The fiscal compact, officially the Treaty on stability, coordination and governance in the economic and monetary union (TSCG), was signed yesterday by 25 of the 27 governments of the EU member states. Only the Czech Republic and the United Kingdom chose to exclude themselves at this stage.
The TSCG text is available in the 22 authentic treaty languages (Bulgarian, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Irish, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovenian, Spanish and Swedish).
A common concern
The recital reminds us of the obligation of all member states of the European Union to regard their economic policies as a matter of common concern. This obligation was introduced by the Maastricht Treaty, which was signed twenty years ago.
Recently, the failure of the states to adhere to and to enforce this obligation has turned it into a grave concern, common to all EU citizens (and beyond).
The TSCG still builds on the principle of national economic policies, which need to be coordinated intergovernmentally, although it purports to shrink the straitjacket.
Treaty law and enhanced cooperation
The aim of the signatories is to incorporate the substance of the TSCG into the legal framework
of the European Union within five years (Article 16). According to Article 10, enhanced cooperation is seen as an option.
This intergovernmental treaty, close to but outside the institutional framework of the European Union, went through six different drafts, which were not officially made public. However, the draft texts were leaked to selected media. Even if selective leaks violate the principle of equality between EU citizens, openness was served.
Ratification
According to Article 14(2) and (3), the TSCG needs to be ratified by at least twelve euro area member states to enter into force among them.
The meaning is twofold. The final number of ratifying states may be less than 25. For constitutional reasons Ireland is going to call yet another national referendum. Other countries may stumble when they try to transpose the changes into national law, although aid from the European Stability Mechanism (ESM) will become conditional upon the ratification of the TSCG.
On the other hand, a few dropouts won't spoil the party for the masochists.
Euro Summit
The provisions on governance (Euro Summit) apply to all parties from the original entry into force. See Article 14(4). The TSCG legalises the recent practice of euro summits, which have eclipsed the Eurogroup, which meets informally but is mentioned in an EU Treaty protocol.
Political alignment
For the non-euro countries, the TSCG is mainly a symbol of political alignment, since they undertake no concrete obligations, if they do not expressly undertake obligations. See Article 14(5). However, according to Article 12(3) they are granted limited participation rights in the Euro Summit.
The TSCG as a whole applies to the eurozone countries, although only a part of the provisions are real additions to the euro area acquis.
The signing of the TSCG took care of the ”austerity” part at the European Council 1-2 March 2012, so the main part of the EUCO meeting could – for a change – be devoted to economic growth, competitiveness and jobs.
Ralf Grahn
speaker on EU affairs, especially digital policy and law
P.S. Between the global issues and the national level, with a tenuous hold on democracy, the European Union institutions and the eurozone coteries shape our future. At the same time we see a European online public sphere emerging. Grahnlaw (recently ranked fourth among political blogs in Finland), Grahnblawg (in Swedish) and Eurooppaoikeus (in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Are you following the debates which matter for your future? Is your blog already listed on Bloggingportal?
Showing posts with label fiscal compact. Show all posts
Showing posts with label fiscal compact. Show all posts
Saturday, 3 March 2012
Friday, 24 February 2012
Transparency during the eurozone crises
On 22 February 2012 Attac Finland and Attac Parliament organised a seminar about the new budgetary discipline in the EU and its implications for socio-economic developments and democracy.
The discussion was kicked off by foreign minister Erkki Tuomioja, who is also the chair of Attac Parliament, and by professor Heikki Patomäki, who is one of the three chairpersons of Attac Finland. Between professor Magnus Ryner, who is a political economist, and the researcher Kenneth Haar, who represents the Corporate Europe Observatory, I made a presentation titled The New Stability Union: Implications for Transparency and Democracy, offering my views from the perspective of an EU citizen.
This blog post and a string of later ones are based on my speech, which I began by asking:
Where are we going in terms of transparency and democracy?
My short answer is: from bad to worse, at least in the short term.
However, some of you might want to know why and how.
Transparency
I'll begin by looking at transparency, or openness, in the European Union, in general, with regard to economic policy and concerning the new stability union, the so called fiscal compact.
The Treaty of Lisbon entered into force on 1 December 2009, so we have seen the new EU ground rules in action for a little more than two years.
The start is quite promising. Right at the top, in Article 1 of the Treaty on European Union, we are told:
Let us now put ourselves in the role of the trusting citizen, who takes this promise of a maximum of openness and closeness at face value.
