European Parliament has its say ... The legislative texts on European economic governance, which the Economic and Financial Affairs Council discussed on Tuesday, will immediately be sent to the European Parliament. The latter will have to negotiate these in the context of the balance of powers. The objective is to reach an overall agreement by June between the two parties. The EP will therefore fully play its role as co-legislator on the six regulations that aim to tighten the budgetary discipline of member states and enhance supervision of their economic policies. The Parliamentary debate will not be simple because certain political groups have already responded to the Council texts in a variety of different ways. Some of them welcomed the drafts, whilst others described the position of the Council as “irresponsible”. Negotiations will not be easy either, even though it is expected that certain extreme positions will remain a minority within the EP. This is democracy. It would be absurd to welcome democratic progress in non-EU southern Mediterranean countries but not recognise the legitimacy of it and just accept the rules of it in the EU itself
… and the Eurogroup. The Eurogroup will continue its work next Monday under the presidency of Jean-Claude Juncker, to prepare for the European Council at the end of the month. It is performing an essential task: in practice, it translates the decisions adopted at the end of last week by the informal eurozone summit, into operational measures. Despite the complexity of certain texts, this issue will be followed attentively in this publication.
Greece: “restructuring” or not? The president of France, Nicolas Sarkozy, coolly dismissed the possibility of Greek debt being restructured. The financial community, however, considers that this is almost inevitable. Mr Sarkozy's subsequent response to a colleague who asked him about this subject was that “there is no question of our leaving a eurozone state to default. This would mean serious problems for the euro. There is no question of this. Everything that is being done in Greece with both courage and efficiency also demonstrates that this is a non-question.” At first glance, this denial appears very strong. A week before, the Greek prime minister was also as explicit in his opinion on this issue.
Has the question therefore been solved? It is not that simple. Let's leave aside the hypothesis of there being an “obligatory answer” required and it being impossible for a head of state to respond in any other way. Let's instead look more closely at the analyses provided by other attentive experts and observers, who expressed their point of view in the Coulisses de Bruxelles blog written by our colleague, Jean Quatremer. They pointed out that the question put to Mr Sarkozy focuses on the possible restructuring of the Greek debt, whereas the reply provided by the president coolly dismissed the hypothesis of a eurozone country being able to default. According to the experts, this does not exactly mean the same thing. The term default implies a renunciation of a debt. Creditors would then be able to negotiate an agreement with the country defaulting, which would perhaps, in the meantime, be excluded from procuring loans on the markets. On the other hand, restructuring leaves intact the amount of debt requiring repayment, whilst introducing greater flexibility into the repayment conditions. In practice, the EU has already partially restructured the Greek debt by reducing interest rates and extending the repayment period from three to seven and a half years. The experts consider that this is undoubtedly already a form of restructuring! Finance ministers will continue to develop application rules next Monday. These rules confer fairly broad powers upon the European Commission and will need to be negotiated with the European Parliament. How should the situation therefore be interpreted? Are further restructuring operations in one form or another on the horizon? Financial players continue to believe that this is the case but they could be wrong or simply looking after their own interests.
Listen to Jacques Delors. Yesterday, our publication provided a report on the speech made by Jacques Delors at the inter-parliamentary meeting (European Parliament and national parliaments) on Monday evening. Once again, what he says is a genuine lesson in Community balance, bringing together lucidity in the face of very real difficulties and confidence in the future. It should be read; and this column will be returning to discuss it. (F.R./transl.fl)