Eurocrash: not a convention but a "forum"
Wednesday 5 September 2012
This is a follow-up to the story in Spiegel on 26 August, which revealed that Merkel was pushing for an EU treaty convention to be set up by the December European Council. Now we learn from Winterkorn that the Germans took this initiative because what is being done in Brussels under the leadership of Van Rompuy was not thought to go far enough. A key person in Merkel's initiative is her EU advisor Nikolaus Meyer-Landrut who, since February 2011, has been Head of Division 5 (European politics) in the chancellor's office and thus is the closest adviser of the German chancellor on European issues (pictured above, with Merkel). It was he who raised the idea of a convention in Brussels, but there was such a sharp reaction to theSpiegel article that, later that Sunday during the ARD broadcast, Merkel denied she was asking for one. Instead, she said, a "discussion forum" was needed, followed by a "binding agreement" on budget policy, taxes and social standards. That, by any other name, is a new treaty and, under Article 48 of the consolidated treaty, to get to that point – involving such substantial changes – a convention would be required. Nevertheless, EU diplomats have been quick on the damage limitation front, asserting that a convention lies in the realm of "unfounded speculation". But even here, the idea is not being ruled out entirely. Merely it is being stressed that any convention should come at the end of the current round of consultations, not least because there are great risks, as with the failure of the EU Constitutional Treaty in 2005. Thus, the focus is now on discussing the issues. First on the agenda is an exploration of whether a "common economic policy" is at all possible and then on how the right balance between "national independence" and collective action can be found, in order to improve European competitiveness. Also to be discussed is how a federal fiscal constitution would have to look in an EU that is not a unified state. In this, it is thought necessary to get away from the stark choice between the traditional Community method and national responsibility. Instead, there is pressure to develop a "multi-level system", although what this precisely entails has not been specified. Increasingly, consideration is being given to the questions of accountability and democratic legitimacy. Allied to these is the question of who decides in a debt union who can take on debt. It this to be the nations that have repay them, or the EU Commission, which is not liable for the payments? Then there is the issue of how far the Commission should intervene in the budgetary sovereignty or in the social security systems of member states. Writes Winterkorn, these are all issues which have been of concern to the EU since the crisis began. But, at the end of last June, Van Rompuy together with Barroso, Juncker and Draghi,presented a report on "economic and monetary union". It now transpires that the member state leaders greeted it with "little enthusiasm", and since then Van Rompuy has been under tight rein, with instructions to consult regularly. The member states are anxious to take ownership of the process, Winterkorn says. The diplomatic goal is for a broad and "open" debate on Europe and, in not a few capitals, there is entertained the suspicion that Brussels wants to use the crisis to transfer more power to the centre. The authors of the Van Rompuy paper were particularly criticised for putting in a lot of thought to things like a banking union, fiscal union and a common economic policy, but to the question of a "strengthening democratic legitimacy and accountability", only eight lines were devoted. Currently, through its inquiries in the other EU capitals, Berlin wants to determine whether there is sufficient willingness to launch the broad and "open" debate on Europe at the October European Council. At this stage, there would be no convention, but a "forum". The intention is that it should not be confined to "professional Europeans", but extended to national parliaments and civil society organisations - a convention in all but name. However, we are told that the "big question" facing Berlin at the moment is François Hollande's plans. The French president has supported the idea of communitising debt, but the general European policy he will adopt is still a mystery. Not a few are hoping that he will be influenced by Jacques Delors, who prepared the template for Economic and Monetary Union. On the other hand, some suggest that Hollande might have little inclination to risk major EU reform. The greatest political defeat he ever experienced was in 2005 when, as leader of the French socialists in the EU Constitutional Treaty negotiations, he supported the treaty yet lost the referendum. Berlin, though, is now taking a cautious line. To avoid the debate on "necessary reforms" falling victim of the widespread fear in the EU of major treaty changes, a two-stage approach is being adopted: first clarify what you want and then decide how to do it. Then it has to be decided whether the next move can be within the EU regulatory framework (as with the enhanced co-operation), or through intergovernmental treaties such as the Fiscal Pact. No doubt, that was being discussed yesterday when Merkel met Van Rompuy in Berlin. Much coverage was given to a higher profile meeting between Monti and Hollande, which produced little more than the usual extruded verbal material.