Instead of building theoretical castles, he or she takes a closer look at economic policy making and the birth of the stability union in the light of available public information.
During these last two years, no questions have been more central to the economic wellbeing of European citizens than the ongoing multiple crises in the eurozone, the efforts to contain the effects and to return to a path towards economic growth and new jobs.
For the sake of brevity, I am going back in history only to the December 2011 summits. The heads of state or government of the euro area countries issued a statement (9 December 2011), where they announced future action in two directions:
- a new fiscal compact and strengthened economic policy coordination;
- the development of stabilisation tools to face short term challenges.
The statement itself contained main points about the common understanding, but no exact documentary references.
How about the guarantees for openness during the operations to contain and to overcome the crises?
Eurogroup
The informal Eurogroup, where finance ministers meet ”to discuss questions related to the specific responsibilities they share with the single currency”, is at least referred to in a protocol (No 14) annexed to the Treaties.
Euro Summit
The eurozone summits have just been convened without any particular legal basis. The Euro Summit has now been institutionalised, turned into a permanent feature with at least biannual meetings and a permanent president.
The Euro Summit is currently based only on the conclusions of the eurozone heads of state or government themselves (Euro Summit statement 26 October 2011, paragraphs 30-33 and Annex 1), although the so called fiscal compact tries to catch up with reality (Article 12 TSCG).
Good governance and transparency?
We are looking at economic policy making for the euro area, which consists of 17 countries, with a total population of 332 million people (Eurostat) – bigger than the home of the US dollar, with 313 million (US Census Bureau).
What do we have? Now we have not only one, but two informal conclaves preparing and agreeing on crucial issues in the dark, before they give the public a rough outline of what has been agreed (if not formally decided).
Ralf Grahn
speaker on EU affairs, especially digital policy and law
P.S. 1: For better or for worse, between the global issues and the national level, the European Union institutions and the eurozone coteries shape our future. More than 900 euroblogs are aggregated by multilingual Bloggingportal.eu. Is your blog already listed among them? Are you following the debates which matter for your future?
P.S. 2: Referring the anti-piracy treaty #ACTA to the Court of Justice of the European Union (CJEU) marks a lull in the proceedings, but not an end to the political battle. A few moments ago, the petition launched by @Avaaz for the European Parliament (and the national parliaments) to reject ACTA had already been signed by 2,422,421 netizens, but more are welcome until the official burial.
Tomorrow, Saturday 25 February 2012, European netizens join forces through more than 150 demonstrations for open and democratic legislation and Internet freedoms. In Finland Stop ACTA Helsinki convenes in front of the Central Railway Station at 14:00 hours.
The discussion was kicked off by foreign minister Erkki Tuomioja, who is also the chair of Attac Parliament, and by professor Heikki Patomäki, who is one of the three chairpersons of Attac Finland. Between professor Magnus Ryner, who is a political economist, and the researcher Kenneth Haar, who represents the Corporate Europe Observatory, I made a presentation titled The New Stability Union: Implications for Transparency and Democracy, offering my views from the perspective of an EU citizen.
This blog post and a string of later ones are based on my speech, which I began by asking:
Where are we going in terms of transparency and democracy?
My short answer is: from bad to worse, at least in the short term.
However, some of you might want to know why and how.
Transparency
I'll begin by looking at transparency, or openness, in the European Union, in general, with regard to economic policy and concerning the new stability union, the so called fiscal compact.
The Treaty of Lisbon entered into force on 1 December 2009, so we have seen the new EU ground rules in action for a little more than two years.
The start is quite promising. Right at the top, in Article 1 of the Treaty on European Union, we are told:
This Treaty marks a new stage in the process of creating an ever closer union among the peoples of Europe, in which decisions are taken as openly as possible and as closely as possible to the citizen.
Let us now put ourselves in the role of the trusting citizen, who takes this promise of a maximum of openness and closeness at face value.
Instead of building theoretical castles, he or she takes a closer look at economic policy making and the birth of the stability union in the light of available public information.
During these last two years, no questions have been more central to the economic wellbeing of European citizens than the ongoing multiple crises in the eurozone, the efforts to contain the effects and to return to a path towards economic growth and new jobs.
For the sake of brevity, I am going back in history only to the December 2011 summits. The heads of state or government of the euro area countries issued a statement (9 December 2011), where they announced future action in two directions:
- a new fiscal compact and strengthened economic policy coordination;
- the development of stabilisation tools to face short term challenges.
