A well trailed document. The astonishment, almost wariness, that has surrounded the proposals from Angela Merkel and Nicolas Sarkozy on the institutional advancement of economic and monetary union has been, in my view, excessive. The initiative did not come as a surprise: it had been announced and planned, and it had been scheduled that it would be presented on the sidelines of the Statement by the Heads of State or Government of the Euro Area on 21 July (see our newsletter no 104424). It had nothing to do with France and Germany trying to seize the upper hand in this area, but was the first national contribution to a document the official draft of which will be drawn up by a Community procedure, as indicated in the last paragraph of the above-mentioned Statement at the end of July: “We invite the president of the European Council, in close consultation with the president of the Commission and the president of the Eurogroup, to make concrete proposals by October on how to improve working methods and enhance crisis management in the euro area.”
Neither definitive nor immutable, and in part audacious. So, nothing surprising or dramatic for anyone who had been keeping a close eye on how things were developing. The position of the two main countries of the euro area will, of course, carry a lot of weight as the official procedure progresses. There is nothing unusual in that. Similarly, it is only to be expected that the Franco-German document should arouse criticism and reservations. This is the first phase of the process: the official draft will become available in October and will then be up for negotiation. The Merkel-Sarkozy duo advocate a number of steps for European economic governance, sometimes audacious, such as putting in place a permanent economic government for the eurozone at the highest level with a permanent president (the first would be Mr Van Rompuy), and sometimes controversial, such as the financial transaction tax (Tobin tax or Robin Hood tax) and the incorporation of the budgetary balance rule into the constitutions of all eurozone countries. Other initiatives were not included in the document, such as eurobonds, which Germany says presuppose that a number of conditions have to be met beforehand.
Not all the points of the Franco-German starting position must, then, be seen as being cast in tablets of stone. This position is a vital element, given the weight and power of the two countries concerned and reservations must not ignore the fundamental positive point which is the recognition in itself of European economic governance. Nor must it be ignored that some points, such as support for the aforementioned Robin Hood tax, go beyond what was forecast. The objection to this tax has been clearly set out: it would result in financial activity being transferred out of the euro area. Mr Sarkozy, however, in his capacity as president of the G20, has every intention of pushing it at global level. What is at stake is colossal, so why give up on it?
Intergovernmental for always? One aspect of the text from Ms Merkel and Mr Sarkozy which is causing great puzzlement and raising reservations in Community circles is its intergovernmental nature: management of European economic governance would essentially be up to member states. Even responsibility for the drafting of the official proposal, as seen above, was not given to the European Commission, but to the president of the European Council “in close consultation with the president of the Commission”. This way of proceeding was determined on 21 July by all heads of state or government of the euro area, and the Commission president agreed to it. At present, what is key is to find out the extent to which it will be possible to bring the operation as a whole back within the Community framework. The financial burden, it must never be forgotten, lies with the states and it is up to national parliaments to decide and approve member states' budgets. What is important is that the EU as such and its institutions play their full role and that cooperation between the European Parliament and national parliaments be extended and increased.
“The principle of a handover to the Community of these intergovernmental initiatives has not yet been established but it is gaining ground”, said Alain Lamassoure, who is in charge of this matter in the European Parliament. We can but hope that he is right. (F.R./transl.rt)