A new EU summit will see more prevaricating and bickering, but the slow process adds up to a seismic shift in European politics
Even, perhaps especially, in a crisis, Europe moves at a glacial pace. Incrementally, forwards and backwards, prevaricating, bickering: so it has been for three years of European troubles that began on the periphery, in Greece, but have spread to the heartland, condemning Europe to a lost decade.
An EU summit in Brussels on Thursday, the first since the summer break, will see more of the same – no big breakthrough, but a tug-of-war over a German push for yet more fiscal discipline in the eurozone, with governments and parliaments pressed to surrender powers over budgets and economic policy-making.
Almost everyone else is fed up with this joyless, hectoring, endless campaign from Berlin. But there is no sign of the Germans giving up. It will fall to the French under the relatively untested leadership of President François Hollande to lead the resistance. On Sunday the French prime minister, Jean-Marc Ayrault, spelled out an agenda diametrically opposed to Germany's.
In this tussle, Britain, as has become the pattern, will stand on the sidelines, increasingly disengaged in the creation of a two-tier Europe – a federalised eurozone of 17 countries for now, plus the other 10.
It may be a maddeningly slow process. But it all adds up to a seismic shift in the politics of Europe, the way power is wielded and policy-making discharged. There are multiple factors and dynamics involved: east versus west, north versus south, big versus small, EU institutions versus national governments. But in the end, the latest European dispensation will probably be settled by the big three – which in essence may mean the Germans are up, the French are down, and the Brits are out.
The immediate business of Greece and Spain is unlikely to be granted much quality time on Thursday and Friday. Instead, the summit will be consumed by three new moves – all big federalising eurozone steps, all originating in Berlin, and all heavily contested.
The first is to make the European Central Bank the supervisor of the eurozone's banks. The other two, unveiled last week by the EU's fixer-in-chief, Herman Van Rompuy of Belgium, who chairs the summits, are to bind national eurozone governments into annual "contracts" committing them to structural reforms of their labour markets, welfare and pension systems. The corollary to this, the third item, is to establish a modest, federal eurozone "budget" (quite distinct from the EU budget). It is modelled on the way Germany redistributes funds among its federal states, and would be used to cushion the impact of the reforms deemed necessary by the "contracts".
On these three points, parties as various as the British, the Swedes, the east Europeans, the Dutch, Luxembourg and France have big issues. They are part of the gameplan cobbled together by Van Rompuy to "complete" the currency union, a blueprint that is to be finalised by December.
The French are bristling at anything that smacks of surrendering parliamentary sovereignty, arguing that Berlin's grand plans can wait – the urgent issue is to fix Greece and Spain and restore confidence in the euro. "Harmonise yes, but preserving independent decision-taking," Ayrault said in an interview. "The logic is for a federation of nation states rather than for a federal Europe. The latter would mean that national parliaments would lose their budgetary sovereignty. The French parliament is very attached to that."
He dismissed German calls for a eurozone "political union" as the wrong idea at the wrong time. But France's clout at Europe's top table is not what it was. If the euro is to be saved, the likelihood is that it will be according to a script written largely, though not exclusively, in Berlin.
Crucially, what the proposals from Van Rompuy do not say is that the European treaties need to be reopened to make the mooted changes possible. That's a climbdown by Germany, which has long been insisting on reopening the Lisbon treaty but has recently gone quiet on the issue. It is also a concession to France, where a refashioned treaty retooling the eurozone would have needed a referendum which Hollande will do his utmost to avoid.
The moves towards eurozone integration without a treaty revision put Cameron in a tight spot. His apparent scheme to negotiate a new minimalist British settlement within the EU and then put it to the vote either in a UK referendum or in a general election hinges on the Lisbon treaty being reopened.
Top people in Brussels are now saying that Cameron has a weak hand and may find himself spearheading the calls for treaty renegotiation himself when he had been hoping that the others would open the door for him.
The attitude towards the Conservative party's European policies is summed up in the observation, often heard among policy-makers, that EU capitals are not trying to push Britain out, but they are not going to try to keep it in either.
The Anglo-Franco-German ménage à trois is shifting into a tricky phase that will shape the Nobel peace laureate's future. The smart money has to be on a Berlin-Paris accommodation that allows Hollande to save face while advancing the German federalist agenda. It will take a while but the direction of travel is clear. But where will it leave Cameron and Britain?
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