The statement itself contained main points about the common understanding, but no exact documentary references.
How about the guarantees for openness during the operations to contain and to overcome the crises?
Eurogroup
The informal Eurogroup, where finance ministers meet ”to discuss questions related to the specific responsibilities they share with the single currency”, is at least referred to in a protocol (No 14) annexed to the Treaties.
Euro Summit
The eurozone summits have just been convened without any particular legal basis. The Euro Summit has now been institutionalised, turned into a permanent feature with at least biannual meetings and a permanent president.
The Euro Summit is currently based only on the conclusions of the eurozone heads of state or government themselves (Euro Summit statement 26 October 2011, paragraphs 30-33 and Annex 1), although the so called fiscal compact tries to catch up with reality (Article 12 TSCG).
Good governance and transparency?
We are looking at economic policy making for the euro area, which consists of 17 countries, with a total population of 332 million people (Eurostat) – bigger than the home of the US dollar, with 313 million (US Census Bureau).
What do we have? Now we have not only one, but two informal conclaves preparing and agreeing on crucial issues in the dark, before they give the public a rough outline of what has been agreed (if not formally decided).
Ralf Grahn
speaker on EU affairs, especially digital policy and law
P.S. 1: For better or for worse, between the global issues and the national level, the European Union institutions and the eurozone coteries shape our future. More than 900 euroblogs are aggregated by multilingual Bloggingportal.eu. Is your blog already listed among them? Are you following the debates which matter for your future?
P.S. 2: Referring the anti-piracy treaty #ACTA to the Court of Justice of the European Union (CJEU) marks a lull in the proceedings, but not an end to the political battle. A few moments ago, the petition launched by @Avaaz for the European Parliament (and the national parliaments) to reject ACTA had already been signed by 2,422,421 netizens, but more are welcome until the official burial.
Tomorrow, Saturday 25 February 2012, European netizens join forces through more than 150 demonstrations for open and democratic legislation and Internet freedoms. In Finland Stop ACTA Helsinki convenes in front of the Central Railway Station at 14:00 hours.
Thursday, 12 January 2012
Denmark: EU Council presidency with opt-outs
The previous Grahnlaw post mentioned three of the Danish EU opt-outs. Let us take a brief look at all of them.
Danish opt-outs
At least on paper, Denmark looks like Britain, having four opt-outs from European co-operation. These opt-outs concern defence policy, justice and home affairs, the euro and union citizenship, the Folketinget (parliament) mentions in its presentation.
Earlier governments as well as the current one, led by Helle Thorning-Schmidt, have toyed with the idea to scrap one or more of the opt-outs. It would be in the national interest according to the Danish Institute for International Studies (DIIS), but the politicians have not yet braved the uncertain outcome of a national referendum.
The atmosphere in Denmark is much more cooperative, constructive and positive than in the United Kingdom, where obstructionism, vetoes, repatriation of powers and calls for secession compete for the top spot, interspersed by occasional reminders about the importance of the internal market for British jobs and businesses.
Fiscal pacts and Schengen
Denmark participates in the Euro Plus Pact and in the negotiations aiming at a new, intergovernmental fiscal compact. The UK remains outside the first and has forced the intergovernmental route for the second.
Denmark is also a part of the Schengen Area with common external borders and free travel inside.
***
The NYT IHT offers a description of Denmark's position at the beginning of the Council presidency.
Ralf Grahn
Danish opt-outs
At least on paper, Denmark looks like Britain, having four opt-outs from European co-operation. These opt-outs concern defence policy, justice and home affairs, the euro and union citizenship, the Folketinget (parliament) mentions in its presentation.
Earlier governments as well as the current one, led by Helle Thorning-Schmidt, have toyed with the idea to scrap one or more of the opt-outs. It would be in the national interest according to the Danish Institute for International Studies (DIIS), but the politicians have not yet braved the uncertain outcome of a national referendum.
The atmosphere in Denmark is much more cooperative, constructive and positive than in the United Kingdom, where obstructionism, vetoes, repatriation of powers and calls for secession compete for the top spot, interspersed by occasional reminders about the importance of the internal market for British jobs and businesses.
Fiscal pacts and Schengen
Denmark participates in the Euro Plus Pact and in the negotiations aiming at a new, intergovernmental fiscal compact. The UK remains outside the first and has forced the intergovernmental route for the second.
