘yes’ campaign. The latest
opinion poll, carried by Ipsos for Le Figaro, shows the ‘yes’ side
on 48 percent, with the ‘no’ side on 52 percent. Ten days ago, the
‘no’ lead was 8 points, which represents a narrowing of the gap
between the two sides. The ‘yes’ campaign has stepped up its campaign,
and its rhetoric. French Justice Minister Dominique Perben said,
“We have finally obtained this ‘Europe à la Française’ that we have
awaited for so long. This constitutional treaty is an enlarged France.”
He added, “It is a Europe written in French” (Le Figaro, 4 April
2005). Pressure on voters also came as currency investors UBS suggested
that speculators would “punish the euro” if there was a ‘no’ vote
on the Constitution in France (Bloomberg, 5 April 2005).
As the referendum campaign carries on, voters in France will
be put under huge pressure to vote ‘yes’ to the EU Constitution.
Polls show that a majority of the left in France, as in Britain,
oppose the EU Constitution for its attacks on public services and
Europe’s social model. All commentators point to a close finish
in the campaign, but whether France eventually votes ‘yes’ or ‘no’,
the debate there has highlighted the potential damage that the EU
Constitution will do to public services across the EU.
4. German MEPs oppose German UN seat
A cross-party group in the European Parliament has come together
to oppose Germany’s campaign to secure a permanent seat in the UN
Security Council. The MEPs believe it would end the prospect of
the EU getting a permanent seat itself. Social Democrat Jo Leinen
MEP said, “If we have to decide between a German and a European
Union seat [on the Security Council], I am definitely in favour
of the European seat”. His Christian Democratic colleague Armin
Laschet said: “In the long term a permanent German seat would block
the perspective for a European seat” (Die Welt, 30 March 2005).
The EU Constitution develops the European Union’s role in the United
Nations. It moves the EU from a position where it “may” present
the Union’s position at the UN Security Council, to a position where
it “will”. In most cases, but not all, the EU must have a unanimous
position before the EU can speak for member states. However, during
negotiations, the Government insisted that the EU Foreign Minister
should only be allowed to “request an opportunity” to speak on our
behalf – but failed to get the text changed.
5. Eurozone economy begins to slow down
The European Commission has lowered its estimate for economic growth
for 2005 from 2 percent to 1.6 percent. EU Commissioner Joaquín
Almunia blamed this on the poor economic performance of the Eurozone
in the second half of 2004. He said, “The second half of 2004 was
a very bad period, very low growth rate, so the carryover for 2005
was not strong” (FT, 5 April 2005).
However, despite these poor economic prospects, the European Central
Bank appears to be planning to raise interest rates. Holgar Schmieding,
a senior economist with the Bank of America in London, said, “They
just seem to be itching to raise rates … They want to behave like
a normal central bank” (International Herald Tribune, 5 April 2005).
In its December meeting the ECB labelled the prospects for inflation
“worrisome”, despite the Commission’s forecast of only 1.9 percent
inflation for 2005, and a reduced level of 1.5 percent in 2006 (Newratings.com,
5 April 2005).
6. EU supports Wolfowitz for World Bank
EU Ministers have backed Paul Wolfowitz, the controversial neo-conservative
nominee for the presidency of the World Bank. Wolfowitz, who as
deputy Defence Secretary in the Bush administration was a key architect
of the Gulf War, received the support of EU Ministers following
a visit to the EU last week. The German Development Minister, Heidemarie
Wieczorek-Zeul, said that his appointment was “a new beginning”.
While Armand De Decker, Belgian Development Aid Minister said, “There
will be no objection to his candidacy” (Times, 31 March).
NGOs rejected the appointment system, which allows the US and EU
to split up the appointments to the international organisations
between them. Peter Hardstaff, Head of Policy at the World Development
Movement, said, “The fault for this truly terrifying appointment
really lies at the door of European governments who last year insisted
on retaining their right to appoint the head of the IMF rather than
adopt an open, democratic and transparent selection process” (UPI,
16 March 2005). Atila Roque, the Executive Director of ActionAid
International USA, said, “This secretive leadership selection process
is breathtakingly hypocritical” (IPS, 1 April 2005).
7. PR firm hired to spin EU Presidency
There were reports last week that the Government has hired PR group
Trimedia Communications to run a campaign to promote its forthcoming
presidency of the EU, which begins on 1 July. A source close to
the firm told PR Week that the campaign is intended to “soften up
people” to vote ‘yes’ in the referendum on the EU Constitution.
However an FCO spokesman said, “The EU presidency and Constitution
are completely separate” (PR Week, 1 April 2005). The account is
in addition to PR agency Geronimo’s existing brief to communicate
the benefits of EU membership. The Government has now admitted to
spending £1.15 million on promoting the EU Constitution, but it
is not clear that this figure represents the real total.
8. Building progressive opposition to the Constitution
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