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Eurocrash: not a convention but a "forum"

2012-09-05 00:02:35

Merkel 847-jyd.jpg

While the ECB in Frankfurt and the EU institutions in Brussels are working to rescue the euro from its acute crisis, writes Martin Winterkorn for Süddeutsche Zeitung, Berlin has been probing discreetly to find out whether its partners are willing to "reform" the European Union again. Above all, the quest is on to find out how far they are prepared to go.

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 the Spiegel 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.