Denmark is also a part of the Schengen Area with common external borders and free travel inside.
***
The NYT IHT offers a description of Denmark's position at the beginning of the Council presidency.
Ralf Grahn
Saturday, 10 December 2011
European Council: UK's heroic obstructionism?
It was not much the other EU member states asked for, but UK prime minister David Cameron and deputy prime minister Nick Clegg were unwilling or unable to allow the eurozone to proceed with a treaty fix to strengthen economic coordination within the euro area.
A responsible member state government would have given a helping hand, by signing the agreement and its parliament would have nodded through ratification (a simple laissez-passer). End of story.
The United Kingdom, however, was mean-spirited and obstructionist, even if the agreement would not have altered its relationship with the EU, only given the willing member states the opportunity to advance.
Mass market media have elevated the prime minister to Churchillian proportions, totally forgetting that putting out fires in the eurozone (with Britain a close neighbour) and the global financial system is a civilian rescue operation completely different from defending your country from foreign invasion. Actually, it is in Britian's interest.
After this we have to wonder, are there any rational voices left? At least well wishes have a hollow ring, when accompanied by gratuitous acts of sabotage.
A blog roundup gives us some indications.
Blogs etc.
On Global Dashboard, Britain and Europe after the veto discusses various consequences for the United Kingdom in an instructive manner.
The Labour leader Ed Miliband mostly seems content to accuse prime minister Cameron of failure to defend the interests of Britain, its financial industry and export businesses, but he is extremely thin on what a Labour government would do.
Timothy Garton Ash sees the split between the vast majority (at least 23 countries) and Britain as a turning point in history, even if the eurozone has plenty of crises to come. Cameron has not served British long term interests, but Europe will be weakened too: David Cameron's 'no' is bad for Britain and for Europe.
At the end of the day it is always the kids who end up paying the price of a messy divorce, says Mojo Working.
The United Kingdom of Great Britain and Northern Ireland never saw itself as European, but the fiscal compact means a first step on the road towards greater unity, says Dadefinspeaking (in Spanish).
Jason O'Mahony portrays The British eurosceptic as a maligned victim, adding a lighter touch to the überserious discussion, but correctly accuses the unrepresentative UK political system of failure.
Éoin Clarke puts a different spin on the matter on Liberal Conspiracy by arguing in purely domestic terms why Cameron's No is a vote-winner.
I on Europe sees Britain isolating itself in a story with enough general background on European integration to fill in for instance US readers: Europe forges fiscal union, sees way out of crisis.
Michael Heaver, who among other things dislikes the EU, questions what exactly Cameron delivers, since no powers are repatriated.
Even the UK's usual allies in the American media were aghast, the Gulf Stream Blues blog chips in: 9 December 2011: The day Britain left Europe.
The European Union Law presents the main components of the new fiscal compact and the toxic role of the United Kingdom: What's Behind the New Eurozone Fiscal Stability Union?
The Independent has a list of quotes which show that people in or close to Cameron's government publicly support his rejection at the EU summit.
Kosmopolito discusses Cameron's diplomatic failure, since his demands had nothing to do with the issues on the agenda and nobody knew about his demands in advance. ”Moreover, Cameron has no allies whatsoever.” The post deals with many of the salient points.
If Cameron had signed the treaty offered, then the opposition and his own party would have launched a further attack on his leadership, says Tom Scholes-Fogg.
Noëlle Lenoir discusses Camerons No to the fiscal compact at the European Council and his withdrawal from the discussions about the alternative, an intergovernmental treaty. She takes note of different steps the United Kingdom and the Tories have taken towards the outer rim of Europe. On the other hand, chancellor Angela Merkel has imposed her will (including the limits on action) on the rest of the members (in French).
Ralf Grahn
A responsible member state government would have given a helping hand, by signing the agreement and its parliament would have nodded through ratification (a simple laissez-passer). End of story.
The United Kingdom, however, was mean-spirited and obstructionist, even if the agreement would not have altered its relationship with the EU, only given the willing member states the opportunity to advance.
Mass market media have elevated the prime minister to Churchillian proportions, totally forgetting that putting out fires in the eurozone (with Britain a close neighbour) and the global financial system is a civilian rescue operation completely different from defending your country from foreign invasion. Actually, it is in Britian's interest.
