Artificially inflated. We will leave readers time for the news in this bulletin about the outcome of the European Summit to sink in, along with the reactions of protagonists and the decisions made. One aspect, however, requires some clarification, namely the artificially inflated disagreement between Angela Merkel and François Hollande about surveillance of any eurozone nation's potential budget excesses.
It is true that they did not come from the same starting points. The German idea of giving a European “Super-Commissioner” the right to veto national budgets that fail to respect the eurozone budget discipline rules is not shared by the French president and is subject to doubt by the Italian prime minister. But this is not in fact the subject that this particular European Summit was scheduled to discuss! It was initially planned to discuss it at the upcoming summit on 13 and 14 December!
Angela Merkel is perfectly aware of this and has never called for it to be talked about in October. Even ahead of the summit, at a press conference, she said that the German government believes that Europe “will have to be given the right to intervene in national budgets,” but that no decisions about this would be taken at this summit. Germany simply wanted to raise the question to “prepare for the December European Summit.” It is true that the German position is basically clear “Europe should be given a genuine right to interfere with national budgets if they fail to respect the limits laid down for stability and growth purposes.” Merkel added: “I know that several member states are not yet ready for this, but that doesn't in any way alter the fact that we should fight for it.” She pointed out during the debate that the summit currently under way “was not the summit where decisions were to be taken: it is for preparing for the decisions in December.”
This will not affect countries which meet their commitments. In any case, it seems clear that any European interference in national budgets would only affect eurozone nations that fail to respect the single currency management rules. The crucial question is how the rules are defined and the creation of a raft of complicated instruments, along with the role of the European Central Bank. Work on this is continuing among finance ministers at Eurogroup.
Already in existence. One must not forget that the instruments and procedures for examining member states' national budgets have already been set up. Draft budgets are already examined by the member states before being approved by national parliaments and the Commission already submits comments and criticisms. But this is no more than advice and suggestions, rather than binding decisions for the country in question. Moving to a binding mechanism would not be easy. It will largely depend on progress over the next few weeks. If there is genuine progress, then the disagreement between France and Germany (each no doubt supported by other countries) could be ironed out, but it is a simple fact that systems will have to be introduced at some point to prevent any repetition of the Greek scenario.
(FR/transl.fl)
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