The time has come for Europe to find its leader

'It would be an excellent job for many an ex-prime minister - maybe even Tony Blair'

It is an irresistible spectacle: British bulldog Chancellor takes on the Eurocrats. Today Gordon Brown will strongly oppose the call for Germany to be formally rebuked by European finance ministers for its threatened budget deficit. At the same time the Chancellor will also resist a rather less severe warning, also proposed by the European Commission, that the UK should rein in its public spending plans by some £10bn if it is to remain within the rules agreed four years ago for maintaining stability and growth in the European economies.

Irresistible as it may be, however, it is also a caricature. For wherever you stand on Europe, the Chancellor's stance is objectively correct. There may be every reason for encouraging Germany to do more about economic reform. But it is crazy to demand that Germany – let alone the UK – with one of the lowest historic levels of public investment in the EU – should be raising taxes or cutting spending in the midst of an economic downturn to meet an inflexible limit of 3 per cent of GDP for budget deficits. It would be much more sensible if Europe followed the practice laid down in the UK by Mr Brown of insisting that budgets should be balanced over the whole economic cycle and that extra borrowing can be justified for investment.

But then the Commission is only seeking to put into practice what the heads of European governments decided in 1997 in the European Council. It was Germany which, under the influence of the Bundesbank, insisted on such a regime in the first place. The French, desperate for euro-membership, agreed to a price which, by a neat irony, Germany has become the first EU member to discover was too high. The Commission's job is to apply the rules. It is the rules, as Mr Brown has repeatedly pointed out, which need to be changed.

This insight into the relationship between the Commission and the European Council (made up of the EU's national politicians), and how to make them more effective, matters. It is one of the issues at the heart of the convention on the future of Europe's institutions which opens next month under the chairmanship of the former French president Valéry Giscard d'Estaing.

Ideally, the British could have done without the convention, which will prepare the way for an Inter-Governmental Conference on the future of Europe in 2004. Scheduled to last at least a year, it is unpredictable, particularly for British enthusiasts for the euro. If it at least partly reinforces the notion of a Europe of nation states, it could help the European cause, but if it is too integrationist in tone it could fuel arguments against entry. Mr Giscard, who saw Tony Blair last week, is giving little away. But he will want the convention's conclusions to be clear. He certainly sees it as his chance to make a final mark on European history, not as some amiable academic exercise.

But the British cannot wish the convention away. Deep thought is therefore going on in Whitehall about what ideas to put forward for it. A key question concerns the democratic legitimacy of Europe and the respective roles of the European Commission and the European Council. When Peter Hain told The Independent at Christmas that the idea of a directly elected president of the commission was "barmy" he was doing no more than reflecting the British view that the European Council, accountable to their national electorates, and not the commission, was the real source of political legitimacy. But some of the more outré notions for strengthening the council to have since surfaced from London haven't been that constructive. For example, the notion that the big countries should run the EU on the model of the permanent membership of the UN Security Council has, to put it very mildly indeed, caused widespread offence, especially to the smaller countries.

But another idea being tentatively discussed in Whitehall makes a good deal more sense. One of the major difficulties is that the presidency of the European Council (and all the departmental councils of ministers, from agriculture to environment) changes every six months. This almost totally robs the council of continuity. Why not have much longer presidencies – say, every two and a half years (with different countries taking charge of the various sectoral councils over the same period)? And why not let the council itself elect its president? This would, in fact, give the smaller countries a considerable say, since each member state would probably have one vote. And there would be safeguards to ensure that the smaller countries had a chance to take the presidencies.

Now here's the interesting bit. No existing head of government could take the job for so long because it would be far too much work. It would therefore require a heavyweight, an ex-prime minister with recent experience on the council. Rather as an ex-minister such as Javier Solana represents the council on foreign affairs, so this new ex-head of government would speak for it on all matters, political, economic and global. Not only would Europe at last have the telephone number Henry Kissinger always used to complain it didn't have; but it would have – for a two-and-half-year term – a leader. Or if not a leader, at least an identifiable super-spokesman.

The immediate fear would be that this eclipses the commission, and its president in particular. But that need not be so. First, enlargement has a natural tendency to make the commission more, rather than less powerful because it alone can produce proposals which stand a chance of agreement. The council idea would merely balance this with a parallel strengthening of a body answerable to its national electorates. Second, the need for a commission of tough ex-national politicians capable of taking independent decisions, on competition, say, or agricultural reform, and of standing up to vested national interests would not have gone away.

Those who argue, moreover, that the European Commission president should be elected, if not directly then by the European Parliament, miss several points. One is that many people, even in the commission, are not too keen on this, since it would politicise the commission and militate against exactly that capacity to be both collegiate and independent of different interests. Second, the idea that we would all care more about the European Parliament because it had the power to choose between two foreigners to elect a president is surely fanciful. Finally, even Jacques Delors, the strongest commission president in recent times, drew that strength from his ability to identify the common ground between the heads of government, the real repositories of political strength.

Neither Jack Straw nor the Prime Minister have as yet decided to sign up to this idea. But they should do so. It is one of several ways of whittling down the idea that "Brussels" runs everything – while actually ensuring that the commission does what it does best – seeing that the member states actually do what they say they want to do. It would be an excellent job for many an ex-prime minister. Wim Kok of the Netherlands, say. Or come to think of it, once he has stepped down, maybe even Tony Blair.

d.macintyre@independent.co.uk