Last week's European Council really deserved more attention. It was not as empty as the prophets of Europe's ineffectiveness make out. Last Saturday's edition of EUROPE (10714) is the only publication which presented a comprehensive overview of the results, as well as the reactions of the main players at the end of the session. Some aspects deserve a few comments.
Growth and jobs not forgotten. The commitment of the heads of state and government to growth and jobs this time went beyond the rhetorical phrases and expressions of good will. The summit decided that accomplishment of the Compact for Growth and Jobs will be accelerated - €120 billion of investment. It is not huge, but it's not to be sniffed at either. And if it's well used, its value will multiply. When the European Investment Bank's capital grows, investments increase, and their realisation will be carefully controlled. The same goes for the Structural Funds. With particular regard to Greece, an enormous programme is being studied, without any relation to its participation in the euro. EUROPE reported on Commissioner for Development Johannes Hahn's visit to Athens - we are waiting for reactions on the ground.
Admittedly public opinion is faced with the shock of the measures linked to budgetary recoveries in countries where the deficits are catastrophic - the EU's action will help with this. Contrary to what those who take advantage of the abuse and wastage would have us believe, several actions are under way and will be developed in favour of jobs for young people - the budgetary bailout of Erasmus is only one example.
Reciprocity required. The recovery of trade policy is essential. The Conclusions of the summit are encouraging - they confirm the EU's support for the liberalisation of world trade, but this time putting the emphasis on reciprocity and mutual benefit. This column will come back to this aspect - opening up borders remains the objective, but in conditions which are fair and just.
Differences ironed out. In the domain of the euro, the European Council did not restrict itself to preparing the December deliberations on the power of rejecting a national budget which might be incompatible with the required discipline (see this column in EUROPE 10714). In fact, the summit ironed out the differences that have for long been dragging on, and for which a solution is crucial in order to accomplish the essential aspects of the control of financial activity, including the abuses and speculation of the banks.
Germany has thus accepted what it previously rejected - in other words that all the banks in principle be subject to European supervision exercised by the European Central Bank. The date of 1 January 2013 has been set for the entry into force of this supervision, even if the head of the ECB, Mario Draghi, has explained that a few months will be required for this to be totally operational. The control of banking activities will therefore be gradual, but it is in the bag.
The adjustment of the mechanisms will not be easy. The banks of countries that don't belong to the eurozone will also be monitored by the ECB. But these countries, including Sweden, have no influence on the ECB. This is just an example of the difficulties to be overcome. The member states are not all on the same lines and don't have the same problems. The Conclusions of the summit state that the process towards true economic and monetary union (EMU) will have to lean on the legal and institutional framework of the Union as a whole, respecting the integrity of the single market. The Van Rompuy report (on which the presidents of the Commission and ECB are also working) will have to take account of these demands. At the end of the year, the legislative framework will have to be ready.
Let me recall that the banks have their share of responsibility in the difficulties they are encountering - in Spain; for example, they have played a role of persuading citizens to get into debt to build a number of houses going far beyond the forecast market demand. This is only one example and doubtless a large number of banks and financial organisms behave correctly. But the effective monitoring of banking activity is an essential step for the recovery of the eurozone.
One point in the bag. Is it necessary to recall that the European Council has for the first time included in the Conclusions the possibility of a budget for the eurozone? This all remains to be clarified but the political significance is evident - Europe is not waiting for unanimity, which clearly does not exist, to progress towards the Federation of Nation States or a similar formula. The Van Rompuy report will reveal more at the end of the year. But the principle of such a budget now features in the official texts, even if Mr Lamassoure's objections (see yesterday's edition of EUROPE) must be taken into consideration. I will return to this.
(FR/transl.fl)