Better than expected. Only knowledge of what went before can explain that no small part of the media should have interpreted as a crack within the Convention last week's debate, in plenary, on the EU's economic governance. It's rather the contrary: differences came to light a month earlier within the specialised working group, and plenary greatly redressed the situation. The significance of Commissioner Michel Barnier's address has been especially misinterpreted, as his negative assessment related to the conclusions (or, rather, the non-conclusions) of the group and in no way the debate in plenary (that had only just begun). He clarified the Commission's suggestions, which does not propose any institutional revolution but aims at greater efficiency, so that the co-ordination of national economic policies is something serious. The Convention itself went beyond what could be hoped for, as a large majority spoke in favour of both strengthening the economic chapter of Economic and Monetary Union (EMU) and the creation of a new working group responsible for studying the social aspects of the future Constitutional Treaty.
It's not the readers of Agence EUROPE who would have fallen into such confusion, as they had already been warned on 16 October (by this section, under: "the dossier that's stuck"), and they were then able to follow developments on almost a daily basis. I even denounced the absurd risk that the Convention should adopt a less forward-looking stance than that of the heads of government! In plenary, stances against the consolidation of the wonded leg of EMU were also expressed, with at times judicious observations that are worthy of reflection, but the general trend was clear, even though two points of divergence remain within what may for now be called the majority; a) Germany is against the euro group being made official; b) reservations remain as to majority voting for tax issues linked to the smooth running of the greater market without borders. The conclusions that Valery Giscard d'Estaing has announced on behalf of the presidium will substantially exceed the stances of the specialised group and propose the creation of a new group on social issues. These are no definitive results, nor are they a question of "consensus", but progress is substantial and point to a change of path and atmosphere in an area which, one month earlier, was deadlocked.
The six founding countries taking the lead. I would have been less affirmative on the significance and scope of this turnabout had it been limited to the parliamentary components of the Convention and the Commission's representatives. But the fact is there: several governments have also spoken out in favour of strengthening the economic chapter of EMU. Stances along these lines by Louis Michel (Belgium), Jacques Santer (Luxembourg) and Gijs de Vries (Netherlands) were no surprise. But also speaking out in favour on most of this were Germany (except for the status of the Eurogroup), France (Mr. Moscovici backed the creation of a genuine Union economic government), and Italy (Mr. Fini suggested a system of "enhanced co-operation" for the Eurogroup open to all countries as they are able to join the euro). If I'm not mistake, I've just cited the Community's six founding countries. Furthermore, the new direction may increasingly be felt within the generally gelled and united group of finance ministers. Mr. Juncker was against for a long time; but given that he is a head of government, one should not be over-surprised. Belgium's Didier Reynders was very firm and explicit: "we must strengthen co-ordination of economic policies. The monitoring of commitments made must be assured, with procedures in case of failure. This no doubt requires a strengthened role for the Commission and qualified majority voting for implementation of structural reforms in financial services, as well as for tax". At the same time, the Franco-German evolution is important as it is based on economic considerations. Francis Mer and Hans Eichel are in particular demanding greater convergence regarding inflation. If account is taken of the budgetary chapter, France and Germany (with Portugal) are the most at fault. But other Member states are not robust enough in controlling prices, and their excessive inflation rates influence the average of the euro zone, leading the ECB not to cut its interest rates. The result is less growth, which worsens the budgetary difficulties. It's a vicious circle. More robust anti-inflationary discipline would allow for a less restrictive monetary policy. That's but one example, but is topical, and explains France and Germany's pro-co-ordination attitude.
The Convention's new directions will create problems for the United Kingdom and its positioning. I shall return to what I don't hesitate to call the English drama. (F.R.)