Seven points. Here's a rough-and-ready tally of the results of the 17 June 2010 European Council on finance and economic issues: (1) Economic governance in the eurozone is no longer just a theory but is being put into practice; (2) Budget discipline will be consolidated, with stronger penalties for countries that break the rules; (3) Macroeconomic surveillance will not focus solely on public spending but will also examine competitiveness and consumer debt; (4) The idea of a bank tax has been taken on board and the EU will forge ahead even if the idea is not taken up at global level; (5) The idea of a tax on financial transactions has been accepted and the EU will make the case for it at the G20; (6) Reform of financial regulations will be speeded up (supervision, credit rating agencies, etc); and (7) The results of stress tests will be published for the big banks.
Just a few months or even a few weeks ago, this list of decisions and policies would have seemed a totally unrealistic pipedream, but they are now EU decisions and generally accepted EU policies. Comments that the EU and the European construction process have ground to a halt are justified - but the EU can still come up with the goods. Many areas require further clarification and disagreements have not gone away despite this progress - going well beyond expectations. The ever more proactive and responsible involvement of the European Parliament in regulatory questions ensures that debate will be open, and the European Commission is being encouraged to take more initiatives, prepare compromise deals and draw up new proposals. Even people who dislike the Community method have to use it or at least bear it in mind.
I might seem to be making an over-optimistic assessment of the situation, but I get the impression that there are more and more people like me out there thinking that European defeatism has had its day and it's time to take confident steps. A few preliminary, back-of-an-envelope comments are in order.
A. Economic governance. Jacques Delors doesn't like the word “governance”, preferring instead to talk about “coordination” (see article further on in the newsletter). He has good reason for this but journalists do not have the option of not using the word “governance” - it is, after all, the term used by the European Council in its Conclusions and is regularly used by the chair of the European Council, Herman Van Rompuy. The important thing is to realise that what is being talked about when people use the word “governance” is the coordination of economic policies. A “European semester” has been decided upon to this end. This is clever phraseology to avoid talking openly about what this really means - joint debate at European level about countries' budgets before the parliament of the country in question gets to decide on it. In practice, member states' stability and convergence programmes will be discussed and there will be tighter budgetary surveillance (and proper monitoring of statistics).
B. Penalties. It has been agreed that tighter penalties are needed but exactly how this will pan out in practice is still under discussion, as is the question of whether the EU Treaty should be changed to introduce “political sanctions”, suspending a country's voting rights, for example. People disagree over this. Some believe economic penalties would not be a good idea because they would cut EU aid to countries and communities that are already facing problems, and political sanctions are seen as incompatible with fundamental questions like ensuring member states are on an equal footing. Thursday's summit did not discuss the matter but Angela Merkel sounded out her colleagues behind the scenes. Van Rompuy's taskforce will not be able to avoid the issue.
C. The eurozone is different. The idea of holding separate summits for the eurozone was not discussed (Nicolas Sarkozy dropped the idea at his pre-summit talks with Angela Merkel on Wednesday) and Van Rompuy's pragmatic approach will be used - he will himself convene meetings of eurozone heads of state when he feels it necessary (he's already done it twice) but no new official bodies will be set up. It was pointed out several times at the summit that the eurozone is different, and the British prime minister confirmed that the UK will not be applying to join the euro. The eurozone's autonomy is seen in how it operates.
D. The EUROPE 2020 strategy. Both Van Rompuy and the summit's final Conclusions stressed the importance of the new EUROPE 2020 strategy to boost growth and employment despite the current wave of austerity programmes and public spending cuts in the member states. At the moment, EUROPE 2020 is a wish-list. It has won the European Council's general backing but as a diplomat attending the summit pointed out: “Nobody knows what the world will be like in 2013 or 2014; our credibility depends solely on measures to be applied in the here and now.” The strategy needs fleshing out and putting into practice. (F.R./transl.fl)