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Ajouter un commentaireThe Council has resolved to have the new treaty signed at a summit in March 2012, which will coincide with Ireland’s decision on whether the approval of the reform will require them to hold a referendum. In addition, certain Member States such as Hungary and the Czech Republic have made it clear that they are fully opposed to any measures involving fiscal harmonisation.
However, the United Kingdom has since reconsidered its tough stance and is now willing to cooperate to minimise disruption to the internal market and ensure stability within the Eurozone, where the UK’s main business partners are located. The new agreement will establish a balanced budget rule : the deficit shall not exceed 0.5% of the GDP and the European Commission will penalise any Eurozone countries whose deficit goes above 3% of their GDP. Countries outside the Eurozone will only be affected by the first part of this rule.
The possibility has been discussed that, in the week following the summit, the UK may put pressure on the Commission not to take action against countries which do not comply with the ’golden rule’ on deficits. In taking the decision to reform a treaty, heads of state and government raised the difficult question of whether a country could exercise its right to veto in order to block action being taken by a supranational institution like the Commission. This is a return to the old debate between community and intergovernmental reasoning – now more significant than ever following the EU summit on 9 December. The main issue appears to be whether this latest in a string of summits attempting to “save the Euro” that have been held since that fateful summer of 2008, with the collapse of Lehman Brothers, has found a way to restore the strength of the single currency at last. On this occasion a ’fiscal compact’ has been signed by 25 countries, imposing constitutional disciplinary measures with automatic sanctions for those that do not comply, in line with the assertions of Mario Draghi, President of the European Central Bank (ECB) – the very institution that is set to purchase national bonds on a massive scale.-
- Mario Draghi, President of the ECB Image source : European Commission
Even if some may suggest that the ECB has shown a lukewarm response to the measure, it is still unsurprising that the biggest sceptics appear to be members of the European Parliament. The general consensus is that the series of intergovernmental meetings and Council summits since 2008 have taken us no further in finding a viable solution for the markets and the Euro. Even if the Council were to conclude that the summit led to fiscal union in the EU, it must be said that this would be a union based on stability and austerity without any fiscal harmonisation or redistributive transfers. The model put forth by the ’big two’ of France and Germany responds to a German way of thinking, too, since France has already shown itself to be more supportive of the ECB’s methods of intervention and flexibility when it comes to government debt. Among other bodies expected to take a leading role, according to the Council, is the Court of Justice, which will be able to impose the balanced budget rule under Article 273 of the Treaty on the Functioning of the European Union. However, in principle, it will not have the authority to veto state-approved budgets. It remains to be seen how this particular contradiction will be resolved.
There is one institution that has been left feeling somewhat ignored in all of this, however – the European Parliament. It is demanding a greater role in the fiscal compact, which will take immediate effect in the 17 Eurozone countries despite the fact that certain members of the European Parliament have expressed concerns at what they feel are unnecessary changes to the treaty. The principal argument is that the ’six pack’ legislative package, passed by the Parliament at the end of September, already includes measures for monitoring observance of national budgetary commitments. What is more, some countries, including Spain, have already passed constitutional amendments at the end of the summer to prevent debt limits being exceeded.
- Joseph Daul Image source : European Parliament on Flickr
Despite holding a strong majority in the European Parliament, leader of the European People’s Party Joseph Daul has been quick to join forces with other groups to seek a clear institutional role for the Parliament, pointing out the inadequacy of the intergovernmental method for reaching binding agreements, which puts European politics in an extremely unclear position.
- Martin Schulz Image source : European Parliament on flickr
Meanwhile, European Socialist leader Martin Schulz feels that the ECB should have greater authority and should provide last-resort loans. As it is currently unconfirmed whether this is a possibility, a guarantee should be put in place to the effect that the European Stability Mechanism (ESM) could lend money to countries from 2013 onwards. At the summit it was decided that the ESM would have access to €500 billion in addition to the €200 billion to be provided through the IMF.
- Guy Verhofstadt Image source : European Parliament on flickr
On the other hand, Guy Verhofstadt, of the liberal party ALDE (Alliance of Liberals and Democrats for Europe), is supportive of a long-term stability plan implemented through a treaty – but only if all 27 countries sign. He is not against greater intervention from the ECB, on the basis that the Union requires a joint issuance of bonds in order to mutualise Eurozone debt up to a maximum of 60% of GDP, but insists that the ECB should be independent from governments and emphasises that the only way to put an end to intergovernmental methods is to establish a clearly defined leadership strategy for the European Commission – both in terms of proposals and of the way in which economic measures are controlled. The need to make the ECB more relevant is a belief shared by Daniel Cohn-Bendit, leader of the Greens, who feels that the Frankfurt-based institution is already acting as a de facto provider of last-resort loans, albeit without support from politicians and not in a visible, permanent manner. In this context, Eurobonds are beginning to look like the perfect solution, under the command of the Commission and the supervision of the Parliament, given that intergovernmental agreements have proved, seemingly, to be totally useless.
British Conservative MEP Martin Callanan is extremely sceptical as to whether the changes to the treaty will be of use in confronting the crisis, insisting that Eurobonds will provide an unfair situation in terms of ’non-compliant’ countries and the moral issues behind potentially having to bail them out, which will remove the incentive for peripheral economies to become more competitive. As a means of defending the “interests of the British nation”, the Conservatives have championed the idea of a clear separation in the way in which the single market and the Eurozone are governed. Indeed, as the UK is not getting involved with the changes currently being made to the treaty, there is a risk that the terms of the single market may be affected. Callanan points out in conclusion that he respects the Eurozone countries’ desire to take a legitimate step towards fiscal federalism – but in return would like to see greater flexibility in UK-EU relations.
In its first session in January, the European Parliament will vote on the road map for tackling the crisis. This road map will include measures for granting the ECB more powers, with the treaty reform being deemed ineffectual. Criticisms among the different institutions are running parallel to the reality of the situation – that some Member States are still finding it difficult to repay their debt. Italy, for example, will need €400 billion to pay off its bonds in the next twelve months, in an environment that is becoming increasingly strained due to the permanent threat of Eurozone countries being downgraded by ratings agencies. Up until now, in practice, economic policy has not needed to be delegated to Brussels, as a number of European solidarity mechanisms have been put into place – in particular the ESM itself, which will enter into force in July 2012 and will consist of a fund made available to Eurozone countries having temporary financial difficulties on the markets. It is highly similar, in this regard, to a European Monetary Fund. The ESM’s decisions will be passed with an 85% qualified majority in order to avoid minority blocks and vetoes. This mechanism will alleviate the pressure the markets are imposing on certain economies that are having problems meeting their national debt.
In the current climate, the survival of the Euro means the survival of the Union itself. The Maastricht economic convergence programme has failed to succeed, and has weakened the Eurozone. The task now is to carve out a supranational method of economic governance, with a powerful Commission, supported by the Council and underpinned by the Court of Justice. The European Parliament needs to do more than merely sit on the sidelines if we are to overcome the issue of lawfulness. This political line is linked to the creation of uniform conditions for industrial, commercial and employment policies, among others, throughout the Eurozone, such that national interests fade in favour of the common interest.
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Eurozona : la revisión del Tratado despierta una nueva batalla interinstitucional
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