Europe finds unity on Russia

LISBON, Portugal — Maybe the Dutch should stay home more often.

The European Union's last summit of 2014 wrapped up ahead of time and with a remarkable absence of the usual squabbling, with Dutch Prime Minister Mark Rutte stuck in The Hague wrestling with a cabinet crisis that threatened his coalition government.

To be fair, the Dutch are rarely summit troublemakers. The leaders' success in reaching agreement a day ahead of time Thursday night was down more to the business-like approach of their new chairman — former Polish Prime Minister Donald Tusk — and a desire to get out of town before angry farmers surrounded EU headquarters in Brussels, Belgium, with a pre-dawn anti-free trade protest.

Before they flew home, the leaders endorsed an investment program designed to pump $385 billion into Europe's ailing economy and agreed to expand sanctions against Moscow, despite concerns over the international fallout from Russia's economic implosion.

"We focused on Europe's two most important challenges: boosting investment, and the situation at our eastern borders," Tusk told reporters as the summit closed just before midnight Thursday.

"We will not find a long-perspective solution for Ukraine without an adequate, consistent and united European strategy towards Russia," he said. "We must go beyond being reactive and defensive. As Europeans, we must regain our self-confidence and realize our own strengths."

As well as some straight talking on Russia, Tusk signaled a fresh approach at the start of his five-year tenure by reducing the summit's final declaration to just three pages. Last year’s December summit labored over a 25-page declaration with a 10-page annex under previous chairman Herman Van Rompuy, a onetime Belgian premier.

The summit’s centerpiece was the plan by the EU's headquarters to jumpstart the economy using an investment fund to finance public works around Europe — from gas pipelines to road and rail links and refurbishing for schools, hospitals and social housing.

Under the plan, the EU will set up a $26 billion "fund for strategic investments" designed to attract a further $359 billion in financing from the private sector and the EU's 28 national governments over the coming three years.

Although the plan’s architect, European Commission President Jean-Claude Juncker, had told the leaders ahead of the summit he needed "not just words but money," none of the national leaders made an offer to contribute their from state coffers.

However, they may be tempted by a commission sweetener allowing them to exempt contributions to the fund from EU rules against national budget overspending. The summit asked the European Parliament to move fast to approve the plan so the funding can kick in from mid-2015.

However, not everyone is convinced the investment package is what the euro zone's dormant economy needs.

"The Commission’s proposal is misguided, both in terms of its emphasis on investment and its proposed financing structure," Daniel Gros, director of the Brussels-based Center for European Policy Studies think-tank, wrote this week.

He believes Europe's priority should be boosting consumer spending, not investment in major infrastructure projects that he said big business can already easily finance thanks to record-low interest rates.

"If European policymakers are serious about economic recovery, they should focus on consumption, not investment," argued Gros, a former economic adviser to the European Commission.

The summit also turned its attention the negotiations between the EU and the United States to create the world's largest free-trade zone. Leaders called for a deal to be wrapped up by the end of next year despite deep misgiving in many sectors of European society reflected by Friday's farmers' protest in Brussels.

Although some EU members are complaining about the impact Russian sanctions are having on their economies and worry how President Vladimir Putin might react to his country's hastening economic meltdown, the summit produced a rare display of unity over Ukraine.

"We should keep the sanctions in place, keep that pressure on until Russia changes its behavior and stops the aggression in Ukraine," British Prime Minister David Cameron said. "There was a very clear and unanimous and united view in the European Union tonight."

Even before the meeting got underway, the EU announced a fresh round of sanctions to target Russian interests in Crimea, the Ukrainian Black Sea peninsula annexed by Putin in March.

The new measures will prevent European companies helping Russia search for oil and gas in the Black Sea, severely restrict trade and investment in Crimea and stop European tour companies selling vacations in the region. European cruise liners will stop sailing to Crimean resorts such as Yalta.

Less clear was how far cash-strapped EU nations are prepared to go to keep a near-bankrupt Ukraine afloat. None rushed forward to help the government in Kyiv fill a $15 billion funding gap.

Nor were European leaders jumping with joy at the news that President Petro Poroshenko is submitting a bill to parliament that would end Ukraine's non-aligned status and potentially clear the way for a renewed NATO membership application.

Although the military alliance officially says that its door is open and joining will be up to Ukraine, most European countries fear the response from a dangerously unpredictable Putin.

More from GlobalPost: No, Putin doesn’t know how to fix Russia’s economy

Overall, the summit marked a promising start for Tusk and unusually stress-free year-end for the EU presidents and prime ministers.

They will have few illusions about the challenges ahead in 2015, however.

They include a risk that elections in Greece could re-ignite the euro zone debt crisis and the certainty of elections in Britain that may open the way for a referendum on an exit from the EU.

Across the continent, there are also fears about long-term economic stagnation, rising support for extremist politicians on the left and right, and concerns the wounded Russian bear could lash out in response to its economic pain — just a few of the dangers in the New Year.