Brussels, 29/10/2010 (Agence Europe) - In the evening of Thursday 28 October, EU heads of state and government decided to begin the process of making limited changes to the Lisbon Treaty to create a permanent eurozone crisis management mechanism, as requested by France and Germany. A final decision on how such a mechanism and the changes to the European treaty would operate will be taken in December so that the whole process can be complete by the summer of 2013. The question of suspending voting rights will be discussed but is being seen as a separate issue from the process of setting up a crisis management mechanism.
“We recommend a robust and credible permanent crisis mechanism to safeguard the financial stability of the euro area as a whole”, commented the president of the European Council, Herman Van Rompuy, adding: “Because even if all the right budgetary and economic measures are taken by everybody, one may never exclude surprises. Politics is not a zero-risk business”. In its conclusions document, the European Council calls for consultations on a limited revision of the treaty and welcomes the European Commission's plan to unveil how such a mechanism might work and the role of the private sector and the IMF, along with tight trigger mechanisms.
It is no longer a question of whether to reform the treaty, but what form the reform should take, said the German chancellor, Angela Merkel, on Friday. She said the new mechanism would be used in the event of a serious threat to the stability of the single currency and to help individual countries. Merkel said that it was not Greece that had been defended, but the euro. She said it was extremely important to include private funders in the mechanism but admitted that there was disagreement over this with the European Central Bank. Luxembourg's prime minister, Jean-Claude Juncker, would have preferred a genuine EU instrument and commented that views had not been unanimous. The mechanism would, he said, be an intergovernmental tool prepared by the Council and the Commission. The French president, Nicolas Sarkozy, stressed the unprecedented strengthening of European solidarity by the recommended mechanism. The British prime minister, David Cameron, commented: “We're not members of the eurozone, we won't be joining, but the stability of the eurozone is our interest... Any future treaty change will not affect the UK, no powers will be transferred from Westminster to Brussels”.
Limited review of the treaty. Initially, some countries were reluctant to consider changing the treaty. The Austrian chancellor, Werner Faymann, said that Austria would have preferred to extend the existing mechanism without changing the treaty, but because the changes will be limited, they will be acceptable and doable without requiring a referendum. Denmark hesitated for a long time and the Commission has not been won over. It is the right of Europe's leaders to agree to review the treaty, commented the Commission president, José Manuel Durão Barroso. Van Rompuy said he would be suggesting limited changes to the treaties, using rapid procedures where possible. He said it would not mean a re-opening of the Lisbon Treaty and institutional debate, but it was necessary to meet a need. In order to have a permanent crisis management mechanism, a more robust, constitutional basis is needed in the treaty.
In their conclusions document, Europe's leaders say that the limited changes to the treaty will not affect the “no bailout” clause, Article 125, whcih bans a bailout of one member state by another. Merkel said that the leaders would not be touching Article 125 and that not all the member states were very enthusiastic about changing the treaty, but in order to have legal security in Germany, changes were needed. Berlin worries that the setting up of a permanent crisis management mechanism under the current Lisbon Treaty would be rejected by the German constitutional court at Karlsruhe. Juncker said it would be “preferable” to focus on Article 122, which allows countries to aid a country facing problems with their energy supplies and suffering from a natural disaster. He said that reference to a financial crisis could be added here.
The idea behind a “limited” revision of the treaty is to get the whole process completed rapidly to avoid leaving a legal vacuum when at the end of 2013 the temporary eurozone stabilisation mechanism introduced in the spring of this year runs out. The European Council may make use of the “simplified procedure” (see EUROPE 10243) whereby it would unanimously adopt a decision to amend a measure related to an EU policy or action after consulting the EP, the Commission and the ECB. The decision may not involve the transfer of sovereignty to EU level and would not come into force until every member state has ratified it. The EU made use of this system in June to increase the number of MEPs without needing a referendum. The Irish prime minister, Brian Cowen, said on Friday that Ireland could avoid having to hold a referendum if there were only limited changes to the treaty.
Suspension of voting rights. Apart from Germany (backed by France), no other countries approve of the idea of suspending a member state's voting rights. The Belgian prime minister, Yves Leterme, said it was a dead-end. Van Rompuy therefore simply said that he had been asked to examine the issue, which would be restricted to eurozone countries and decisions in the field of economic and monetary affairs. Merkel said that the question was still on the table, but did not seem very enthusiastic. (A.B./A.N./B.C./G.B./H.B./M.B. transl.fl)