Preparing for the “European semester”. The “European semester” is taking shape. The various phases of its introduction announced by the Commission show that it will be no laughing matter. The “European semester” and its terminology were invented to get round a contradiction, namely the need to respect the power of national parliaments (which vote through member states' budgets) while ensuring that national budgets respect the eurozone Stability Pact. How can parliamentary autonomy be reconciled with making sure each budget meets European commitments? This is why this preparatory six-month period was invented during which eurozone countries and the other member states (which will use a different procedure) will discuss at EU level the budget decisions of each for the year to come ahead of the actual decisions being taken by the national parliament. The Commission is organising the technicalities and various stages of this preparatory period, and has just published the details (see EUROPE 10292).
It won't be easy to coordinate the budget policies of countries whose economic situations vary so widely. Most will have to cut their deficits without being able to use adjustments in monetary policy. It has been amply demonstrated that the deceptively simple phrase “leave the euro” is simply not feasible because debt still has to be paid back in euros but without aid from EU sources. This is impractical and no member state is planning to try it. This is a fact. Another important issue has been hammered home by EU Economic and Monetary Affairs Commissioner Olli Rehn, namely that the banks' problems are not the main concern - what is important is that there is cash available to feed the real economy - real economy here meaning companies and households. In the spring of this year, the banks will be sitting tougher stress tests and this might result in them having to restructure or increase their levels of capital. The line taken by the Commission is that correcting public spending has to go hand-in-hand with economic reform. The Commission has set out a timeline. In January, the Commission will unveil the EU's economic priorities. This will be assessed in March and decisions taken by the European Council (heads of state), followed by each member state explaining how it will be introducing the EU guidelines in its own Stability and Convergence Programme. In June and July, the national programmes will be discussed in common, endorsed and sent to the national parliaments. The Commission points out that it is planning to suggest that the EU itself should issue eurobonds for big infrastructure projects of EU interest (what it thinks of the idea of eurobonds proper is not yet clear) along with expanding the cash available for EU intervention.
As we see, the Commission's plans for the “European semester” are common economic governance by another name.
Supporters of Turkey joining the EU come out of the woodwork. In this column, I have expressed the view that Turkey joining the EU is an unrealistic pipedream (see issue 10287), and there have been reactions against this. It is true that most of them originate from Turkey itself. The disagreements are politely expressed and set out the reasons for Turkey joining the EU - historic, political and economic justifications. They challenge the idea that Turkey would be too great a budget burden for the EU because Turkey has made remarkable economic progress. They point out that Turkey's presence would radically boost the EU's political weight. They stress the importance of the city of Istanbul. They are probably right about Istanbul. A few days ago, a European newspaper had an entire page on the city, entitled “The sublime history of a city at the centre of the world”. The thing is, though, it was called Constantinople back then. The article glorifies it as containing “all possible enlightenments - that of Apollo and the sun, Christ and Mary, and Mahomet II” and so forth. But Istanbul is on one side of Turkey - the rest is Asian, respectable and admirable even, but not connected in any way with Europe. And in any case, is it possible to imagine a country joining the EU if Germany and France don't want it to?
(F.R./transl.fl)