EU: German Chancellor Gerhard Schröder went on the offensive against British prime minister Tony Blair yesterday, indirectly accusing him of wanting to "destroy" the European social model.
Mr Schröder warned that the chances for future generations in Europe were being endangered by the "populist motivations" of people driven by "national egotism", a phrase he last used during Mr Blair's Berlin visit last week.
"Do we want a united, capable of acting, a really political union or do we just want a big free trade zone, do we want to go from the European Union to the European Economic Community?" he asked.
Mr Schröder was speaking at the launch of a book, The Social State: A Discontinued Model?, written by Erhard Eppler, a leading left-wing thinker of Mr Schröder's Social Democratic Party. Mr Eppler warns in the book against the "neo-liberal religion of the market" and attacks the so-called "minimal state", calling for a "necessary state".
Mr Schröder said the forthcoming German election was not just about political parties but a decision on Germany's "future path". It was a decision between the SPD and the opposition Christian Democratic Union, which, he said, wanted to "gut the state".
Mr Schröder warned also that tax competition between EU member states could force the Union into an economic downward spiral, robbing it of the ability to finance public spending.
Mr Schröder's comments were echoed in Warsaw, where Polish prime minister Marek Belka accused Mr Blair of orchestrating last week's summit collapse. Mr Belka said he "didn't really see the will" of Mr Blair to compromise. "It turned out that it wasn't about money but about leadership in the Union and the controversies between the different countries of 'old' Europe," he told Gazeta Wyborcza.
Reuters adds: Britain can secure a deal on the EU's budget during its presidency but will also press for wider economic reform, Mr Blair has said. After talks with Swedish prime minister Göran Persson yesterday, he said: "We are prepared . . . to recognise that the rebate is an anomaly that has to go, but it has to be in the context of the other anomaly being changed as well."
Mr Persson backed the call for budgetary reform, arguing that it was no longer fair for Sweden to subsidise increasingly well-off nations like Ireland or Spain, and called for his country's "net contribution problem" to be solved.