Official support hiding concern and fear. It would not be credible to claim that with the looming decisions about the future of the euro, most people feel optimistic. Although the EU and national authorities alike are saying that they strongly desire and have great confidence in the new budget discipline treaty for the eurozone, which they say will be a reality by the end of the month, at the same time, there is a plethora of less optimistic theories doing the rounds and some people are even considering what to do if the talks break down. The reasons for the pessimism are far from clear - simply to cover all ground? Or not believing success is possible? Bolstering uncertainty on the markets so that speculators can continue to make a mint?
Whatever the reasons for doubting the deal, it is simply a fact that there have never been so many different scenarios. The first (in first place only because it seems the simplest) is the end of the euro and a return to national currencies. It has been shown that this would be a disaster, particularly for the highly indebted countries, which would find their national currencies hugely devalued against the euro and yet they would have to pay back their debts in euro-equivalents. Theories about the mechanics of all this are mushrooming. The Wall Street Journal published a step-by-step strategy by Economics Professor at Harvard University, Robert Barro, who says that Germany would have to reintroduce the deutschmark in 2012 for the same value as the euro; for two years, the deutschmark and the euro would be interchangeable while the other eurozone countries gradually re-introduced their own currencies and it would then take two or three years to phase out the euro and let national currencies stand at the value chosen by the markets. This is far from clear to me, but no doubt experts understand how it would work. Another plan for getting rid of the euro has already been given the backing of at least one MEP and no doubt other ideas are doing the rounds. These contradictory and highly theoretical scenarios are difficult to fathom.
The so-called alternatives are a smokescreen. I do not believe that any last-minute wizardry is going to invent a last-minute solution. If a new treaty is agreed upon on 30 January, then ratification will begin by the member states so that the treaty can come into force very soon and the markets are expected to react positively. If, on the other hand, the talks fail to agree on a new treaty, then the eurozone cannot carry on in its present shape without budget discipline; and the way the EU as a whole would change is difficult to predict. There will be big changes irrespective of the outcome of the 30 January talks and there will still be a question mark over Greece. How could a two-speed Europe be avoided, given that it actually exists in practice?
Inevitable transformation surrounded by question marks. There is a ridiculous number of suggestions, hypotheses and solutions being proferred, so many in fact that one gets the impression people are only coming up with so-called solutions in order to test out reaction and spark debate. Take, for example, the idea mooted by French European affairs minister Jean Leonetti (see yesterday's newsletter) of a Eurozone Parliament made up of national parliamentarians and using the European Parliament facilities and headquarters to keep costs down. The idea behind this is simple - if a faster Europe is set up without the EU, then it needs some form of democratic control, but the idea has been shot down because there is already a body that is made up of national parliamentarians at EU level, namely COSAC (Conference of EU Parliaments' Expert Bodies on European Affairs), which could have a special connection with MEPs and eurozone national parliamentarians and an advisory role. Alain Lamassoure, who chairs the EP's budgets committee, points out that the Lisbon Treaty explicitly states that national parliaments shall help ensure the proper running of the EU; all that is needed is to put this into practice.
There are already cooperation bodies in existence that can avoid making the running of the eurozone even more intergovernmental than it is and some governments' habits of demanding and pushing for autonomy to the detriment of EU rules and procedures is one of the most serious and damaging problems with the way the EU operates. Not only that, but these bad habits run counter to tighter discipline in the eurozone. I shall be returning to this. (FR/transl.fl )