Four essential aspects. With a few hours to go until the special eurozone summit, the idea that a political position will be taken in favour of strengthening European construction (see this column yesterday) is beginning to gather momentum. Of course, the heads of state and government have to reach a decision on certain essential aspects of additional support for Greece on which the differences within the Eurogroup and with the European Central Bank (ECB) have not been overcome; but the crucial compromises will only become relevant if they are accompanied by a clear political message. And with this in mind I consider it useful to underline four essential aspects that are too often ignored or neglected.
Link between financial support and economic policy. The first aspect involves the idea launched at a formal ceremony by Jean-Claude Trichet, the president of the ECB - setting up a eurozone finance ministry. Mr Trichet put this idea forward last month in Aachen during the Charlemagne prize-giving ceremony and his idea has recently been relaunched in several circles, including by a number of political leaders (this Wednesday again by the Belgian minister for finance, Didier Reynders). Nonetheless, the “solidarity” aspect is mainly mentioned, implying automatic support to eurozone countries experiencing difficulty. And yet the second aspect is just as crucial - this involves the direct influence of the European ministry on the economic policy of the countries experiencing difficulty, which goes “well beyond the enhanced monitoring as currently proposed”. The European finance ministry would be able to veto national economic policy decisions if necessary. This week, Mr Trichet reaffirmed that this ministry should be able to enable the EU to “take economic command of a country if it is experiencing grave difficulty”. This would constitute the compulsory counterpart to common monetary responsibility -one could not exist without the other. This is not a short-term objective and Mr Trichet is aware of this because in his speech at Aachen he explained that the development being advocated represents “the Europe that we will have at some stage in the future, a confederation of sovereign states of an entirely new kind”. The message is clear - automatic support cannot be requested whilst keeping autonomy in economic policy. Who is ready to take this step? If not, it is just rhetoric.
EU support for Greece. The second aspect is linked to the first - EU economic support for Greece. According to recently published data, over the last decade Greece has benefited from €70 billion in European structural funds, and the European Commission has just introduced greater flexibility into the application of rules on further funding. It has therefore been confirmed that Greece has been appropriately assisted and that it is largely responsible for its own situation, with obviously the complicit liability of the banks involved and insufficient European controls. Mr Trichet has declared: “We are paying today for the negligence of public policy monitoring in the past.”
Noxious agencies. The third aspect is one of the most burning issues - the rating agencies. Judgments are quite clear and all tally, ranging from severity often to indignation. I'll quote a few of them at random: “The system in place constitutes a historic scandal; its effects threaten democracy. We are capitulating to these white-collar terrorists. They are greedy pirates who can not see further than their noses. It is ludicrous that future disasters should be down to them.” One therefore has to ask oneself why official political reactions are still so timid and why, ultimately, these agencies determine the immediate short-term value of currencies in favour of speculation. EU Commissioner Michel Barnier has pointed out some of the limitations that could be introduced to counter their superpower. Ms Merkel has gone even further and called for a European agency to be set up by the private sector in order to avoid any suspicion of it being influenced by public authorities. Is it appropriate to hope that the conclusions of Thursday's summit highlight this dossier?
A fragile edifice? The fourth aspect is perhaps the most important - the fragility of the edifice in the absence of political positions being taken at the highest level. I will once again quote Mr Trichet (the imminent end to his mandate is undoubtedly encouraging a certain frankness on his part): “I am bequeathing a fragile edifice, under attack by sections of the Anglo-Saxon financial community.” His final statement requires a note of reflection on the attitude displayed and the role played by the United Kingdom in the EU because the questions go beyond the financial domain. They also involve the agricultural policy, the fisheries policy, the non-participation in the borderless Schengen area, and other issues too. This column will be returning to the issue of the United Kingdom in the EU. (F.R./transl.fl)