They are burying the federal ideal

If the euro crisis has one merit, it has been to put the construction of Europe back on the agenda. Before the crisis, the reopening of the Pandora’s box of a renegotiation of the treaties was completely out of the question, but now progress on institutional reform is once again a priority. The crux of the issue is to reach agreement on the Europe that we want for the future and the measures that can be successfully adopted.

As the Eurozone is in danger, ensuring a more integrated monetary union for its 17 members is clearly a priority. This is already underway with the establishment of real economic governance in the Eurozone and the coordination of budgetary and fiscal policies.

Mister Eurozone

In difficult times, governments are more eager to recognise the necessity for progress. France and Germany have moved ahead, and aim to lead by example. In January 2013, the 50th anniversary of the Elysée Treaty is set to become a milestone in the history of Franco-German integration.

In spite of the difficulties they have encountered in their relationship, Angela Merkel and Nicolas Sarkozy have succeeded in establishing a core alliance between their countries in the course of dealing with the Eurozone crisis.

The predominant involvement of Europe’s two leading economies has been vital. At the same time, the increasing importance of the intergovernmental method, which has already overtaken the community method that prevailed during the period when the Commission was the main motor of integration, has been confirmed.

Berlin and Paris have become more central to Europe than Brussels, which has now been consigned to a more administrative role -- a reality that is not really reflected by the federal ideal.

This is a development that small countries will always have difficulty accepting: and the Dutch proposal to appoint an additional European commissioner with a brief to supervise the budgets of countries in difficulty, which have requested assistance from the European Financial Stability Facility, is a testament to this fact.

Under the leadership of Paris and Berlin, the consolidation of the monetary union has reinforced the weight of member states, a development that is also evident in the appointment of Herman Van Rompuy as the future “Mister Eurozone.”

New division

The desire to establish greater “democratic control” over Eurozone decisions, which has notably been voiced by Germany, will have to be adressed. A large number of ideas as to how this should be achieved have already been presented.

One option that does not involve the creation of a new parliamentary assembly, which has been suggested by the founder of the EuropaNova think tank, Guillaume Klossa, is to create an authority that would bring together MPs from national governments and MEPs, who are members of various commissions.

It is also interesting to note the extent to which the British, who are not involved in the euro, have remained indifferent to efforts to boost the integration of Eurozone countries, while David Cameron’s increasingly eurosceptic government is apparently unworried by the prospect that London will be sidelined by procedures for the taking of important economic decisions for the continent.

At the same time, other countries have voiced their concern over the possible emergence of a “two-speed” Europe. Sweden, which is also not involved in the Eurozone, is a case in point. In an article published byFrankfurter Allgemeine Zeitung, Anders Borg and Carl Bildt, Sweden’s Prime Minister and Minister for Foreign Affairs, deplored “the emergence of a new division” between European countries, before treacherously suggesting that if a “two speed” Europe is established, peripheral countries with more liberal economic policies which are more oriented towards competitiveness will stand to benefit more than core countries, at least in terms of economic growth…

Behind the Scenes

All bets off at the EU summit

Angela Merkel and Nicolas Sarkozy are playing “European roulette” over the rescue of the euro, leads the Berlin weeklyDer Freitag. And according to the Süddeutsche Zeitung, all bets are off between the main players at the eurozone summit on ​​23 October. The European leaders “are behaving so irrationally,” the Munich daily writes, “that the outcome of the most important meeting to be held since the beginning of the crisis remains completely uncertain.”

Two versions of the encounter between Merkel and Sarkozy in Frankfurt on October 19 are making the rounds. The Elysee Palace, writes the Freitag, is denying any conflict over the issue of the ECB, giving assurances that the French president “left his wife's side as she was giving birth only to coordinate the negotiating line to be taken with Merkel to persuade the rest of the countries of the rightness of the German plan to increase the firepower of the European bailout fund. [...]

However - “To this the diplomats in Berlin responded with a smile. The participants who were at the meeting speak, rather, of a memorable evening. Sarkozy and Merkel argued openly, and the news of the birth of a daughter did not even prompt Merkel to embrace Sarkozy. The two parted without a word.”

The bad mood is not limited to the Franco-German duo, however, notes theSüddeutsche Zeitung. “The European Commission does not fail to report every day new proposals aimed at getting under control the so-called enemies of the euro. [...] Hundreds of pages are waiting to be read and understood. On the other hand, it's the lack of pages that is a problem.”

The report of the troika (ECB, the European Commission and the IMF), which was supposed to have been sent on Tuesday, October 18 and contains the recommendations of the experts on the release of the next tranche of aid to Greece, did not arrive until Thursday.

“And it's missing the key detail: on page 29 of the 106 pages, there's an empty box where the inspectors were to write their conclusion as to whether Athens can pay its debts. The Commission is keeping quiet. Behind closed doors, however, there's a admission that the troika is divided on this issue.”