With regard to the permanent presidency of the Eurogroup, debate over names is not the main point (see this column of yesterday). Since the Eurogroup is an informal body that only euro area countries can join, the six-monthly rotation of the Council of the EU does not apply to it, since the EU Council involves the countries which are not part of the euro area. This is how things will be throughout all of next year. The issue was resolved at finance ministerial level by the countries involved when they decided to appoint a permanent President. The matter of who chairs the Eurogroup at the highest level exists, however, and an answer has to be found. But what matters is that the Eurogroup must be able to meet at any time at the level of heads of state and government.
Economic government, the real problem. Nicolas Sarkozy stated his view on this issue in his speech to the European Parliament on 21 October and in the press conference that followed. “Meetings of finance ministers are not equal to the seriousness of the crisis. Does anyone think that finance ministers could have made available €1,800 billion? Only heads of state and government could have done that.” He went further: “The euro area must have a clearly identified economic government. An independent central bank must be able to have discussions with a real economic government: government of the Eurogroup at the level of heads of state and government”. Could he be more clear? Germany is unable to accept this reasoning as it stands, it needs further clarification. This is understandable: Berlin cannot consider an economic government regulated in the same way as the Council of the Community (where German influence in no way corresponds to the economic reality) or make its financial resources available to other countries, beyond what is provided for in European budgetary rules. Moreover, member states do not all share the same economic policies.
Mr Sarkozy was at pains to calm these fears, stating that what the EU had to find was, simply, a united response to the crisis, and adding: “A united response does not necessarily mean the same response”, but a “road map, harmonisation, coordination”.
More is needed, however, to reassure the Germans, who have already set out what would seem to make up a real recovery plan (even if it is not called this): encouraging investment through one-off measures targeted sector by sector (environmentally friendly refurbishments in the building sector, taxation system that encourages the purchase of environmentally friendly cars); tax breaks to increase purchasing power, etc, but without compromising the aim of balancing the Federal budget. It is clear that Germany wants to be free to act as it sees fit and that it cannot finance those member states which cannot balance their books. That, however, does not mean that there cannot be a certain level of coordination, if the objectives and instruments are clearly defined.
The principle appears to have been accepted. There are several other points that have to be taken into consideration: the role of the United Kingdom, the possibility of EU member states having sovereign wealth funds, tax havens … the time is not yet ripe for decision-making, and the French minister for European affairs' call for caution is easy to understand. “Right now, the question of a permanent president for the Eurogroup is not up for discussion,” said Jean-Pierre Jouyet. However, the principle of these meetings would seem to have been accepted. It was pointed out that there was no provision for the European Council in the Treaty of Rome: it came into being in 1974 when Helmut Schmidt and Valéry Giscard d'Estaing felt that it was absurd that the Union did not meet regularly and officially at the level of heads of state and government. It is the same today for the Eurogroup. This, indeed, is what the European Parliament said (by 499 votes to 130, with 67 abstentions): “The first meeting of heads of state and government of the euro area requires further development”.
Mr Sarkozy said that Mr Juncker “would make an excellent president at the highest level, if appointed”. Some circles believe that extending the current presidency would be the best way forward (it has already been done). Then, at the start of 2010, Mr Zapatero could wear both hats: President of the European Council (it will be Spain's turn) and of the Eurogroup at the highest level. Let me repeat, however, names are not the key point. What is crucial is that the involvement of heads of state and government in economic and financial affairs becomes institutionalised. (F.R./transl.rt)