After this we have to wonder, are there any rational voices left? At least well wishes have a hollow ring, when accompanied by gratuitous acts of sabotage.
A blog roundup gives us some indications.
Blogs etc.
On Global Dashboard, Britain and Europe after the veto discusses various consequences for the United Kingdom in an instructive manner.
The Labour leader Ed Miliband mostly seems content to accuse prime minister Cameron of failure to defend the interests of Britain, its financial industry and export businesses, but he is extremely thin on what a Labour government would do.
Timothy Garton Ash sees the split between the vast majority (at least 23 countries) and Britain as a turning point in history, even if the eurozone has plenty of crises to come. Cameron has not served British long term interests, but Europe will be weakened too: David Cameron's 'no' is bad for Britain and for Europe.
At the end of the day it is always the kids who end up paying the price of a messy divorce, says Mojo Working.
The United Kingdom of Great Britain and Northern Ireland never saw itself as European, but the fiscal compact means a first step on the road towards greater unity, says Dadefinspeaking (in Spanish).
Jason O'Mahony portrays The British eurosceptic as a maligned victim, adding a lighter touch to the überserious discussion, but correctly accuses the unrepresentative UK political system of failure.
Éoin Clarke puts a different spin on the matter on Liberal Conspiracy by arguing in purely domestic terms why Cameron's No is a vote-winner.
I on Europe sees Britain isolating itself in a story with enough general background on European integration to fill in for instance US readers: Europe forges fiscal union, sees way out of crisis.
Michael Heaver, who among other things dislikes the EU, questions what exactly Cameron delivers, since no powers are repatriated.
Even the UK's usual allies in the American media were aghast, the Gulf Stream Blues blog chips in: 9 December 2011: The day Britain left Europe.
The European Union Law presents the main components of the new fiscal compact and the toxic role of the United Kingdom: What's Behind the New Eurozone Fiscal Stability Union?
The Independent has a list of quotes which show that people in or close to Cameron's government publicly support his rejection at the EU summit.
Kosmopolito discusses Cameron's diplomatic failure, since his demands had nothing to do with the issues on the agenda and nobody knew about his demands in advance. ”Moreover, Cameron has no allies whatsoever.” The post deals with many of the salient points.
If Cameron had signed the treaty offered, then the opposition and his own party would have launched a further attack on his leadership, says Tom Scholes-Fogg.
Noëlle Lenoir discusses Camerons No to the fiscal compact at the European Council and his withdrawal from the discussions about the alternative, an intergovernmental treaty. She takes note of different steps the United Kingdom and the Tories have taken towards the outer rim of Europe. On the other hand, chancellor Angela Merkel has imposed her will (including the limits on action) on the rest of the members (in French).
Ralf Grahn
UK flunked in Europe
If blocking an EU treaty fix between 27 members and complicating the euro rescue mission was not the finest hour of UK prime minister David Cameron and deputy prime minister Nick Clegg, what was it?
Sony Kapoor of Re-Define flunked both the European Council and UK government.
The NYT IHT discusses the pros and cons of UK government the wisdom with regard to the future of the City: In Rejecting Treaty, Cameron Is Isolated.
Spiegel Online International tries to make David Cameron's acting against a background of anti-EU sentiment comprehensible for European readers, while preparing them for the next British blockades: The Man Who Said No to Europe.
PlaceLux.EU tries alternative history writing by exploring: How Cameron's kamikaze act could have been prevented.
MarketWatch was fairly upbeat about the fiscal compact between the EU member states minus Britain, but cautious about the ECB stepping up to the huge task of calming sovereign bond markets: New EU deal leaves ECB nowhere to hide.
Before the number of fiscal compact participants shrinks back somewhat, The Guardian noted Britain's unprecedented loneliness in the European Union: UK isolation grows as three more countries reconsider eurozone treaty.
The Economist has covered the EU summit(s) from a number of angles, naturally keen to discuss domestic British issues. From Bagehot's notebook: The moment, behind closed doors, that David Cameron lost his EU argument last night.
Earlier in the day, Bagehot had written: Britain, not leaving but falling out of the EU. If you have ever had doubts about the Britishness of The Economist, read: 'we have started falling out'. Bagehot sees Cameron's No as an indication of his weakness within his own party, which led him to walk away empty-handed, but the blog post also offers a detailed discussion about different aspirations in the UK and Europe.
