Don't dramatise meetings for four. As part of the ongoing efforts being made to review the financial markets, the aspect that has provoked the most noise was the announcement of the two meetings between the four member states of the Union with the biggest populations: this Thursday in Paris at a finance minister level and on 29 January in London at a prime minister level (but for France, as we would expect, the president of the Republic will attend). This British inspired initiative prompted understandable reactions from those who were not invited and who denounced the intergovernmental nature of the meetings when the subjects to be discussed are now of a definite European hue and therefore common to all. As usual, Guy Verhofstadt was the clearest and most explicit on the matter (EUROPE 9579).
I believe that Gordon Brown's initiative can quite simply be seen as part of his efforts to rectify, as far as possible, the non-participation of his country in the eurozone, which excludes the United Kingdom from bodies that discuss and decide upon economic and monetary questions, such as Eurogroup and the European Central Bank. Meetings for four will not change this situation at all. They did in fact begin with three attending, without Italy. Last October, Ms Merkel, Mr Sarkozy and Mr Brown sent their colleagues a joint declaration in which they called on the Ecofin Council to draw up a report for the Spring summit that focused on the transparency and management of financial markets (EUROPE 9528). The Italian press dramatised the absence of Rome (Italy excluded, another failure etc.), even more so given that Romano Prodi was flabbergasted to learn that he had been kept completely in the dark about this initiative. Italy then managed to pull itself together and explained that this was a matter that involved the fourth European country member of the G7. We shouldn't place any more importance on this little game of national sensitivities than it warrants. Analyses and compromises that matter will continue to be elaborated within the framework of the Euro institutions and the Economy/Finance Council (obviously those in which the British take part). Nor did Mr Trichet or Mr Juncker respond to London's initiative: they are aware of their responsibilities and competencies and how to exercise them.
It's a European debate. The joint declaration by Merkel/Sarkozy/Brown last October was a mixture of banalities (call for greater financial market transparency and better risk management, the assertion that the EU should play a greater role in developing a global response to market turbulence) and the stating of the obvious (demand for transparency and cautious supervision of risk), with a few concessions to the British positions and a few to Germany's: risk management is and should remain the responsibility of the financial institutions and investors, within the scope of the national regulators. Moreover, on this last point, Italy did not agree at all: the Padoa Schioppa plan presented to the Ecofin Council on 4 December believes that a European market control system is necessary, with a single banking surveillance authority in the place of the current national authorities: several ministers said they agreed (see this column in EUROPE 9567). The debate is still open.
In concrete terms, the EU will pursue its rethink and define its positions in the normal bodies according to each remit: Ecofin Council; Eurogroup; the European Central Bank and technical bodies set up in this framework. A “road map” for future work has also been defined. Member states' orientations did not all converge on some essential aspects. I've already mentioned European market surveillance; the Ecofin Council will return to the Padoa Schioppa plan at the end of February in preparation for the Spring summit. There are also many divergences regarding the cautionary or restrictive measures to introduce for tackling certain third countries' sovereign wealth funds, a vast and extremely delicate subject because it involves relations with big third countries, the autonomy of entire sectors of European economic activity, as well as security and defence. The situation has got even more complicated since western banks have themselves been financing these funds.
Political trends for strengthening Eurogroup's powers and the different areas of its remit are increasingly being heard, which the British authorities naturally do not like. This aspect, however, has to wait for the introduction of the new treaty. For the moment, what counts is reform of the financial markets and correcting the excesses, which are at the source of the current slowdown in growth.
(F.R.)