Eurozone rushes ahead

Ireland is expressing some disquiet about the domestic impact of decisions taken in Brussels, particularly regarding the bailout of the Irish banks whose collapse brought on the economic crisis across the country. Understandably, the Irish Independent is voicing its pessimism over the outcome of the European Council:

“The much-touted summit in Brussels today appears to have failed before it starts. It looks like it will not be possible to get agreement on the main item – increasing the effective lending capacity of the EU rescue fund from €250bn to €440bn. The word is that it may be June before agreement is possible.”

In the meantime, the paper notes, the “biggest issue” on the table is the state of the banks on the eve of a new series of stress tests that will gauge their ability to absorb the financial shocks. The tests “may well show that further losses in the Irish banks will be too much even for the €35bn allocated in the EU/IMF deal.”

In Poland, Dziennik Gazeta Prawna raises the spectre of a two-tier economic union that may emerge from the summit, transforming the monetary union into a fiscal union in which states that do not use the euro will lose their influence over the economic policy of the EU.

“The economic union of the euro zone will be formalised at today's summit. The architects of the pact are Germany and France, who insist that it is the only way to overcome the debt crisis.”

According to one expert quoted by the Warsaw daily, the deal is as simple as this:

“Germany is willing to save member states threatened by insolvency. In exchange, the debtor must give up some of its sovereignty. Some countries, like Sweden and the United Kingdom, are worried that Europe is being driven towards a hyper-regulated capitalism. Others, like Poland, Denmark, Lithuania, Bulgaria and Romania, want to join [the Euro Pact] to avoid being relegated to the margins of the EU.”

That is the risk denounced by Bucharest daily Jurnalul naţional, which warns against the danger that the Europact, even if it only concerns the countries of the eurozone, will be misunderstood by countries outside the single currency, such as Sweden, Romania and Poland, who might be tempted to see it as a substitute for euro membership:

“Romania must remain cautious [...]. Our national interest is to bridge the gap between Romania and the countries of western Europe. Our salaries are five times lower and we have the most significant inflation in the EU. The pact means after austerity, more austerity, more difficulty in bridging equally the gaps [between member states] in terms of infrastructure investments, and it even means reducing the capacity to absorb the European funds”.

Swedish doubts are voiced by Aftonbladet, which is outraged by what it sees coming in the Europact: further meddling of European institutions in the internal affairs of member states, particularly in regard to wage policies.

“The proposal to coordinate European economies gives the Commission, among other things, the right to monitor wage trends. This is unacceptable. Swedish salaries are decided between employees and employers and should be decided neither in Brussels nor in Rosenbad [the seat in Stockholm of the Swedish government]. The proposal is not just bad for Sweden – it’s bad for Europe.”

Hyperregulation, interference, and a democratic deficit to boot, adds Der Standard. The Vienna daily concludes that the new rules of the game being discussed in Brussels will affect the lives of Europeans without any consultations even having been offered to them:

“It starts with the necessary reform of the European treaties. It will then be hastened along by a 'simplified procedure’, which will bypass referenda. Similarly, during the rescue operations, finance ministers will decide behind closed doors. With the involvement of the European Parliament? No. It’s not welcome. Under the supervision of the Court of Auditors? No. That’s not necessary. Anyway, this is only 500 billion euros. Faced with such an interpretation of democracy, we should not be surprised that the demagogues have the wind in their sails.”