Brussels, 24/03/2010 (Agence Europe) - The European Council summit will be held on Thursday 25 and Friday 26 March with two main issues on the agenda - the EU's new 2020 strategy (not due to be formally adopted until the 17 and 18 June summit) and EU action to counter climate change (see related article). Preparations for the upcoming G20 summit in Toronto, Canada, on 26 and 27 June and economic governance and policy coordination will also be discussed, explains the president of the European Council, Herman Van Rompuy, in his invitation letter to EU leaders. Attention will, of course, focus on Greece, despite the fact that the situation in the country is not on the official agenda. A meeting of heads of state from eurozone countries ahead of the full summit has not yet been confirmed but was described by close European sources on Wednesday 24 March as being on the cards (Van Rompuy is considering it).
After the customary meeting with the president of the European Parliament on Thursday afternoon, the EU's leaders will try to reach agreement on the main aspects of the EU strategy for growth and employment that has been unveiled by the European Commission and discussed by the EU Council of Ministers (see EUROPE 10090 and 10103). The politicians will discuss governance and the grand targets the EU will set for itself. Close sources suggest that various details still need to be sorted out, like what should be done if, when all the national sub-targets are added up, they fail to meet a country's national target. Likewise, although nobody seems to be challenging the overall target of removing 20 million people from the poverty line in the EU, the way poverty is defined still needs to be fine-tuned. The European Council may require further work to be carried out to decide on a coherent definition of poverty. The education targets (reducing school drop-out rates and increasing the number of young people who graduate from higher education) will also be discussed. Federal member states may need more time to set their national targets because powers over education issues are often held by federal bodies.
Over dinner on Thursday, the politicians will hold an initial discussion of preparations for the G20 summit, and the issue will also be discussed at the June European Council ten days ahead of the G20 in Toronto. Felipe González will brief the heads of state on the preliminary conclusions of the reflection group he chairs (see EUROPE 10081) on the coordination of economic policy. Another question will be discussed, not unconnected with the EU 2020 strategy, namely competitiveness gaps among the member states. The meeting of eurozone finance ministers, the Eurogroup, has said that it will be looking at this more regularly (see EUROPE 10099), and the European Council may decide that the option of a new manner of detecting differences and monitoring changes in competitiveness should be examined.
Friday will be devoted to combatting climate change in the wake of the United Nations conference in Copenhagen (see related article) with the aim of breathing new life into the current round of negotiations.
Eurogroup to meet? Aid from IMF? Open questions
On Wednesday afternoon, it was still not clear whether eurozone leaders would be meeting up ahead of the full summit in order to clarify the situation, after weeks of talks and often contradictory statements, about Greece. The aim is to reach clear political agreement and this seems to be emerging, but the details of any deal may be decided at a later date by ministers rather than heads of state.
On Wednesday, EU Economic and Monetary Affairs Commissioner Olli Rehn said that the Commission was encouraging eurozone member states to decide on a mechanism that can be put into action very fast, if necessary, and a Eurogroup meeting would be very useful to this end. Rehn said that if it were possible to have a political decision on this, then he believed it would be useful to have such a meeting. He said the European Commission still preferred aid to be found for Greece in the eurozone but did not want to have a philosophical debate about aid from the IMF because it viewed the IMF as a partner with which it wanted to cooperate and whose expertise it wanted to delve. Any form of action would, he pointed out, require the EU to be in the lead. The idea of joint IMF and eurozone country loans is under discussion. It has not yet emerged whether such a deal could be struck and how it would work, but Germany is reported to be arguing for aid to come from the IMF as a priority, as a way of postponing the question of aid being provided to Greece by other countries in the eurozone until after the upcoming elections in the Land (region) of North Rhein-Westphalia on 9 May 2010.
MEPs want European Summit to show “solidarity” with Greece and endorse the aid mechanism mooted by the European Commission - Criticism of Germany
In the afternoon of Wednesday 24 March, at a debate in plenary at the European Parliament in Brussels on preparations for the European summit of Thursday and Friday this week, all the EP's political parties called on EU heads of state to demonstrate solidarity with Greece and endorse the bilateral aid mechanism suggested by the president of the European Commission. The European Council's official agenda does not yet include the issue, only covering two points (the EU's new economic strategy for 2010 and tackling climate change), but Spanish European Affairs Minister Diego Lopez Garrido, speaking on behalf of the Spanish Presidency of the Council of the EU, said that there was no doubt that the Greek crisis would be added to the agenda. At an informal summit in February 2010, the leaders of the eurozone countries made a political commitment to take determined and coordinated measures, where necessary, to preserve the financial stability of the Eurozone, and he added that if measures were now needed to ensure the stability of Greece then they would be taken.
