A diplomatic victory

The year of 2005 ended very well for Portugal in the European arena. There are not many doubts left that the agreement achieved in Brussels in the early hours of the 17th December, concerning the next Financial Perspectives (2007-13), was good to our country.
The Portuguese negotiators obtained a very substantial volume of funds (22,5 billions of euros – a reduction of only 10% relatively to the previous financial framework) in a context of reduction of the communitarian budget and of enlargement of the Union (to countries which are creditors of communitarian funds and, consequently, direct rivals of Portugal on this subject). They also obtained more flexible rules for the execution of the funds, namely a plafond of 85% for communitarian participation (it used to be 80%), 3 years for the devolution of non-spent funds (it used to be 2), the inclusion of non-deductive VAT in the expenses financed by the Union, financing of the private component in public-private projects, etc.
It was, all around, a true diplomatic victory. Portugal and its “specifity” (meaning “Portugal and its problems”) had access to special rules created for new State-Members. A small detail is that the new State-Members entered in 2004 and not in 1986. And that is why this clear diplomatic victory crudely exposes the Portuguese failure, our slow transformation and convergence (that has turned into stagnation since the beginning of the 21st century). This victory solemnly declares our separation from Spain (when it comes to economic growth and development levels) and makes us put our eyes on Ireland with a mix of admiration and incredulity (though some people take note that poor Ireland, does not have any decent roads to cros the island; it is probably the same people who say that poor China, can only do simple things like t-shirts and toys.
Will the next Communitarian Framework be any different? In spite of the Government’s will, our curriculum does not seem to point to that. Portugal demonstrated that it knows how to reach very high levels when it comes to the execution of communitarian funds. However, it was not able to put them at the service of the transformation of the economic model and the country’s activities portfolio (that is, it does not associated the availability of the funds to the implementation of the reform of the Portuguese capitalist model), this results in a stagnation that drags on in time and causes, among other harms, difficulties at the level of public finances and increases in unemployment. However this failure also has good things: for example, an excellent and smiling diplomatic victory. Congratulations!

Good Luck

Blair has an extraordinary task in hands: to quickly convince continentals to radically alter the allocation of money in the process of European integration, dedicating it to vanguard areas; and to convince, in the short-term, his fellow countrymen that this Europe of innovation, without CAP, with a large and deepened Single Market, that is more demanding in the application of structural funds, is worth it, it is fundamental for this process of European transformation that the United Kingdom (UK) adheres to the Single Currency. It is for this Herculean task of Blair that many in Europe look at expectation (starting with Durão Barroso, who has been going through complicated times since he assumed the Presidency of the European Commission – supported by, rember, the UK). If it comes through, Blair’s Europe will be a very different Europe. With a coordinated Defence sector but without aprioristic ambitions of counter-power against the USA. With the euro and a Single Market even more developed. With a big role for the Members-States (MS) and great caution towards advances considered as federalist (with that point, France will keep agreeing to). It will be a Europe that will reform its social-economic model that is so pressured by demography and global competition. And It will also be a more demanding Europe on what concerns security and, possibly, more attentive and selective in relation to immigration. It will be less cohesive and more competitive. With less funds of cohesion but with renewed opportunities for the most dynamic MS (and more risks for those who are incapable of reforming themselves and compete). If he achieves it, Blair will be making History. If he obtains an agreement in the Financial Perspectives, reforming the CAP and the English rebate and if, afterwards, he brings the UK closer to the European Union and to the Euro, Blair will be justly referenced in future historical pages relative to the beginnings of the XXI century of the “Old Continent”. Good Luck.