EUCO: Fiscal compact TSCG

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?

Eurozone: Credible Greece?

Each of the Europan finance ministers fights a war for stability (and sustainable growth propects) on the home front, intrinsically linked with the efforts in the other EU member states, at European Union (eurozone) level and globally.

The ministers meet in the Economic and Financial Affairs Council (Ecofin) Tuesday 8 November 2011, after the meeting of the Euro Group this evening, to take stock of developments and to chart a route to safety.

Yesterday, we looked at the background and gaps and filled the Ecofin file with recent EU and eurozone declarations.

There is more drama in the air than most of the ministers, market players and ordinary people would care for. We are all anxiously following Greece.


Greece

According to Bloomberg, the main party leaders George Papandreou and Antonis Samaras have finally agreed to hold talks on a new government, a first step.

A new administration would be sworn in and a confidence vote held within a week if all went well, BBC News Europe reports, quoting a Greek government spokesman. - The cliffhanger is not over yet.

The Greek political leadership has unsettled nerves globally, and trust levels are low. Reuters Canada reports that Asian markets were falling this morning, despite the announcement on coalition talks.

In yet another enexpected move, the Greek government had terminated the contract with the three banks advising on the 50 per cent write-down of Greek public debt (euphemistically called Private Sector Involvement PSI), as reported by Market Watch.

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From a promise of talks, the Greek population and the world expect a deal on the leader and the composition of a new government, certainty about the ratification and implementation (or not) of the rescue deal and knowledge about the early election.

The caretaker or interim government did not appear before the markets opened.

With or without bankruptcy and with hardships set to continue, the Greek people have to settle on a course of political and economic stability, as well as competitiveness for sustainable growth in the real world of the global economy.

For the time being, most of us – inside and outside - continue to be unwilling passengers on a Greek bus racing along mountain roads with competing drivers.



Ralf Grahn

EU Treaty of Lisbon: CFSP special representative

The Treaty of Amsterdam gave the European Union an important common foreign and security policy tool: the special representative. The EU has been able to appoint special representatives with a mandate to act on behalf of the Union ‘on the ground’. The special representatives have been appointed by the Council, especially to trouble spots where the EU strives to achieve peace and stability.

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In the Treaty of Lisbon (OJ 17.12.2007 C 306/29) the intergovernmental conference (IGC 2007) decided to amend the Treaty on European Union (TEU) in the following manner:

36) The text of Article 17 shall become Article 28 A, it shall be amended as set out below in point 49.

37) Article 18 shall be amended as follows:

(a) paragraphs 1 to 4 shall be deleted;

(b) in paragraph 5, which shall not be numbered, the words "whenever it deems it necessary," shall be replaced by "on a proposal from the High Representative of the Union for Foreign Affairs and Security Policy" and the following sentence shall be added at the end: "The special representative shall carry out his mandate under the authority of the High Representative.".

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In the existing Article 18 TEU (latest consolidated version OJ 29.12.2006/17 and 18) the first four paragraphs, which concern the rotating Presidency to be abolished by the High Representative as chair of the Foreign Affairs Council, are deleted, so there is no need to set them out here. Article 18(5) reads as follows:

“5. The Council may, whenever it deems it necessary, appoint a special representative with a mandate in relation to particular policy issues.”

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As a consequence, the new consolidated Article 18 TEU should look like this:

Article 18

The Council may, on a proposal from the High Representative of the Union for Foreign Affairs and Security Policy, appoint a special representative with a mandate in relation to particular policy issues. The special representative shall carry out his mandate under the authority of the High Representative.

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The Convention, led by Valéry Giscard d’Estaing, proposed in the draft Treaty establishing a Constitution for Europe Article III-203 (OJ 18.7.2003 C 169/67) that the appointment should take place on the initiative of the Union Minister for Foreign Affairs and carry out his or her mandate under the authority of the same Minister.

In essence, this provision was taken over in the Treaty establishing a Constitution for Europe, as Article III-302.

The Reform Treaty retains the substance of the Constitutional Treaty, but the ‘Union Minister for Foreign Affairs’ has been renamed the ‘High Representative of the Union for Foreign Affairs and Security Policy’, as elsewhere in the Lisbon Treaty.

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Here are a few fresh examples of Council decisions concerning EU special representatives. As we see, the mandates have been in the form of joint actions:

Council Joint Action 2007/809/CFSP of 6 December 2007 amending Joint Action 2007/108/CFSP extending the mandate of the European Union Special Representative for Sudan

Council Joint Action 2007/805/CFSP of 6 December 2007 appointing a European Union Special Representative to the African Union

Council Joint Action 2007/748/CFSP of 19 November 2007 amending Joint Action 2007/87/CFSP amending and extending the mandate of the European Union Special Representative in Bosnia and Herzegovina

Council Joint Action 2007/744/CFSP of 19 November 2007 amending and extending Joint Action 2006/623/CFSP on the establishment of an EU team to contribute to the preparations of the establishment of a possible International Civilian Office in Kosovo, including a European Union Special Representative component (ICO/EUSR Preparation Team)

Council Joint Action 2007/732/CFSP of 13 November 2007 amending Joint Action 2007/106/CFSP extending the mandate of the Special Representative of the European Union for Afghanistan

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Coordination in international organisations and at international conferences will be next.


Ralf Grahn


P.S. Do you understand why the amended Article 18 TEU was not written clearly by the IGC 2007?