Charlemagne's notebook contributed with Europe's great divorce, right after the fateful all-nighter in Brussels.
Ralf Grahn
Sony Kapoor of Re-Define flunked both the European Council and UK government.
The NYT IHT discusses the pros and cons of UK government the wisdom with regard to the future of the City: In Rejecting Treaty, Cameron Is Isolated.
Spiegel Online International tries to make David Cameron's acting against a background of anti-EU sentiment comprehensible for European readers, while preparing them for the next British blockades: The Man Who Said No to Europe.
PlaceLux.EU tries alternative history writing by exploring: How Cameron's kamikaze act could have been prevented.
MarketWatch was fairly upbeat about the fiscal compact between the EU member states minus Britain, but cautious about the ECB stepping up to the huge task of calming sovereign bond markets: New EU deal leaves ECB nowhere to hide.
Before the number of fiscal compact participants shrinks back somewhat, The Guardian noted Britain's unprecedented loneliness in the European Union: UK isolation grows as three more countries reconsider eurozone treaty.
The Economist has covered the EU summit(s) from a number of angles, naturally keen to discuss domestic British issues. From Bagehot's notebook: The moment, behind closed doors, that David Cameron lost his EU argument last night.
Earlier in the day, Bagehot had written: Britain, not leaving but falling out of the EU. If you have ever had doubts about the Britishness of The Economist, read: 'we have started falling out'. Bagehot sees Cameron's No as an indication of his weakness within his own party, which led him to walk away empty-handed, but the blog post also offers a detailed discussion about different aspirations in the UK and Europe.
Charlemagne's notebook contributed with Europe's great divorce, right after the fateful all-nighter in Brussels.
Ralf Grahn
UK in Europe: This was their finest hour?
If John Bunyan described The Pilgrim's Progress towards the Celestial City, I have depicted the Cameron's regress from bystander through growing weakness to near-isolation in European affairs.
Rejoice, Rejoice
The surreal atmosphere in England is illustrated by EUbusiness: British eurosceptic press jubilant at EU treaty veto.
Here is a German roundup of the British press, by Sandra Fiene (ZDF).
(Let me add that there is nothing sceptic about eurosceptics, led by campaigning anti-EU media aiming at poisoning Britain's EU relatiosnhip until the day of UK secession. Thus, I only use the euphemism in direct quotes.)
These are the sentiments prime minister David Cameron and deputy prime minister Nick Clegg have decided to placate, instead of even allowing the fiscal compact to take shape within the EU framework.
This was their finest hour?
Thinking writers
Let me offer you a roundup of a few actors, thinkers and writers I respect, many of them British citizens (if the concept does not appear too alien) or residents. I won't refer to the contents much, but hope that you take time to read and think.
From free market Sweden, with its own difficulties to remain close to the EU core, foreign minister Carl Bildt - @carlbildt on Twitter – tweeted this:
Bildt linked to the blog post by Charles Grant, of the Centre for European Reform (CER): Britain on the edge of Europe.
On the CER blog, Simon Tilford mentions Britain only in passing, but his pessimistic assessment of the euro salvage operation is a reminder that Europe needs people outside the governments and institutions willing to discuss the big picture: EU summit: Enough to save the euro?
Just ahead of the fateful summit dinner, The European Citizen set out Britain's Bad Negotiating Position, questioning the repatriation strategy amidst potential euro meltdown (although the power to block financial regulation turned out to be the rabbit Cameron pulled out of his hat).
On the British Politics and Policy at LSE blog the headline by Simon Hix offered a shortcut to the conclusions: David Cameron's EU treaty veto is a disaster for Britain. But do read his reasoning.
Also on the LSE blog, Olaf Cramme saw David Cameron going to Brussels ill prepared and under domestic pressure: Cameron's pandering to euroscepticism and the illusionary 'national interest' is a failure of leadership and leaves Britain in a lose-lose situation.
Ralf Grahn
Rejoice, Rejoice
The surreal atmosphere in England is illustrated by EUbusiness: British eurosceptic press jubilant at EU treaty veto.
Here is a German roundup of the British press, by Sandra Fiene (ZDF).
(Let me add that there is nothing sceptic about eurosceptics, led by campaigning anti-EU media aiming at poisoning Britain's EU relatiosnhip until the day of UK secession. Thus, I only use the euphemism in direct quotes.)
These are the sentiments prime minister David Cameron and deputy prime minister Nick Clegg have decided to placate, instead of even allowing the fiscal compact to take shape within the EU framework.
