Brown's big EU day leaves smaller states out in cold

EUROPEAN DIARY:  Gordon Brown will host his first big European event as prime minister today when the leaders of France, Germany…

EUROPEAN DIARY: Gordon Brown will host his first big European event as prime minister today when the leaders of France, Germany and Italy jet into London for talks about financial stability, writes Jamie Smyth.

Stung by the negative media reaction to his embarrassing "will I or won't I?" routine over the signing of the EU treaty in Lisbon last month, the notoriously Euro-shy British leader has gone back to his economic roots to re-engage with the union.

Downing Street wants to build an EU consensus on promoting greater transparency and risk management in the global markets as well as explore the creation of an "early warning system" for turbulence on financial markets.

And with storm clouds hanging over the US economy, British bank Northern Rock teetering on the brink of bankruptcy and French bank Société Générale still reeling from the €4.9 billion in losses totted up by rogue trader Jérôme Kerviel, Europe's leaders have plenty to talk about later today.

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Yet even this latest Brown initiative has fallen foul of political controversy with the error-prone British leader being accused by small member states of undermining EU solidarity.

"Europe is not made only for the big nations," complained Belgian prime minister Guy Verhofstadt, reviving fears of a "directoire" of big European states deciding EU policy.

"What is happening now? Four big countries of the union want to discuss the financial situation with possible consequences for the entire union. Europe was not made only for the big but for all European citizens, states and populations, including the small," said Verhofstadt, who complained bitterly about a similar ad-hoc meeting of EU leaders back in 2001 arranged by Tony Blair after the September 11th attacks.

On that occasion Blair was belatedly forced to invite four additional EU leaders to pacify those feeling left out.

Brown learned few lessons from this incident. His decision not to invite Italian prime minister Romano Prodi when the summit was first agreed provoked a typically tetchy response from the fourth-biggest EU economy.

Within days he was forced to backtrack and extend an invitation to Prodi, who has since been forced to resign as prime minister.

Brown then dithered for several days over whether to invite European Commission president José Manuel Barroso to the mini-summit.

Under pressure from small EU states, who view the commission as their natural allies in Europe, once again he relented and extended the guest list to include the head of the EU executive - the European body that is usually tasked with dreaming up new ideas for the union and drawing up legislation.

But is there anything wrong in principle with ad-hoc meetings of EU leaders? "There is nothing wrong when prime ministers from small states meet outside the EU structure," says Antonio Missiroli, director of the European Policy Centre (EPC) in Brussels.

"No one suspects these are attempts to build up new leadership groups in Europe."

The problems arise when the guest list at these mini-summits is restricted to the leaders of the big four or five EU states, prompting suspicion among smaller states that EU proposals are being pre-cooked without their input.

The London summit has added insult to injury for some states, given that Brown has refused to introduce the euro in Britain.

"The suspicion is that some states are building a new leadership group," says Missiroli, who adds that mini-summits and meetings of smaller subgroups of EU states are inevitable given the expansion of the EU to 27 member states.

"There is less chance for substantial discussion when there are 80 people in a room at EU meetings," he says.

The commission's drive to cut red tape rather than work on new legislation at the EU level has also left space for EU states to become more involved in policy initiation.

This trend is perhaps best illustrated in the justice field, where an informal group of the six biggest EU states, called the G6 (UK, Germany, Italy, France, Poland and Spain), meet regularly and discuss ideas that later appear on the agenda of the council of ministers.

"The fears of small states are to a certain extent justified and should be taken seriously," says Florian Geyer, analyst at the Centre for European Policy Studies.

"In theory the meeting in London is a brainstorming exercise and nothing will be legislated on until it gets to the council of ministers.

"But states not invited do not get an input at the start."

With the Lisbon Treaty giving bigger EU states more voting power at the council of ministers, and the European Parliament - where MEPs often vote on national lines - extending its powers, now may not be the best time for big states to flex their muscles and leave countries like Ireland feeling left out in the cold.