The president of the European Commission, José Manuel Barroso, said that he didn't see how the EU's leaders could possibly avoid discussing the situation in Greece at the summit, pointing out that the eurozone's leaders had made a political commitment to defend eurozone stability on 11 February 2010. He said the time had come to decide to set up an “instrument for coordinated action” in the eurozone, adding that this would be a “safety net” to reduce the interest rates charged on Greek loans but which would not be automatically activated. EU heads of state had to take action now as a matter of “responsibility and solidarity”, added Barroso, but he said that solidarity was not a one-way street and Greece had to play its part and properly implement reforms and the budget-tightening measures it has pledged. Barroso said that the summit would be a “test of the European leaders and their commitment to Economic and Monetary Union”.
Joseph Daul, leader of the EPP Group at the European Parliament, fully shares Barroso's views. Daul said he expected the European Council to confirm its solidarity with Greece while placing everyone ahead of their responsibilities, adding that solidarity was the alpha and omega of the European project. Daul added that there had been plenty of solidarity at the start of the financial crisis to bail out the banks and solidarity should still be available now to help out “our Greek friends”. Daul explained that a European solution had to be found this week, an EU solution under an EU framework, even if the IMF is involved. Daul backed the ideas mooted by the Commission but said that at the same time, Greece had to introduce the necessary short and medium-term reforms to show that it deserved the support. Germany's Martin Schulz, leader of the Socialist Group (S&D) at the EP, launched a veritable diatribe against Angela Merkel's government in Germany (Schulz's party, the SPD, is in opposition in Berlin). Schulz said that Greece had promised to fulfil its duties and has therefore provided what it had to provide but Germany is refusing to keep its promise to provide aid for Greece, if needed. Schulz said that the aid mechanism suggested by the Commission was nothing but a “safety net” to help the country roll over its debts at acceptable rates of interest and this wouldn't cost the German taxpayers a penny. Schulz explained that if EU aid were not forthcoming, Greece would have to continue to pay too much in interest and it would be speculators that would benefit from all the budget-tightening efforts it was making. Schulz warned that if speculators were allowed to gain the upper hand in Greece, then other countries would soon get a bruising from the markets, countries like Italy, the United Kingdom and Spain. Schulz said that the Commission had come up with the right idea and Merkel should go along with it in order to demonstrate political solidarity and economic intelligence. Schulz added that the former Belgian prime minister, Guy Verhofstadt, was calling on the Council of Ministers, after weeks of wrangling, to come clean on Greece and make a “firm decision” based on the Commission's proposals. Verhofstadt was highly critical of people reluctant to come to the aid of Greece, saying he felt that in four days this week, various EU heads of state had done more damage to the European cause than all the Eurosceptics put together over the past four years. Verhofstadt said he was “happy” with Barroso's idea of a European mechanism, echoing Schulz's argument that this wouldn't cost taxpayers a penny. Europe has both the credibility and the liquidity for helping Greece to borrow money at normal rates and, Verhofstadt said, this is the only way to ensure that efforts to assist Greece will actually work. He concluded by saying that he hoped the members of the European Council would remain silent and approve Barroso's proposal. At the beginning of the financial crisis, banks were rescued “in just a few hours” but, when it is a matter of helping a partner eurozone country, there is hesitation, German Green member Rebecca Harms pointed out. As regional elections draw nearer in Rhineland Westphalia, the German government defines its position in relation to poll results indicating that a majority of Germans are opposed to providing Greece with financial support. Harms said this was too much pandering to the people and was therefore unacceptable. As a German member of parliament, she said, she was ashamed of her government. It is obvious that Greece should do its work and put its finances in order. For this, additional measures are needed, said Harms. Speaking on behalf of the Conservative group, Michal Tomasz Kaminski of Poland called for greater solidarity with Greece and criticised Germany's attitude. The Greek government is forced to make difficult sacrifices without pandering to the public but unfortunately this is not the case of all governments in Europe, he said. He also felt that part of the Greek problem lies in the fact that the country entered the eurozone before it was ready to do so. (A.B./H.B./transl.fl/jl)