European Union Crisis: MEPs retreat in battle with Santer

A BLOODIED European Commission looks likely to cling on to power today after an eleventh-hour threat to quit by its President, Jacques Santer, called the bluff of the European Parliament.

MEPs were poised last night to draw back from a threat to vote the Commission out of office after a day of turmoil in which Mr Santer warned he would resign if they voted to sack Edith Cresson, the former French Socialist prime minister. The Brussels executive could still find itself out of power in the unlikely event of a majority calling for the resignation of the scandal- tainted Mrs Cresson in a vote today.

Sacking the Commission body would be an unprecedented act that would plunge the European Union into crisis. It would halt key reforms to the common agricultural policy and the pounds 60bn annual budget needed to prepare the Union for enlargement.

Strasbourg was engulfed by intrigue yesterday as the Commission's future hung in the balance. A desperate scramble was under way in the parliament's committee rooms while Commission supporters - mostly Socialist MEPs - sought to fight off a motion of censure, the so-called "nuclear option" that would vote the Commission out of office, and another motion singling out individual commissioners for blame.

Mr Santer moved to ensure his own survival in the small hours of yesterday when he issued a challenge to the biggest grouping, the 202 MEPs of the centre-right Christian Democrat group. The tactic prompted up to 80 conservatives to pull back from the brink when he made clear that a resolution targeting Mrs Cresson, the Commissioner for education, would prompt him to resign, probably bringing the entire Commission body with him.

The Christian Democrats backed off and instead of "naming and shaming" Mrs Cresson and Manuel Marin, a Spanish Vice-President of the Commission, they were planning a resolution severely criticising EU financial mismanagement.

All week MEPs had been talking up the "nuclear option" of sacking the full Commission body over a burgeoning fraud and nepotism scandal that dates from 1995.

Over dinner in the European Parliament's plush riverside restaurant late on Tuesday evening, about 20 centre-right Euro MPs had gathered in the cavernous red-carpeted room. They were questioning Mr Santer about the long-running mismanagement scandal when he suddenly unveiled his threat to plunge the EU into a constitutional crisis by resigning himself if MEPs tried to censure any members of his team.

A dispute over the EU 1996 budget was spinning out of control and threatening meltdown - much as Monica Lewinsky's allegations against President Bill Clinton came seemingly from nowhere to threaten his presidency.

Yesterday, in a nondescript meeting room beside the Parliament's hemicycle, Tory MEPs met Sir Leon Brittan, another Vice-President of the European Commission, seeking to avert a showdown. But when Sir Leon tried to mollify the MEPs by offering a new committee to investigate the fraud allegations, one MEP responded: "What's the point of a group of wise men when we want blood?"

Most of the details of fraud and irregularities date back several years, but two sitting commissioners have been singled out for attack.

Mrs Cresson has come in for acute criticism over alleged poor administration of a youth training programme and for "favouritism" in the awarding of contracts.

Mr Marin faces questions about the administration of the multi-billion pound humanitarian aid budget, "Echo", which he controlled until 1995, and the "Med" programme, designed to help Mediterranean countries.

When, last month, the Parliament's budget control committee refused to sign off a set of accounts relating to 1996, the Socialists proposed today's censure motion, which was intended to fail, as a means of giving the Commission a vote of confidence.

That initiative, made by Pauline Green, leader of the Socialists (the largest group in the Parliament), backfired badly. With a two-thirds majority needed to expel the Commission, adoption of the censure motion seemed impossible. But last week Commission bureaucrats in Brussels enraged MEPs by suspending a whistle-blowing official, Paul van Buitenen.

The ensuing outcry provoked the power struggle between the Parliament and the unelected college of 20 Commissioners.

As a welter of further revelations rocked the Commission, the Socialist position proved more and more difficult to sustain. Not only had Mr Van Buitenen's predicament raised the temperature, but also Mrs Cresson showed no signs of bowing to a growing clamour for her departure.

With her MEPs concerned that they were appearing to be soft on fraud, Mrs Green changed course and demanded concessions from the Commission. At the same time, she called for Mr Santer to quit if any within his college were singled out.

There seems little doubt that Mr Santer was a co-conspirator in this move to raise the stakes, because there is ample evidence of dialogue between the two. A late-night meeting on Tuesday in the Hilton Hotel was captured on film by a German television crew.

MEPs' anger at Mrs Cresson remains undiminished. Last week she held two dinners for journalists in her elegant Brussels apartment, in which she railed against her accusers. The German media was, she argued, chiefly to blame for creating a furore to fuel the new Eurosceptic mood of a nation that feels it is paying too much to Brussels. At one event she even hinted that dirty tricks against her were being investigated by the security services.

Her mood towards the Parliament was defiant. During Monday's debate she defended herself, from a seated position, without much hint of apology. By contrast, her colleague Mr Marin stood, and made an emotional and effective defence of his honesty.

When the two appeared at a meeting of the Liberals, the third largest group in the Parliament, the pattern was repeated: Mr Marin contrite but admitting to no wrong; Mrs Cresson "vigorous".

She was arguing from a position of strength. The Parliament has no right to censure individuals, and constitutionally Mr Santer cannot sack them either. But even this is an anomaly; Mr Santer told one group of MEPs that any minister in his native Luxembourg who stood accused of similar charges would have resigned.

But the mood among the 20-strong Commission was also defiant. Appointed by national governments, the Commissioners include experienced and streetwise politicians such as Neil Kinnock, the former Labour leader, and Sir Leon, both of whom wanted to stand firm. Several are due to leave their posts in the summer; others just couldn't stomach the idea of caving in. At their meeting on Tuesday, one Commissioner said he would "rather be sacked than crawl" to the Parliament.

Diary Of A Showdown

1995: Fraud in the EU is highlighted by a Tory MEP, Edward McMillan Scott (right). Two officials face criminal charges for allegedly defrauding European Year of Tourism of up to pounds 3m. The case continues. November 1995: European Court of Auditors refuses to certify EU's annual accounts after discovering that almost pounds 3bn is not properly accounted for. Late 1996: European Parliament, concerned by the Commission's slow response on tourism fraud, threatens to freeze 10 per cent of Commissioners' salaries. Commission sets up task force. November 1996: Court of Auditors once more refuses to certify EU's accounts amid signs of lax controls over about pounds 2.5bn. Early 1997: Finnish Commissioner Erkki Liikanen (above) announces plan to root out nepotism in Commission and improve financial controls. March 1998: Parliament holds up EU budget again, pending promised concessions from Commission. October 1998: Allegations in French press about cronyism in education and training department of French Socialist Commissioner Edith Cresson (right). She threatens law suits. More allegations about loss of pounds 1.7m in humanitarian aid money because of irregularities going back to early 1980s when the Spanish Commissioner, Manuel Marin, was in charge of programme. October 1998: Santer promises independent fraud office to replace Uclaf, Commission's fraud unit, in bid to fend off German MEPs' threats to table motion of censure. December 1998: Parliament refuses to discharge budget after Commission issues a "back us or sack us" threat. Pauline Green (right), leader of the Socialist group, tables a censure motion she knows will fail - in effect a tactic to bring about a vote of confidence in the European Commission. January 1999: News of suspension of Commission whistleblower Paul van Buitenen (below right) reaches Parliament. He has already sent a 34-page dossier of allegations to Green group in Parliament. Support for sacking the entire Commission builds dramatically among angry MEPs across political spectrum. His $300,000 job suddenly at risk, Jacques Santer promises "zero tolerance" in an eight-point clean-up plan, including unfettered access to documents by a select committee of Parliament and an end to nepotism in appointments.