Report European Council

They’re leading us to the abyss

In Brussels, 28/29 October, France and Germany will try to persuade their EU partners to modify some of the EU's cornerstone texts in order to create a culture of budgetary rigour. A simplistic and useless idea, according to a Spanish editorialist.

Published on 28 October 2010 at 14:46

A month ago, at the monastery of Sant Benet de Bages, Felipe González admonished a bunch of businessmen handpicked by the ESADE business school: "We’ve spent too much time distracted by the European Union: let’s keep them from fiddling any further with the treaties because, as far as I can see, anyone will be able to block their reform.”

He was dead right. Yet another reform, now, when the previous one has only just gone into effect? More Irish referendums, Czech blackmail and institutional snoozing on the job? How frivolous and tiresome, what a navel-gazing waste of time, what a recipe for paralysis!

Create a European Monetary Fund, terrific idea. But reforming the treaty to that end – and to add sanctions – would be a waste of time. Or worse. But Berlin and Paris don’t see it that way. They think they can impose a quick reform to beef up the euro stability pact, but even simplified reforms have to win enough votes to pass.

The EU summit opening today will give its blessing – or not – to the new economic sanctions. There’s no problem there aside from their lack of credibility: seeing as the sanctions are not automatic, it doesn’t occur to anyone that one day they might apply to France and Germany, just as the old sanctions were never applied when the two states breached the austerity diktat in 2003–2005.

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Do we need to reform the Treaty to make these changes?

Moreover, the summit will examine the Franco-German proposal of reforming the Lisbon Treaty to give permanent form to the rescue fund (€750 billion) that was approved in May to bail out countries drowning in their own sovereign debt. The object is a bona fide European Monetary Fund (EMF). That’s truly fantastic news. The assembled heads of state and government will also thrash out the idea of penalising those who fail to meet the Maastricht criteria. Should their voting rights be suspended? That’s debatable, seeing as an economic failing calls for a financial penalty, not a political one.

Do we need to reform the Treaty to make these two changes? Yes, as regards suspending voting rights for fiscal failings. All the same, it is ironic that this proposal should be made by France, which frankly should have been brought to book for infringements of “respect for human rights, including the rights of persons belonging to minorities" (Treaty on European Union article 2) and stripped of its voting rights under the terms of article 7 for "clear risk of a serious breach by a Member State” of those democratic “values”. In a word, it would be a frivolous waste of time to reform the Treaty to safeguard an important but minor value, namely that of fiscal orthodoxy.

Karlsruhe has issued four rulings

Furthermore, no Treaty changes are needed to set up an EMF. Before its predecessor, the temporary bailout fund, was created (for three years) in May, Angela Merkel alleged it would be impossible without changing the Treaty because the German Constitutional Court in Karlsruhe would quash it. But it proved possible, because the creation of such a fund is permissible under article 122 of the Lisbon Treaty.

Karlsruhe has issued four rulings on European Economic and Monetary Union (EMU) and on the EU itself, in each case endorsing the pro-European progress, albeit with certain nationalistic reservations: On 12 October 1993 it backed up the Maastricht Treaty as long as *sovereignty would not be “voided of substance* by the transfer of responsibilities”. On 31 March 1998 it rubber-stamped the transition to the third phase of EMU, which, it said, "is not a matter for the courts, but for Parliament".

On 30 June 2009 it approved the Lisbon Treaty because the latter did not dare to entrust the EU with "the basic determination of the type or amount of taxation to be levied on citizens”, and because it maintained the “essential core of state sovereignty”. And this past 7 May it applauded the Greek bailout “for not jeopardising the monetary union” and because the financial “burden” on Germany would not “cause any fundamental prejudice to the general welfare”. So like as not, Karlsruhe would stick to this line, setting the pace for Berlin to some extent, then ultimately proceeding at its pace.

So why do Angela and Nicolas insist on leading us towards a futile undertaking and, perhaps even worse, towards an abyss?

Translated from the Spanish by Eric Rosencrantz

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