An important gesture. Is it likely that European citizens will rally to defend the euro against efforts made by international financial operators to bring it down? Obviously not. Valéry Giscard d'Estaing is advocating a sudden burst of “people power” (see this column yesterday) but the majority of citizens have, for the time being, other concerns than a battle over principles. Most of them are worried about their living conditions, their jobs, their own futures or whatever it might be, with or without the euro. This does not mean that the appeal by VGE is a rhetorical initiative. His explicit denunciation of financial speculation and those responsible for it, together with his call to do battle against the latter, is an important gesture. The “European People” are not going to respond as a mass movement. There is no specific movement within public opinion that opposes the financial giants of New York and London (with which similar forces from the eurozone often align themselves), but the denunciation by one of the founders of the euro aims to give a clear indication that the financial movers and shakers are continuing to attack the European currency and subsequently the European people. Despite the divergences and shortcomings, Europe has chosen to go in the right direction and it must continue down this path by putting into practice the regulation introduced and optimising use of the new instruments with which it has provided itself.
It is in this context that the warning and appeal made by VGE is located. It is in line with the principles and orientations already acquired and retained by the EU, of which certain essential aspects appear almost ignored by the pundits and therefore deserve to be pointed out again for what they introduce into the financial arena:
1. Convergence. Both the European Commission and certain member states (Germany and France did so in common) have announced proposals or initiatives for increasing eurozone economic convergence. The exchange of views on national budgets prior to their adoption does not exclusively focus on the gradual respect of the accepted deficit ceiling but also on other specific aspects of national policies, for example, pensions and social welfare systems;
2. Private sector. Private sector participation in the cost of a eurozone country's possible debt restructuring was agreed. There were sharp objections and, from a certain point of view, these were understandable, denouncing the danger of certain financial bodies no longer subscribing at all treasury bonds of the less solid member states. “Participation” as stipulated by Germany was made somewhat more flexible and it will only be applicable from 2013. It will not be automatic and will be evaluated on a case-by-case basis. The principle, however, was retained and I believe that it is essential because participation in the risks is the only acceptable justification for applying interest rates at the previously inadmissible level.
3. Parliament as co-legislator. We are aware, as it is pointed out every day, but sometimes forgotten, that agreement from the EP is essential for all new legislation and that the Council must take into account the different Parliamentary positions. The texts often represent compromises between the EP and member states and have been developed with the indispensable participation of the Commission. Support instruments for countries in the eurozone experiencing difficulty are in fact inter-governmental (whilst we wait for the Community budget to be able to do more…) but the EP knows how to partly link Community legal aspects with those that remain in the national remit and is not afraid of doing so. This is a delicate balancing act, which provokes a number of conflicts but would also presuppose enhanced cooperation between the EP and national parliaments.
Negotiations on new financial perspectives have begun. The essential element for the future of the EP is, in any case, the definition of new multiannual financial perspectives, which in practice will determine Community activity as from 2014. Five member states have taken action ahead of the document, which the Commission has announced for next June, by effectively beginning negotiations: they are in practice, calling for an austerity policy (see our publication yesterday, with the text of the five member states' approach annexed). Other member states immediately reacted by advocating the opposite and the Commission underlined the requirement of first of all defining the EU objectives and future common policies, before talking about the figures. The positions are in fact far less distant from each other than they would initially appear but the negotiations will be very complex, starting with the question of the “British rebate” (on which even the signatory countries of the letter have different opinions). This column will be returning to the first elements of this debate, which will go on throughout next year and beyond. (F.R./transl.fl)