Saturday, 10 December 2011

European Council: centrifugal Cameron

Hopefully the political leaders, their teams, the EU officials and the journalists on duty during the European Council 8 and 9 December 2011 get some well deserved rest.

Soon enough they are going to be confronted with an astonishing number of political and legal questions needing to be sorted out.

First we have to look at what the summit(s) produced.

European Council conclusions

The traditonal conclusions are available in all the 23 official EU languages; the English version:

European Council 9 December 2011 conclusions (EUCO 139/11; 7 pages)

If you take a closer look, you notice that just over two text pages are dedicated to general economic policy issues, with many references to the Euro Plus Pact. The rest of the conclusions deal with energy, enlargement and some other topics.

For the second time in a short while, the meeting in the EU27 framework reminds us of the plain sliced bread roll of a hamburger, but without the beef or garnish.

This is not that far from the hastily called meeting where the EU heads of state or government were informed about the preparations for the Euro Summit later the same day, 26 (to 27) October 2011.

Now the ”bouches inutiles” of those unproductive in the defence during ancient sieges left the formal European Council conclusions gutted: the sliced roll.

To the extent that there is beef and garnish, they belong to the defenders of the euro, in the euro area statement in the official languages; in English (revised version):

Statement by the euro area heads of state or government; 9 December 2011

Centripetal forces

By Friday morning the 17 eurozone were joined by the same six non-euro countries which had earlier adopted the Euro Plus Pact in order to stay as close to the core as possible.

When prime minister David Cameron rejected regular treaty reform (without permanent powers for the United Kingdom to block financial regulation), the Czech Republic, Hungary and Sweden realised that they were on course towards marginalisation.

Despite their governments, parliaments and public opinions being cool towards deeper integration, deliberate loss of influence is not an attractive option. Difficult domestic discussion await, but they wanted to secure the option to join the new fiscal compact and to participate in fleshing out the details.

The euro area statement was revised accordingly, and the last sentence now reads like this:

The Heads of State or Government of Bulgaria, Czech Republic, Denmark, Hungary, Latvia, Lithuania, Poland, Romania and Sweden indicated the possibility to take part in this process after consulting their Parliaments where appropriate.

Potentially there could be 26 participants in the new fiscal compact, leaving Britain alone. It is more probable that the six non-euro members of the Euro Plus Pact are willing to take the next step together with the eurozone 17: Bulgaria, Denmark, Latvia, Lithuania, Poland and Romania.

For the Czech Republic, Hungary and Sweden the fiscal compact (and, I imagine, belatedly joining the Euro Plus Pact) would mean reorientation, against the grain of their previous policies. However, few national leaders embrace loss of influence, if they can avoid it.

The eurozone chaos has done little to sweeten the deal. Less than 10 per cent of the Swedes support euro adoption, down by around 40 percentage points in two years.

United Kingdom

Let us still call a 27-1 European Union a theoretical outcome, but prime minister David Cameron's centrifugal strategy has brought something close to it into the realm of reality.

By falling on his sword to please his backbenchers, he did not become more fit to defend the one square mile of Britain he ostentatiously cares about. On the contrary, the UK's goodwill deficit grew considerably, so the government is less useful for the City in the future.

I wonder why deputy prime minister Nick Clegg signed up to the strategic disaster.

Cameron's reaction leaves the door open for reprisals to prevent the rest of the EU member states from using the institutions and facilities of the European Union:

When we can’t be given those safeguards in the treaty, it is better this is done by intergovernmental arrangements, outside the treaty and outside the institutions of the European Union. That is what will happen, and that is what is in Britain’s national interests.

As I said, there is an astonishing number of political and legal questions to sort out after the European summit(s), without Cameron including active sabotage in his well wishes to the countries joining the fiscal compact.

Soon enough the participants will find the difficulties all by themselves.

Ralf Grahn