Summit summaries

The European Union leaders’ summit has wrapped up in Brussels, and judging by the coverage it seems to have been a rather underwhelming affair. The FT’s Brussels Blog called it a “Ho-hum” affair. Yet there were two interesting developments from the summit, one involving French President Nicolas Sarkozy’s plan for a ‘Mediterranean Union’ and the other involving Gordon Brown’s frank words over the coming economic crisis.

Sarkozy played up the Mediterranean Union discussions as a triumph for France, but the reality is the original proposed plan by France has been so watered down by the other EU nations that it’s almost unrecognizable. Germany has been illogically insisting that it be given membership to such a union even though it has no Mediterranean coast, and they seem to have gotten their way even though Sarkozy has vociferously opposed it. The whole concept has been a continuing source of hostility between the two nations, with both distrusting the motivations of the other. The Germans have objected to a Meditteranean coast-exclusive group because they fear it would break up the EU.

Two reelections expose one deep divide

News came this morning of two big election results in Europe, both won by the slimmest of margins and both reflecting the increasingly polarized nature of their societies.

In the first, Malta’s ruling Nationalist party won the weekend’s general election by the slimmest margin in the Mediterranean state’s 40 year history. The nationalists beat the opposition Labour party by just 1,500 vores - .5 percent of all the votes cast!

The election was seen in some ways as being a referendum on the tiny island nation’s membership in the EU, which it joined in 2004. Prime Minister Lawrence Gonzi ran largely on an economic platform emphasizing pro-EU policies. The Nationalist party has governed the nation for most of its history since it declared independence from the UK 1964, with only a few brief periods of Labour control.

A new Europe strategy for Labour?

Well it’s official, the UK has ratified the Lisbon treaty. Brussels can breathe a big sigh of relief. It was a fiery scene in the commons yesterday as they debated the ratification. Tory leader David Cameron was doing his best to sufficiently rattle his saber to appease the tabloid press.

But Cameron’s predictable bravado was hardly the most interesting thing about the proceedings. Rather it was the behavior of the other two party leaders, Labour’s Gordon Brown and the Liberal Democrats’ Nick Clegg.

As The Times’ Peter Riddell pointed out in his column today, Gordon Brown seems to have finally “seen the light” when it comes to Europe. That, or he’s adopted a fundamental (and perhaps politically necessary) shift in strategy on how to deal with the European question. During the commons debate yesterday Brown was passionate and unequivocal in not only his defense of the treaty but in the wider benefit of membership in the EU. At a time when few politicians have had the courage to present the case for Europe to the British public, Brown seems to have suddenly shifted his tone. Having always been reticent to talk about Europe before, he suddenly was emphasizing the need for Britain to take a leading role in the union in order to achieve prosperity in security in a globalised world.

Tax cheat focus continues

Following recent moves by Germany to force Liechtenstein to crack down on tax cheats, the European Union is going a step further, effectively declaring battle today with Liechtenstein, Monaco, Andorra and Switzerland in their ‘war on super-rich tax cheats.’

The EU's council of economics and finance ministers, or Ecofin, is meeting in Brussels today to hammer out a strategy to force Europe’s tax havens into submission. They plan to do so by strengthening the EU’s 2005 savings tax directive, through which the ‘tax haven nations’ have easily been able to find loopholes.

What they’re going after is the increasingly common practice of very wealthy citizens of European countries domiciling themselves in small nations outside the EU with loose tax laws. Germany has recently gone hard after the practice, led by finance minister Peer Steinbruck, who says the tax cheats cost Germany approximately €30 billion in lost revenue.

Liechtenstein licked?

An interesting story is developing over Switzerland's impending entry into a border-free Europe. It looks like its tiny neighbor Liechtenstein may see its status as a tax haven challenged as a result of the change.

Switzerland is not part of the European Union, but the treaty which has dismantled the internal borders of continental Europe actually has nothing to do with the EU. It is a separate treaty called the Schengen Treaty (named after the town in which it was signed) and membership in the so-called "Schengen Zone" is separate from membership in the EU.

Switzerland is set to enter the zone in November, so after then there will be two large non-EU nations in the zone (Switzerland and Norway) and two large EU nations not in the zone (the UK and Ireland). There will also be no border between Switzerland and its neighbors. Good thing my brother and I got this picture at the France-Switzerland-Germany border while we could!

Hong Kong

I'm back in London now and slowly getting over my jet lag. Overall my Hong Kong trip went very well, both for my work activities and for my leisure time.

Though I was nervous about it, my on-stage interviews at that conference went fine. I was fortunate enough to have a fairly engaging and outspoken guy as my interviewee, so he was able to keep the conversation lively and engaging. The panel I moderated about frontier markets also went well, though it was hard to link the disparate geographic regions we were discussing into larger themes. But I got good feedback from the audience afterwards.