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Thursday, December 01, 2011

A disturbing glance into the future of Europe?

As Europe waits for Germany and France to present their plans for EU treaty change - Bild has today published a rather disturbing photo of what a combination of Merkel and Sarkozy, i.e. 'Merkozy' might actually look like (it was only a matter of time before someone did it).

Bild notes that according to sources in Berlin, during summits, the pair are so in tune with one another that they require only the distance from the car to the meeting room, to clarify what they intend to do (note: that's sarcasm).

Meanwhile, more on the substantive side, Die Welt has managed to get hold of a plan by the leader of the FDP and German Economy Minister Pilipp Rösler, which, allegedly sets out the course for EU Treaty changes and the creation of a 'European Stability Union'. The document, which is called "Stability and Competitiveness in Europe", consists of several points that require Treaty change:
  • A stability board of experts should be created, whose job would be to make recommendations to improve competitiveness, examine the national budget plans and to participate in the monitoring process of the EU's competitiveness and fiscal policy. In addition, the board should assess whether the eurozone countries comply with their obligations under the Euro Plus Pact.

  • Furthermore, the document proposes a reduction in the current budget deficit limit allowed in the Stability and Growth Pact - from 3% down to a 2% (good luck!).

  • The familar idea of semi-automoatic santions also re-appear: where eurozone countries exceed the limit, there will be automatic sanctions imposed on them as opposed to the present sanctions regime which is basically discretionary, and reprimands aside, has never been applied in concrete form. So instead of requiring a majority in order to impose sanctions, a majority will be required to block sanctions. According to the document, this "reversed qualified majority voting" would also be applicable in event of preventive decisions, i.e. if it becomes clear that a eurozone member will soon be unable to meet its commitments under the Pact.
Sarkozy will tonight present his views on Treaty change, while Merkel will deliver hers tomorrow, although it is not entirely clear how similar her proposals will be to Rösler's. Interestingly, the Welt write-up of Rösler's document does not mention a potential role for the ECJ (which was raised in a list of proposals leaked earlier from the German Foreign Ministry), or the creation of an economic government for the eurozone members only.

As ever we'll keep you posted...

1 comment:

jim bachman said...

No matter how much the politicians fiddle with the rules, regulations and institutions, the only way I see the debt being repaid is to increase the money supply so watch out inflation here we come.