Brussels, 15/12/2010 (Agence Europe) - On the eve of the last European Council of the year, which will be dominated by the debate on mechanisms to get out of crisis, the members of the European Parliament called on the representatives of the governments to speak in clear language and - with the usual exceptions - for a firm defence of the euro. Many MEPs also called for a decision on launching eurobonds.
Speculative attacks on the euro, a rise in euro-scepticism even in the traditionally pro-European countries: the European Council will open against a difficult backdrop, said the chairman of the EPP, the Frenchman Joseph Daul. However, Europe has never had such a stable currency as the euro and “stepping backwards would have disastrous consequences”. Daul wondered aloud why our countries are the only ones to practise a strict policy of orthodoxy, whereas the others “dope” their currency to relaunch the economy. The Barroso Commission has made proposals to relaunch the market; the Council must work more quickly and go further in the “rationalisation of expenditure” and in revising its political priorities, by adapting the budgetary framework for the period 2014-2020, to make the European budget into a genuine budget of investment.
Europe is “in a serious crisis of confidence”, said Germany's Martin Schulz, on behalf of the S&D Group, calling on the governments not to pretend that they are on top of the situation: the citizens have a right to the truth. The problem is worsened by the confusion on whether the measures proposed will be temporary or permanent and by the rumours about eurobonds. It is true that other measures exist, but “I want the eurobonds”, said Schulz.
The chairman of the ALDE Group, Guy Verhofstadt of Belgium, shares this opinion. The temporary measures are no longer enough, we need a stability pact with proper sanctions, a permanent and enlarged crisis fund, a reinforcement of economic governance, but also eurobonds. “There is no contradiction between crisis funds and eurobonds, we need both”, Verhofstadt exclaimed, calling for a rapid decision.
“You could have told us that things are pitching a bit” before the Council, said the chairman of the Greens/EFA, Daniel Cohn-Bendit (Germany). As for the European Commission, which has been “an element of stability whereas lucidity was lacking”, it should re-propose a stability pact and the solidarity pact: one cannot exist without the other. In Cohn-Bendit's view, protecting the euro requires a decision on eurobonds. More generally, he called for the functioning of the Union to be improved. It is quite simple, he said: “the Commission proposes, the Parliament amends and decides, the Council must react to this common position”.
The stability of the eurozone is in everybody's interests, whether they are members of it or not, said Timothy Kirkhope (UK, ECR). In the debate on coming out of crisis, the Commission president spoke of limited changes, he observed, but German Finance Minister Schaüble seems to be opening the door to tax union and political union. Kirkhope said that the priority must be to resolve the underlying economic problems, by means of specific measures which do not place any burden on the countries which have decided to remain outside the eurozone.
The chairman of the GUE/NGL, Germany's Lothar Bisky, believes in the virtues of a permanent mechanism to ensure financial stability, if it also makes it possible to control the financial markets, and would like it to be shored up by the creation of a tax on financial transactions. The position of the EFD Group is clear: the North and the South of Europe will never be able to be united in the same monetary union, said Nigel Farage. The British MEP welcomed the planned amendment to the Treaty, because this will entail popular consultation in Ireland and the United Kingdom, and he is clearly anticipating a result in line with his own eurosceptic views.
Permanent crisis mechanism: the commission responds
Sharon Bowles (ALDE, UK), who put a question to the Commission on the permanent financial stability mechanism in the eurozone, wanted to know more about a limited change to the Treaty and on technical options and conditions for this mechanism to be put into place. Would the member states which are not in the eurozone be invited to take part? What will the role of the Parliament be? What links will there be with the economic governance package?
The crisis mechanism, explained Olli Rehn on behalf the European Commission, will be an intergovernmental mechanism. The details for its functioning will be defined by the end of the first quarter of 2011, but obviously, its funding must be “sufficiently robust” to be credible on the markets. It will be created on the basis of Article 136, and despite the intergovernmental nature of the “financial arm” of this mechanism, the political conditions for its creation will be “firmly enshrined in the Treaty”. Most of the states would prefer it to be reserved for the countries of the eurozone due to concerns of transparency, whilst the countries outside the zone would be covered by a balance of payments mechanism.
A lot has been said of eurobonds, said the commissioner: however, the Commission made proposals in May which the Council rejected because they looked too much like eurobonds… Even so, this remains an “important alternative” into which analytic studies need to be carried out. This instrument could help to overcome the crisis by allowing more reasonable borrowing costs and by facilitating increased budgetary cooperation. But for the time being, it is a question of making the financial stability facility more effective and flexible. And also, he continued, of making the most of the potential of the single market and giving the EU 2020 strategy every possibility of succeeding.
Speaking at the conclusion of the debate, the president-in-exercise of the Council, Olivier Chastel, said that he understood the uncertainties of some speakers on perceptions of the crisis and the scale of the response from the government. At yesterday's General Affairs Council, we discussed these questions, and I can tell you, Chastel continued, that everybody wants to react to the crisis and understands that “it is the euro which is at stake and not just one country after the next”. Tomorrow, he concluded, we therefore intend to send out a clear signal on our willingness to take action and set in place a simple mechanism to modify the Treaty, with a crisis mechanism which is “clear and unassailable before the Court of Karlsruhe”. (L.G./transl.fl)