Probably, though, much more important in the grander scheme of things was the Merkel-Van Rompuy meet. But, of that, we are told nothing. The Lord may grant us a broad and "open" debate on Europe - but not just yet.
COMMENT THREAD Richard North 05/09/2012 |
Eurocrash: the greatest complaint of them all
Tuesday 4 September 2012
Apparently, when a complaint is made to the court, individual citizens can add their names to it and,in this case, about 37,000 have lodged their opposition to the ESM, making this an all-time record. The original case was filed by the "Europe needs more democracy" alliance in June, which was then supported by close to 12,000 people. But that number has now tripled in less than two months. Previously, the biggest complaint to Karlsruhe was on 2007, on data retention. That amassed 35,000 signatures. This current surge will not please the incoming head of the ESM, Klaus Regling. He is telling anyone who will listen that the fund would make "no sense" without Germany. He points to the predecessor fund, the EFSF, stating that if it had not existed, Portugal and Ireland would probably no longer be in the euro zone. Currently, Regling heads 57 staff and by the summer of next year, he wants to increase the workforce to 100. Once they get down to work, Regling believes that the eurocrisis could be overcome in one or two years, as long as all countries were strict in meeting their currency zone requirements and continuously improved their competitiveness. The Karlsruhe 37,000 would almost certainly disagree, although there might be a ready market for whatever it is that Regling is taking, if he believes the crisis can be over within two years. COMMENT THREAD Richard North 04/09/2012 |
Eurocrash: single currency isolates Athens
Tuesday 4 September 2012
In the real world economy, however, the steady decline continues with the latest example being Athens airport. According to Handelsblatt, so dire has been the effect of the Greek eurocrisis that the purchasing power of the average Greek family has dropped to its 1979 level, as a result of which air passenger traffic has plummeted. In the first seven months of 2012 the number of passengers in Athens dropped almost twelve percent from 8.4 to 7.4 million compared with the previous year. For international trips, the decline was close to 14 percent. Airlines have been quick to respond. From this winter, for the first time in 45 years Greece will have no direct service to the United States. Thai Airways has also thrown in the towel after 36 years, and Singapore Airlines has taken Athens off its destination list, along with Gulf Air and the Portuguese airline TAP. An even more ominous sign is that Brussels Airlines is cutting its service between Athens and the European metropolis, while other airlines are also thinning out their schedules. Air France is reducing flights between Paris and Athens from four to two. Lufthansa (when it is not on strike) is to cancel one of its three daily flights to Frankfurt and reduce the weekly flights between Munich and Athens from 19 to 14. But it is not only the eurocrisis which is damaging Athens airport. Industry observers attribute the fall in passenger traffic to excessive fees from the main operators, Hochtief AG, which are massively increasing the cost of tickets. Olympic Air's return flight between Athens and Thessaloniki, for instance, is €44.00 but becomes €50.64 with added fees and taxes. But, for some international flights, the costs are higher than the ticket price. For example, Munich to Athens and return is as low as €49 but the taxes and charges are € 69.73. While foreign airports can simply avoid Athens, this is having a deevastating effect on Greek airlines, Aegean Airlines, which is the largest customer of Athens airport, produced losses of €38.5 million on a turnover of just under €270 million. The biggest problem of all, though, is the contracting economy, which is expected to shrink by 4.5 percent this year but will probably shrink more. The great bonanza brought by the euro, therefore, has had the effect of shutting down contact with the rest of the world. How ironic it is that, in the heyday of the campaign for Britain to join the euro, the great scare was that Britain would be isolated in Europe. For once, as we gaze upon the picture of the weed-infested arrivals at Athens airport (above), we can enjoy the last laugh. COMMENT THREAD Richard North 04/09/2012 |
Wednesday, 5 September 2012
Posted by Britannia Radio at 07:18