The EU's economic, financial and monetary industry is in a state of flux. There were several significant developments at the end of 2006. I am not referring here to formal institutional decisions but rather to a series of changes, announcements, policy statements and suggestions that clearly call for action and progress in the direction of EU economic governance, re-examining management of the euro, taking better account of the inter-meshing of company taxation and the proper functioning the Common Market, and giving the EU greater weight in international monetary bodies (which will first require better cohesion within the EU because at the moment Member States are acting in an uncoordinated manner).
Mixed messages at the European Commission. The different changes have generally been noticed but separately from one another. As far as I'm aware, what is lacking is the big picture, an overview. The European Commission could combine the various elements but some areas are beyond its control because they come under intergovernmental cooperation. And for areas where EU powers exist, they are divided among various Commissioners and Directorate Generals, which don't always take the same line. The desire for an EU Stock Market has been made more or less explicit by the finance ministers of Germany and Italy and also, to an extent, France, but when asked, the EU Internal Market Commissioner, Charlie McCreevy, said that it was not for the Commission to express its view because the bourses are private companies and mergers and cooperation are a matter for market players to decide. The views of Commissioners Almunia, Kovacs, McCreevy and, in various respects, Verheugen, Potocnik, Kroes and Reding are far from uniform. Each one expresses opinions and takes initiatives in their own domain and when Jose Manuel Barroso acts as a referee and takes decisions, like where he blocked McCreevy's move to scrap the fee on cultural products, it led to an uproar. From a distance, Charlie McCreevy seems to have the same strong views as his predecessor Frits Bolkestein. Some of the other Commissioners tend to agree with him, while others do not agree at all.
Are responsibilities and powers over-fragmented at the European Commission? Speaking to the French Senate's Delegation for Europe last November, Vice-President Gunter Verheugen said it was undeniable that there were too many Commissioners now for the system to work optimally. The powers given to the new Bulgarian and Romanian Commissioners is a good illustration of the fact that powers have been too fragmented, he said. I am not certain he would have said the same thing so openly in Brussels, speaking to a European institution audience.
An overview. In my upcoming commentaries I will discuss a number of the recent changes, looking at initiatives and position papers from the European Commission and other sources. The overview will cover:
the discussions among finance minsters about the euro exchange rate;
the suggestion of turning the eurozone into an area of 'strengthened cooperation' with autonomous decision-making and operational power, and the reasons why the President of Eurogroup, Jean-Claude Juncker, is reticent about the idea;
Slovenia joining the euro and the prospects of other countries joining;
the disconcerting outcome of the most recent opinion poll on the euro;
Euronext's decision to join forces with the New-York Stock Exchange (NYSE), and dropping plans to merge with Deutsche Börse (scuppering plans to create a eurozone stock exchange);
EU Taxation Commissioner László Kovács's guidelines on harmonising and coordinating direct company taxation;
VAT increases in Germany and the economic and political impact; and
how the EIB (European Investment Bank) impacts on the EU's financial clout.
I am not planning to make any real revelations but rather to formulate an overview and comment on the positions of key players.
(F.R.)