Battle-lines drawn over EU's future
This is a day to view some of the battle-lines being drawn in Europe. Firstly, the British government has published its . Its purpose is to draw a clear line preventing the "slippery slope", where more powers move inexorably to Brussels.
For many in the Conservative Party, this all comes too late. They argue that very substantive powers were handed to the EU under the . That battle, however, is lost to them. A minister said to me: "We are accepting the Lisbon Treaty as a done deal." The past has been accepted. There is no wish, said the minister, to reopen treaty changes.
So to the future. There will now be a "referendum lock": any new EU treaties or major changes to existing treaties will have to be approved or rejected by the British people in a referendum.
Examples would be a decision to give up the UK's border controls or to join the euro.
But ministers will have to decide whether treaty amendments are "significant" before recommending a referendum. New directives or obligations would not necessarily trigger a poll. So some new powers could go to the EU without the British people being consulted.
The judgement as to what is "significant" could prove controversial and could lead to legal challenges.
As expected, there is a "sovereignty clause" confirming that EU laws will only take effect in the UK with the agreement of the UK Parliament. The clause is intended to underline Parliament's sovereignty.
The bill also seeks to limit so-called "ratchet clauses" or "passerelles" where some competences can be automatically extended. These would now require primary legislation.
The bill is intended to deliver on a that never again will power be transferred to Brussels without the British people having a say.
It will not satisfy a significant number of Conservative back-benchers. Nor will it satisfy others.
But some like Liberal Democrat MEP Andrew Duff say: "We will be keen to reassure ourselves that this Bill does not substantively change the terms of the UK's membership of the EU...
"The move to referenda seems to be calculated to appeal to a populist and nationalist constituency which undoubtedly exists in the UK."
We may soon learn what is to be the final budget increase for 2011. The expectation is that the European Parliament, under pressure, will settle for 2.91%, the figure David Cameron persuaded some European leaders to insist was their top figure. MEPs, who wanted a 5.9% increase, have insisted that extra money is needed to fund the new institutions brought in by the Lisbon Treaty.
Even if there is agreement on a 2.91% increase, the MEPs have put down a marker that in future they want a stronger say over spending including direct EU taxes. Several countries including the UK and Germany oppose such taxes but the budget is shaping up to be another battle-line.
Then there is the euro. Ireland is teetering on the edge of a bail-out. Portugal may not be far behind.
"Ireland is close to losing credibility among investors," said one analyst. "There will have to be a bail-out in the end," said Ashok Shah of London and Capital.
Ireland does not need funds from the markets until June next year but the cost of borrowing is shooting up and there has been a dramatic sell-off of Irish bonds. The sentiment is moving against Ireland surviving without a rescue. Two-thirds of economists and bond strategists polled by Reuters foresaw a bail-out by the end of next year.
Ireland is about to announce its fiscal plan for the next four years. It will need a further 15bn euros in savings. No one doubts the Irish government's determination to find those savings both by raising taxes and cutting spending. The details will be announced in the budget on 7 December. But - and here's the rub - the financial markets fear the austerity measures will only make matters worse by choking demand. Ireland, they believe, is locked in a deadly downward spiral.
Being locked into the euro, Ireland does not have the freedom to lower its exchange rate and so boost its exports. There are only two alternatives left: fierce austerity and/or a bail-out.
Here again there are battle-lines. Several European leaders have recently said that the whole European project depends on the euro surviving in its present form. They are statements rooted in a deep anxiety but no one should doubt the determination of Europe's high officials to fight to save the single currency. The question is this: Is it better to defend countries staying in the euro at all cost or might it make sense for some countries to leave the single currency for a period, sort out their economies and then rejoin the euro some time in the future?
Much of the European year has been devoted to firefighting to save the euro. The final weeks of 2010 look as if there will be more of the same. It is another fault-line.
It did not help sentiment that the Greek government announced that it was unlikely to meet the budget deficit agreed with the EU and the IMF. The deficit will likely be 9% rather than 8.1%.
And then lurking in the background is the big clash of visions. Herman Van Rompuy, the president of the Council, declared in Berlin that "euroscepticism leads to war". He went on to say that "a rising tide of nationalism is the EU's biggest enemy".
He added the thought that "the time of the homogeneous nation state is over". Those comments have enraged some but President Van Rompuy speaks with a candour not always shared by other senior officials. You know where you stand with him. He challenges the idea of the nation state surviving in the globalised world.
Of course there are others who say that the EU is profoundly undemocratic, bureaucratic and wasteful of money. They would argue that increasingly - when given the chance - Europe's voters show they see their identity tied to the nation state.
But all around there are big defining arguments over the future shape of Europe.
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