Thursday 6 September 2012
While all eyes are on the Draghi show, Handelsblatt comes up with a stunning development: a trial balloon floated by the quartet for the new treaty.
Responding, presumably, to Merkel and others, who have been calling for more "democracy" in the eurozone, the four presidents of the quartet - Van Rompuy, Barroso, Juncker, and Draghi – have come up with the idea of giving the eurozone its own parliament.
But this is just one element which emerged from a meeting of the quartet last Monday, with the four presidents now "working at full speed" on a "radical new architecture" for monetary union, far beyond anything so far proposed.
A key element is the co-ordination of fiscal policy. The governments of the eurozone countries would have to submit their draft budgets to Brussels for approval. The commission could exercise its veto if an excessive deficit threatened. National government would be forced to make adjustments, which would then be voted on in the eurozone parliament.
Within that framework, member states will be permitted to make their own taxation and spending decision, "as long as total debt and deficit in line with EU requirements", but there is a plan to impose a minimum rate on corporation tax to limit "harmful tax competition".
Overall, fiscal and economic policy would be approved by the eurozone parliament. But this new body is not just a smaller version of the EU parliament. It would be made up of MEPs and national parliamentarians.
However, we are told, there is "considerable opposition" to this idea, especially from the ten non-euro states. Such "reforms" will, of course, require treaty changes, which are "unpopular" and may also encounter resistance in countries such as France and the Netherlands.
Despite this, the direction of travel is now becoming clearer by the day. A "core community" is in the making, with further integration focused on that group, leaving peripheral states in an outer circle. The "colleagues" are retreating to their bunker.
But this is just one element which emerged from a meeting of the quartet last Monday, with the four presidents now "working at full speed" on a "radical new architecture" for monetary union, far beyond anything so far proposed.
A key element is the co-ordination of fiscal policy. The governments of the eurozone countries would have to submit their draft budgets to Brussels for approval. The commission could exercise its veto if an excessive deficit threatened. National government would be forced to make adjustments, which would then be voted on in the eurozone parliament.
Within that framework, member states will be permitted to make their own taxation and spending decision, "as long as total debt and deficit in line with EU requirements", but there is a plan to impose a minimum rate on corporation tax to limit "harmful tax competition".
Overall, fiscal and economic policy would be approved by the eurozone parliament. But this new body is not just a smaller version of the EU parliament. It would be made up of MEPs and national parliamentarians.
However, we are told, there is "considerable opposition" to this idea, especially from the ten non-euro states. Such "reforms" will, of course, require treaty changes, which are "unpopular" and may also encounter resistance in countries such as France and the Netherlands.
Despite this, the direction of travel is now becoming clearer by the day. A "core community" is in the making, with further integration focused on that group, leaving peripheral states in an outer circle. The "colleagues" are retreating to their bunker.
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