Criticism is often biased. There were some peculiar reactions to the agreement reached at the eurozone summit on Wednesday night, Thursday morning, which prevented the euro from collapsing. Until the day before the summit, the potential collapse of the euro was described as a disaster that would not only lead to a collapse of the eurozone but possibly the end of the EU. There was a broad sign of relief in most countries around the world and on the markets when agreement was reached, but political currents decided to focus on areas they didn't like rather than the fact that the eurozone and the EU had been saved. The reason for this is obvious - most of the critics decided to have a go at the bits of the compromise that do not suit their political leanings rather than focusing on how the EU came through, hence the severity of the criticism.
If heads of state had followed the same approach, agreement would never have been reached and Greece would have gone bankrupt, dragging Italy down with it, and the eurozone as it stands at present would have fallen apart and had the disastrous impact around the world that people have been describing. In reality, however, each head of state compromised. It is well-known that France agreed to aspects of the German view that it disliked intensely, and some areas are not totally clear. The final agreement is itself a compromise, but if everyone had stuck to their starting point, disaster would have been unavoidable.
It is natural that after the agreement, in the parliamentary debate, everyone expressed their own views; but the first comments after the deal had been struck were probably to express relief in no uncertain terms and delight that the EU and the euro had been saved (although I personally think that people had overplayed the risks, and this had in fact played into the hands of the financial world, which was busy fighting its corner, as I explained in yesterday's newsletter).
Euro or not? Disagreements and misunderstandings. The countries that are not in the euro still do not quite understand the ones that are, and vice versa. Officially, this is played down on the grounds that it was dealt with in the conclusions document of the European summit on Sunday 23 October and in the clear statements by the president of the Commission. The word “misunderstanding” is not quite accurate because these are genuine clashes of interests and views of the world.
The British are a special case. The UK has no plans to join the euro and makes no attempt to hide the fact, and some eurozone leaders believe that the City of London is undermining the single currency. As far as the UK is concerned, the City is not just a vital source of wealth and prestige for London and the country, but an economic anchor in these troubled times. The UK rejects key aspects of the rest of Europe's financial and monetary policy, like the tax on financial transactions (the UK is so strongly opposed to such a tax that the EU is considering only introducing it in the eurozone under “enhanced cooperation” as set out in the Lisbon Treaty) and some restrictions in the financial world. Some British political parties are calling for a referendum on leaving Europe, although the prime minister and the British parliament have ruled this out. There will be new areas of disagreement over the EU's Financial Perspectives for 2014-2020.
Things are different for the other non-euro member states. They don't yet know when they'll join the euro, but they already want to get involved in its management. The various ways of keeping them informed and involved do not amount to much in practice, in my view. On Thursday night, Nicolas Sarkozy said something along the lines (I do not have his exact words) that the eurozone needed greater autonomy and the links with non-euro countries should be less binding. Some of the eurozone believes that it is too easy to carp from the sidelines, whether British or any other non-euro nationality, and demand to participate in talks but without having to abide by the decisions taken.
Joint management of the eurozone with centralised powers and majority voting rules has been agreed, but the institutional aspects (Community method or intergovernmentalism) are still under debate and I will be returning to this. (FR/transl.fl)