“Conscious of the obligation of the Contracting Parties, as Member States of the European Union, to regard their economic policies as a matter of common concern . . .”
THERE HAS been for many years a treaty obligation on member states to “regard their economic policies as a matter of common concern”. The opening lines of the “Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union”, agreed in Brussels on Monday, do no more than remind us of that obligation to share or pool our economic sovereignty. The treaty strengthens the administrative and legal means by which it is to be honoured – in the past, unfortunately, often more in the breach.
In one sense then, this is no decisive break with the past, no giant leap, but rather a limited attempt to deal with the unfinished business of building a lopsided monetary union whose architecture from the start was lacking a crucial fiscal co-ordination pillar. In another, however, what the treaty represents is a new, radical circumscription of traditional room for budget manoeuvre, a legal (though not necessarily constitutional) enshrining of “good housekeeping” rules on debt and deficits and automatic corrective mechanisms. Inasmuch, however, as these will be self-imposed disciplines and the enforcement powers granted to the European Commission and Court are based on existing treaty provisions, it is possible that the Attorney General will find that a referendum is not required to ratify the treaty.
Enter stage left, then, the Supreme Court, either courtesy of President Higgins or an aggrieved citizen. And the unhappy possibility, from a Government perspective, that it will be seen by a sceptical public to be forced against its will to consult them, another attempt to pull the wool over their eyes. Whether or not the Government is later forced to call a referendum, it must begin immediately to promote and legitimise the treaty for the Irish voter. Not as an onerous intrusion from outside, but as a positive and welcome step forward in the construction of the euro, an extension of the essentially democratic project that is the EU.
That is why the acknowledgment by the summit that it must temper the austerity agenda with new measures to stimulate growth, help SMEs, unblock constraints on the single market, and prioritise youth employment is important. To do so, however, within current budgetary constraints, as insisted, will not convince.
To sell the treaty will also require serious German support, the quid pro quo for accepting the new disciplines. Chancellor Merkel must end her prevarication and explicitly endorse an expansion of the bailout mechanisms and the idea of collectivising euro member states’ debt by means of eurobonds. The new disciplines must not be sold as an end in themselves, but a means of making a real fiscal union possible. She must also immediately drop the idea of appointing a Brussels proconsul to Athens to run Greece’s affairs, a profoundly undemocratic notion that is certain to poison the ratification debate throughout the EU.