The leaders of the national governments will gather in Brussels tonight (8 December) for the start of a European Council that is scheduled to end on Friday afternoon, but might well continue much longer.
At the heart of the Council’s discussions will be how the treaties might be revised quickly to persuade the financial markets – and the European Central Bank (ECB) – that the public finances of eurozone countries will be brought under control.
Scarred by the experience of ratifying the Lisbon treaty, which came into force barely two years ago, the EU’s senior politicians are terrified of submitting treaty changes to popular approval. But Angela Merkel, Germany’s chancellor, is insistent that treaty change is essential. The ECB has called for a fiscal compact, enshrining greater budgetary discipline in law.
The members of the European Council will try to balance the need for credible changes to the governance of the eurozone against their fear that extensive treaty change would take a long time and might fall foul of a ‘No’ vote in a referendum or a national parliament.
In the run-up to the summit, Herman Van Rompuy, the president of the European Council, this week set out possible amendments that could boost economic discipline without requiring – in his judgement – ratification by national parliaments.
Van Rompuy says that a requirement for eurozone countries to balance their budgets could be written into EU law by a lightweight procedure that needs only a unanimous decision of national leaders.
But he warns that giving the European Commission the power to order governments to revise their national budgets would have to be ratified by national parliaments. Others suggest that it might require a referendum in such countries as Ireland, the Netherlands and Austria.
Merkel has been arguing that the Commission should have more power to impose sanctions on countries that breach deficit rules.
Nicolas Sarkozy, France’s president, has reluctantly sided with Merkel on this point. The pair want treaty changes agreed by next March so that ratification can begin before June.
What is still in doubt ahead of the European Council is whether it will be possible to agree treaty changes among all 27 member states. Merkel and Sarkozy have said that that is their preference, but they warned in a letter to Van Rompuy sent yesterday (7 December) that if agreement among 27 was not possible, then the 17 countries of the eurozone should go ahead on their own with a separate treaty. In the letter, they also called for “a new legal framework, fully compatible with the internal market, to make faster progress in areas such as financial regulation, labour markets, convergence and harmonisation of the corporate tax base and the introduction of a tax on financial transactions”.
David Cameron, the UK’s prime minister, warned this week that if there were negotiations on extensive treaty change he would demand safeguards for the UK to protect the City of London as the EU’s leading financial centre and to keep the single market open. He said on 6 December: “If there is a proposal for full treaty change, we would have our own requirements for treaty change.”
Some MEPs are pushing for treaty changes to be agreed by a convention made up of representatives of national governments and national parliaments and MEPs.
Andrew Duff, a UK Liberal MEP who was a member of the 2003 convention that drafted the failed EU constitution, said that Van Rompuy’s ideas for limited treaty change were “fraught with difficulty”.
They were, he said, “a radical intervention by the EU into the constitutional order of member states”, and as such would require a “full-scale treaty change”. “We have to restore market confidence, but also restore the democratic confidence in the EU,” Duff said.
Dany Cohn-Bendit and Rebecca Harms, the leaders of the Greens in the Parliament, said that a change to the treaties that enshrined rules on fiscal discipline, if it were to have democratic legitimacy, would have to involve “the directly elected European Parliament and this implies following the convention method”.
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