France

The British government has worked hard to counteract any perception that it is being marginalised in Europe. Before the election, the Tory party went around to different capitals to assuage any fears that may have existed. The message: despite the Conservative departure from the EPP, and their anti-Lisbon Treaty remonstrations, they would not be a problem. They would be businesslike. Once in power, David Cameron unleashed his charm, showcased his polyglot Deputy Prime Minister and sent William Hague out to make everyone feel that they had a partner not a pariah in London. Further, the energetic and amiable David Lidington replaced the combative Mark Francois as Europe Minister. Links with

Nicolas Sarkozy has served up his second austerity budget in as many months, in a bid to retain France’s AAA credit rating. The president wants to cling on to those three precious letters at all costs. There are elections in six months’ time and he isn’t doing well in the polls. Austerité Part Deux consists of tax increases and spending cuts totalling €7 billion, the government announced today. There will be increases in VAT and levies on large corporations, as well as curbs on increases in welfare spending. This savings programme follows the €11 billion one announced in August. Sarko’s bid to get re-elected in 2012 is in disarray. According

David Rennie (aka The Economist’s Bagehot) has an excellent column in this week’s issue about the difficulties that Britain will face if she tries to repatriate powers from the EU. His main argument, having spoken to a number of senior German politicians and officials, is that if Britain holds up any treaty revisions in the hope of extracting concessions in return, then the other EU states will organise themselves without the UK. The Economist’s former Brussels correspondent also makes the key point that the 10 countries that are outside of the euro are not natural allies for the UK – some, like Denmark, do not want to join the euro,

Reuters is reporting tonight that the Greek Prime Minister has agreed to resign on Friday. The news agency says that at a meeting Cabinet colleagues told George Papandreou that he had to resign for the good of the Socialist party and he agreed. It quotes one source saying, “He agreed to step down. It was very civilised, with no acrimony.” Now, after Thursday’s experience, I suspect we’re all taking reports about what will, or will not, happen in Greece with a pinch of salt. But it does seem that the referendum is off, stymied in part by Merkel and Sarkozy, who have ridden roughshod over the idea of non-interference in

As the EU debt drama continues unspooling like a perversely watchable soap opera (the FT’s Neil Hume describes it as ‘eurozone crisis porn’), an intriguing sub-plot has emerged: Britain is suing the European Central Bank. The Treasury is unhappy with an ECB move to limit the kind of euro-denominated products that can pass through UK clearing houses, suspecting it’s a bid to shift financial activity from London to Paris/Berlin. So it’s taking legal action, the first of its kind by an EU member state. This is not the first UK-EU disagreement that has surfaced in recent months, underlining the tensions between Britain and the Continent as financial centres across Europe

The imminent success of the Libya intervention was, to a remarkable degree, down to Anglo-French cooperation. Though the media has been keen to play up, and even conjure up, rifts and disagreements between Paris and London — and the hyper-active Nicolas Sarkozy can’t help but act first and coordinate later — the fact is that the two states worked closer and better together than they have done for years. Probably not since the Suez operation have the British and French militaries cooperated so closely. But the intervention, even if it is coming to a (deadly and protracted) end did show up a number of deficiencies in materiel and command and