• Facebook
  • Facebook
  • Facebook
  • Facebook

Search This Blog

Visit our new website.

Monday, October 21, 2013

European Council draft conclusions: have Merkel's 'reform contracts' made a comeback?

As we noted in our previous blog post - and as we predicted in our briefing trailing the German elections - Angela Merkel could now well be pushing for so-called 'reform contracts' or 'competitiveness pacts' (which is what they're called in the CDU/CSU manifesto). The idea involves trading exceptionally strong reform commitments in the eurozone periphery in return for German cash.

We've managed to get our hands on an updated version of the draft European Council conclusions (which is doing the rounds in Brussels) ahead of the meeting of EU leaders later this week.

And what do you know, the following paragraphs have made it in (our emphasis):
"The Commission will provide a first overview of the implementation of country-specific recommendations that will be a basis for the monitoring of their implementation. This will also assess growth and jobs enhancing policies and measures, including the performance of labour and product markets, the efficiency of public service, as well as education and innovation in the Euro area.

On this basis, work will be carried forward to strengthen economic policy coordination, including on the main features of contractual arrangements and of associated solidarity mechanisms."
It's a vague formulation - and hard to know exactly what it means - but we think it's at least fair to assume that the idea is back on the agenda (our view is it never quite went away). As we've argued repeatedly, the kind of beefed-up supervision and enforcement that the Germans have in mind would most likely require EU treaty change. The nature, scope and timing of such a Treaty change is anyone's guess at the moment, however.


jon livesey said...

This is a bit off-topic, but ISIS Europe just released a paper entitled "The consequences of a British exit from the EU and CSDP: An analytical timeline".

It purports to analyse the consequences for the UK and the EU of a British exit in defence matters, but in fact it simply states its conclusions as fact with no supporting evidence.

And the "conclusions" are what you would expect. Upon British exit the EU would consolidate its current defence integration further - "current", really? - and become stronger, while the UK outside the EU would lose influence and "its standing in World politics". Wow, just like that.

Ironically, the paper spends a lot of time insisting that the UK always acts in its own self-interest where defence is concerned anyway, and does not note how often the UK - and France - have actually *replaced* the EU in the many cases where the EU simply could not agree what to do - Balkans, Iraq, Afghanistan, Libya, etc.

It's a sad little paper, but what gets my attention is that in 2013 there are people who still think that this sort of "assume your conclusion" stuff is enough of a "contribution" to the European debate to be worth publishing, with accompanying Press fanfare.


Anonymous said...

No self-respecting government would ever sign such a contract. Any prime minister who signed it would be branded a Quisling. And no government who did sign it would ever honor it. The hubris of the euro elite is that they can produce pieces of paper that MUST be honored by sovereign nations. There is still no enforcement mechanism and there never will be. The EU is a failed institution. It is trying to negate economic law, specifically the tragedy of the commons. The euro is a commonly held currency that is being plundered to extinction. Time for Germany to quit its pipe dreams of lording over sovereign nations and simply mind its own business and set a good example. THAT is real leadership.

Rollo said...

Well, yes. Germany will insist on having a say in the government of other southern states, including France. Where Hitler failed, the EU might succeed.

Anonymous said...

I think what it is actually saying is that without the UK the eussr has no definitive defence capabilities, and not surprisingly the eussr would be severely weakened by our leaving it. Nothing new really just another poor reason to expect us to stay in it. We are part of NATO which is far more important than any self serving ideas of unelected commissioners.

Denis Cooper said...

Once again, it should be clearly understood that any EU treaty change which on paper "applies" only to the eurozone states, or more generally to member states other than the UK, will not trigger a UK referendum under Hague's so-called "referendum lock" law, which would be better described as a "referendum block".

So just as with the EU treaty change that Cameron gifted to Merkel on March 25th 2011 to provide her with a sound legal basis for the ESM, Cameron could simply give her whatever she wanted, and get it approved by Parliament, and there would be no legal requirement for the British people to be given the opportunity to express their view on what he had agreed.

Denis Cooper said...

jon livesey -

I am about to submit a comment here:


about your previous post on the fiscal position of an independent Scotland.

christina speight said...

Just like the EU - to write the minutes of decisions still to be taken - or rejected!