Problems in “budgetary discipline-economic relaunch” parallel. Reactions in Brussels have been somewhat agitated and not always uniform on the repercussions at European level of the change of president in France; but the liveliness of these reactions is a positive thing, in these times of apathy (one might even say fatigue) of the general public towards European integration. This lassitude, which has in some cases turned into discontentment and even - in Greece - into rage, as if the EU were responsible for the departure of a number of member states from the correct management of their national budgets. Currently, some attention has been transferred from Brussels to Paris and the European citizens have learnt that as far as the EU is concerned, the parallel between budgetary discipline and economic recovery was an accepted concept: it was not dreamt up in any of the capitals the night before.
We now note that it was easier to proclaim the parallel than it is to translate it into concrete action; and the differences in approach still exist. The three-point summary provided yesterday by the president of the European Commission was clear and explicit: budgetary consolidation, structural reforms, targeted investments (see EUROPE 10610). But the differences in interpretation still exist and the concretisation will not be straightforward.
Future political influences? The differences of opinion over the concept of economic recovery also suggest another fundamental political issue: the influence that the Socialist success in France could have on the elections in other member states and, by extension, on the management of the EU, by influencing the composition of the European Council and of the ministerial Councils, as well as the European Parliament elections, when the time comes. Absurd? We can't be so sure. Elzbieta Bienkowska, Polish Regional Development Minister, has just expressed her hopes that the change of presidency in France may relax France's stance on the future budget for the European cohesion policy (see EUROPE 10609). The Socialist organisations of certain member states are discussing this aspect and I shall return to it.
Ms Bienkowska's hopes bring us neatly back to the economy/finance dossier, which is global in the sense that it influences the whole raft of Community activity and, in particular, negotiations underway on the financial perspectives 2014-2020, on which the development of all European policies, the cohesion policy and common agricultural policy in particular, will depend.
A treaty not to be amended, but… Let us return to talks on the details of the parallel between discipline and recovery. Over and above the standard congratulations, most reactions in Brussels to François Hollande's victory laid emphasis on the obligation to respect the “budgetary discipline” treaty (the one known as the fiscal compact), or on the parallel recovery of economic growth. The principle of the parallel is respected in both attitudes, therefore, but with differences in priority and method.
Mr Barroso noted the convergence between what Mr Hollande announced on 26 April and the initiatives already taken or communicated by the European Commission, which gave him leave to state that its objectives and those of France are shared ones, “whilst continuing to steer a course for budgetary consolidation and debt reduction”. Commissioner Michel Barnier welcomed the fact that we will be talking a lot of growth, referring to the European patent, the funding of major infrastructure projects by the EIB and a better use of the structural funds. According to Joseph Daul, the president of the largest political group of the EP, “the indispensable growth policy … must not bring about additional expenditure”. But in the view of the president of the EP, Martin Schulz, “it is time to change direction in Europe”. Daniel Cohn-Bendit said on behalf of the Greens Group that the elections in France have shown that “the people want a change in direction in European politics”.
With these quotations, I simply mean to stress the differences of opinion. I have no intention of summing up here things that our bulletin has already gone into in detail over the last few days. The principle of the parallel remains an accomplished fact, but the form to be taken by the commitment in favour of economic growth has still to be clarified. One aspect now seems clear: the commitment in favour of growth will not bring about any changes to the treaty on budgetary discipline. A declaration or protocol will be added and the treaty will remain unchanged.
Furthermore, in his first speech since the official announcement of his victory, Mr Hollande placed at the top of his list of objectives “the reduction of our deficits in order to bring debt under control”, whilst Angela Merkel was formally ruling out any idea of renegotiation of the treaty itself (which, as we know, has already been ratified by three member states and will soon be the subject of a referendum in Ireland). The French president and the German chancellor would not have announced their plans to meet once Mr Hollande takes up his duties, in other words next week, if they had not already agreed on this vital point.
The text of the declaration or protocol on economic recovery will not be revealed until it has been discussed by the European Council and put to Mr Van Rompuy and Mr Barroso, for obvious reasons. It will therefore be defined in cooperation, with the consensus of all. It is hard to understand why Ms Catherine Trautmann, president of the French Socialist delegation of the European Parliament, felt the need to publish a press release which reads: “on the budgetary treaty, it is clear that without renegotiation, we (Ed: the French) will retain the liberty not to ratify it” (our translation). Did she miss the memo about how the treaty will automatically enter into force upon its twelfth ratification? That any countries lagging behind, including France if such is the case, will remain on the outside until they adopt it? That any renegotiation is therefore impossible? That the liberty not to ratify it would quite simply mean coming out of the eurozone? And that Mr Hollande has never considered anything of the kind?
Principal agreed upon, text to be developed. Let us get back to more serious matters. The content of the text engaging the EU in economic recovery will be essential, by giving the European Council the formal footprint for this objective. The heads of state and government and the European Commission will discuss this soon; Mr Van Rompuy and Mr Barroso have fought to bring the talks forward as far as possible and Wednesday 23 May is very close at hand. The fact that the formal difference of opinion over the link between the “budgetary discipline” treaty and the commitment to economic reform has, in practice, been overcome gets rid of one artificial obstacle. But the lion's share remains to be done: defining the content of this commitment.
If the European Council goes no further than to define the principles and a few orientations, the agreement will be relatively painless. But if it is more ambitious, the job will be difficult in other ways. The number of ideas and orientations doing the rounds is highly impressive, and some of them appear audacious, as they introduce genuine innovations into the calculation and management of budgetary deficits, and also to some extent on the functioning of institutions such as the European Central Bank and the European Investment Bank.
The specific case of Greece is so serious and worrying that it calls for a commentary of its own.
(FR/transl.fl)