Three connected and positive developments. Nothing is in the bag yet but everything is possible. The historians of tomorrow may describe the 8-9 December 2011 summit as historic in terms of European construction. Why? Because in less than 24 hours:
- the United Kingdom has voluntarily put itself on the sidelines of European construction, not only from a monetary point of view (this was already the case) but with everything involving the EU's economic and budgetary policies. The same road will be taken with regard to other European policies: we will soon be able to see this in the framework of the negotiations on the 2014-2020 financial perspectives;
eurozone countries have defined new rules and discipline that cover both monetary management and new binding economic governance by explicitly recognising certain mistakes of the past. A deadline of barely 3 months has been set up for updating the texts (the essential text is contained in the summit conclusions) and their legal approval;
the Community institutions' scope is not only safeguarded and consolidated, it has also been expanded in other areas, particularly with regard to the European Commission powers in managing the euro and monitoring national budgets. European Parliament prerogatives as a co-legislator (with the Council) have also been confirmed and consolidated.
The media has been full of reports on these developments, which have provoked an avalanche of different commentaries and positions. I have summarised them and brought them together in three sections to underline what they represent as a whole (although they are often separate, according to different political opinions and preferences). My objective is to bring them together into a comprehensive and positive evaluation, which also covers the decision of the United Kingdom to distance itself from European construction and which is often considered as a negative development.
British choice adds clarification. Why do I think that the United Kingdom's decision to distance itself is positive? Because it gets rid of any ambiguities. Let's avoid making any moral judgments: every responsible government chooses what it deems positive for its country and its people and acts accordingly. Mr Cameron considers that autonomy in financial regulation is indispensable for his country and he effectively demanded the right to veto any European measure in this domain. From his point of view, it's logical. The monetary policy of the City of London is opposed to the policy of the eurozone from all points of view and the British authorities reject the innovations mainland Europe is advocating, particularly the tax on financial transactions. The United Kingdom considers that the financial importance of London is an essential factor to the wealth of the nation. According to certain analysts, Wall Street in New York and the City of London are pursuing parallel trajectories in which the main objective is to limit the power of the euro on the global markets. If the European currency supersedes the dollar too much, demand for the latter as a reserve currency will weaken.
It is true that at the same time the British manufacturing sector is expressing concerns about the risk of its links with the European single market weakening and their country losing its punching power in the way this market functions and deepens. This is the danger of choosing to isolate oneself but a choice needs to be made… all the more so given that the British absence from the next European treaty is another to be added to other substantial absences: the euro, of course, the Schengen area, anomalies in the way the country participates in the Community budget, the Charter of fundamental rights, and so on. Despite a courageous group headed by Andrew Duff, fighting for a federal Europe, including the United Kingdom, the opposite trend is gaining ground.
A dangerous imbalance? The two other aspects pertaining to the summit results, summarised above, call for observations and commentaries in equal measure. We will be returning to this issue. The aspect that provokes the most worries and concerns is the imbalance between the projects that have been agreed upon but which will not be put into practice until next March, and the uncertainties regarding the way in which the markets react in the immediate term. Will the decisions taken by the most senior European political authorities be duly taken into consideration? Or will the financial world, as devoid of scruples as ever and assisted by the sinister rating agencies seek to amass as much profit from the situation as possible? This week will provide us with a response.
(FR/transl.fl)