RESCUE MECHANISM:EU LEADERS agreed an ambitious timetable for the adoption of new laws to fortify Europe's economic system with tougher financial sanctions and greatly increased surveillance of their internal economic affairs.
As they reopened the Lisbon Treaty to examine proposals for the creation of a permanent rescue mechanism for distressed euro countries, they endorsed a report from a ministerial task force on surveillance reforms that can be achieved within the bounds of the treaty as its stands.
Heads of state and government handed down a deadline of “summer 2011” to reach a deal with the European Parliament to give legislative effect to the new economic governance rules.
The provisions include new mechanisms for the European authorities to oversee labour and property markets in member states, including measuring prevailing conditions according to a “score card”. The objective is to provide a warning of the emergence of dangerous trends which could lead to price bubbles.
The EU leaders’ decision sets up difficult negotiations with MEPs as many of them believe the new rules are not strong enough, particularly after the quasi-automatic character of the financial sanctions was watered down at the behest of Berlin and Paris.
The European Commission, unhappy with this manoeuvre, had campaigned to weaken the leaders’ response to the task force report, presented by talks chairman Herman Van Rompuy.
Instead of endorsing the report, the commission wanted leaders to “welcome” it. Although this would have given economics commissioner Olli Rehn greater scope to reinstate proposals to remove political discretion over the sanctions, it now falls to the commission to carry through the legislative procedure.
At the heart of concern over the new regime is the fact the EU authorities have never before imposed fines on governments who break budget rules, even though they have long had the power to do so.
The talks with MEPs will not be easy. The liberal group led by Guy Verhofstadt, to which Fianna Fáil is affiliated, has been very critical of the package, and a succession of MEPs from other groups have taken a similar position.
The summit also saw the emergence of fresh divisions over the EU budget, with British prime minister David Cameron signalling a tough stance when talks begin on a budget round due to start in 2014.
European Parliament president Jerzy Buzek was criticised over MEPs’ demand for a 5.9 per cent increase in the EU budget for 2011. He then accused Mr Cameron of being “anti-European”.
Mr Cameron responded that he was not “anti-police”, even though he was cutting Britain’s policing budget. This prompted German chancellor Angela Merkel to ask whether she could be considered “anti-German” in the light of her budget cuts.