This was their finest hour?
Thinking writers
Let me offer you a roundup of a few actors, thinkers and writers I respect, many of them British citizens (if the concept does not appear too alien) or residents. I won't refer to the contents much, but hope that you take time to read and think.
From free market Sweden, with its own difficulties to remain close to the EU core, foreign minister Carl Bildt - @carlbildt on Twitter – tweeted this:
A very pessimistic analysis by a very competent observer on the consequences of marginalizing oneself in Europe.
Bildt linked to the blog post by Charles Grant, of the Centre for European Reform (CER): Britain on the edge of Europe.
On the CER blog, Simon Tilford mentions Britain only in passing, but his pessimistic assessment of the euro salvage operation is a reminder that Europe needs people outside the governments and institutions willing to discuss the big picture: EU summit: Enough to save the euro?
Just ahead of the fateful summit dinner, The European Citizen set out Britain's Bad Negotiating Position, questioning the repatriation strategy amidst potential euro meltdown (although the power to block financial regulation turned out to be the rabbit Cameron pulled out of his hat).
On the British Politics and Policy at LSE blog the headline by Simon Hix offered a shortcut to the conclusions: David Cameron's EU treaty veto is a disaster for Britain. But do read his reasoning.
Also on the LSE blog, Olaf Cramme saw David Cameron going to Brussels ill prepared and under domestic pressure: Cameron's pandering to euroscepticism and the illusionary 'national interest' is a failure of leadership and leaves Britain in a lose-lose situation.
Ralf Grahn
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:
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:
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
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
Friday, 9 December 2011
New ”fiscal compact” for eurozone (2 x updated)
How can anyone defend (or even call for more) intergovernmental solutions to common problems at the European level, or even tolerate the EU our leaders and their predecessors have built?
With democratic government and sufficient powers the European Union, the eurozone and we would not be in this impotent mess.
Well, upon leaving Mario Draghi, the president of the European Central Bank (ECB) called it a very good outcome for the euro area countries, although the deal has to be fleshed out in the coming days.
The European Council dinner finally broke up and after 5 o'clock Friday morning (local time) the announced press conference of European Council and Euro Summit president Herman Van Rompuy and Commission president José Manuel Barroso took place.
Update 9 December 2011: Herman Van Rompuy's written statement has now been posted, and it offers more detail.
Update 2, 9 December 2011: Statement by the euro area heads of state or government (9 December 2011; 7 pages). This is the paper to read, both for actions and blank spaces.
A ”new fiscal compact” is the novel Sesame between 17 eurozone members and six others, an intergovernmental agreement between 23 member states (perhaps more).
Self-imposed structural weaknesses force the leaders to continue on the road of intergovernmentalism, although credible and sustainable solutions need durable and legitimate foundations.
The United Kingdom is clearly a problem, not a part of the solution, as shown by the Financial Times report on prime minister David Cameron's demands for Britain to be able to be excepted from regulation of a crucial part of the internal market, financial services.
Thus, Cameron wants to undermine the integrity of the internal market.
Ralf Grahn
With democratic government and sufficient powers the European Union, the eurozone and we would not be in this impotent mess.
Well, upon leaving Mario Draghi, the president of the European Central Bank (ECB) called it a very good outcome for the euro area countries, although the deal has to be fleshed out in the coming days.
The European Council dinner finally broke up and after 5 o'clock Friday morning (local time) the announced press conference of European Council and Euro Summit president Herman Van Rompuy and Commission president José Manuel Barroso took place.
Update 9 December 2011: Herman Van Rompuy's written statement has now been posted, and it offers more detail.
Update 2, 9 December 2011: Statement by the euro area heads of state or government (9 December 2011; 7 pages). This is the paper to read, both for actions and blank spaces.
A ”new fiscal compact” is the novel Sesame between 17 eurozone members and six others, an intergovernmental agreement between 23 member states (perhaps more).
Self-imposed structural weaknesses force the leaders to continue on the road of intergovernmentalism, although credible and sustainable solutions need durable and legitimate foundations.
The United Kingdom is clearly a problem, not a part of the solution, as shown by the Financial Times report on prime minister David Cameron's demands for Britain to be able to be excepted from regulation of a crucial part of the internal market, financial services.
Thus, Cameron wants to undermine the integrity of the internal market.
Ralf Grahn
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