Blair Under Fire as EU Presidency Looms

The stormy EU summit over the bloc's budget over the weekend which collapsed in acrimony appeared to have left a bitter aftertaste on Tuesday as German Chancellor Gerhard Schröder launched a frontal attack on Britain's vision of Europe and its economic model.

Without specifically naming British Prime Minister Tony Blair, Schröder said that the continent's welfare state and its "values" were under threat in the wake of the failed budget negotiations in Brussels and the troubled bid to ratify the first-ever EU constitution.

"There is a special European social model to protect that has developed on the continent," said Schröder, who will likely be facing early elections in September. "Through the integration of Europe, the common market and later the common currency, we have been able to overcome the forms of nationalism that brought our continent so much suffering," he said.

"Those who want to destroy this model due to national egotism or populist motives do a terrible disservice to the desires and rights of the next generation."

"Leveling Europe to a pure market"

Schröder, who was speaking at a book presentation in Berlin, said Europe was faced with an identity crisis that went far deeper than differences over financing or the constitution.

"At its heart, it is about the question, which Europe do we want?" he said. "Do we want a single Europe that it able to take action, a true political union as is foreseen in the constitution? Or do we want a big free-trade union, do we want to go from the European Union back to the European Economic Community?"

He said there was no doubt Europe needed a political union and warned against "leveling (Europe) down to a pure market."

Over the weekend in Brussels, Schröder blamed the "inflexible" stance of Blair for the breakdown of EU budget negotiations for 2007 - 2013, saying Blair's steadfast refusal to back down on Britain's long-cherished EU rebate worth around 4.6 billion euros yearly killed any possible deal.

Since then other European leaders such as Luxembourg Prime Minister Jean-Claude Juncker, who holds the rotating EU presidency, have joined the chorus in accusing Blair of trying to reduce the bloc to little more than a free-trade zone.

Britain takes on EU presidency amid crisis

Blair has dug in his heels and refused to give up the controversial rebate until EU leaders decide to overhaul and reform farm subsidies which swallow some 40 percent of the EU budget.

On Monday, Blair reiterated his stance during a speech to the House of Commons in London, saying: "It was not the right concept for Great Britain and it was not the right concept for Europe."

The acrimony comes at a time when Blair is preparing to take over the six-month rotating EU presidency on July 1 and is expected to pour oil on troubled waters. Blair, who is due to deliver a speech to the European parliament on Thursday about his vision for Europe and his plans for the next six months, said Tuesday he thought a deal could be reached this time.

"We see our role in presidency in part as also trying to launch that debate, and do it in a constructive way, do it in a way that's open to the views of others and tries to get some form of consensus as to how we move forward," Blair said.

British pragmatism but no deal on budget

But experts remain skeptical.

Janis Emmanouilidis, expert on the EU at the Center for Applied Policy Research in Munich said it was doubtful that a deal on EU finances could be reached during Blair's presidency.

Emmanouilidis said the row over money had exposed two diametrically opposite political directions within the bloc: While Schröder, Chirac and Juncker see the EU as a visionary social model and not just as a politically enriched trade zone, Blair was treading in the neoliberal footsteps of former British Prime Minister Margaret Thatcher.

"But Blair won't initiate this debate during his term because he knows that such theoretical discussions don't strike a chord among citizens," he said.

The EU expert added that Blair instead would focus on "British pragmatism" during his term as EU president or in other words the liberalism versus protectionism debates. Emmanouilidis added that given Britain's healthy economy, Blair naturally had the better arguments.

The EU expert concluded that Blair's presidency would be marked, not so much by concrete things, but rather by lots of discussions. "But controversial debates are also urgently needed," Emmanouildis said. "It's about economic orientation and the prospects that Europe needs to be able to function in the long term."