Solidarity crisis

The financial question is an increasingly political issue

“It’s not only an economic question, it’s a political problem”. During the European Parliament sitting of November 22 to 25 in Strasburg, this phrase was reiterated several times. Topics addressed included national balances (primarily Ireland’s), euro zone stability, financial market turmoil, along with the Community budget. The figures were coupled by diverse stances, by MEPs’ arguments, by differing views among the various Community institutions and vis a vis EU Member States. Thorny issues. A parade of leading politicians took the floor: EU Council president Herman Van Rompuy, EU Commission President José Manuel Barroso, the President of the Central Bank in Frankfurt Jean-Claude Trichet, the Commissioner for Monetary Affairs Olli Rehn, the Secretary of State Melchior Wathelet for the Belgian presidency-in-office, Budget Commissioner Janusz Lewandowski. As relates to EU’s 2011 budget, after the deadlock in negotiations between the Council and the EP (the two budget authorities), the Commission decided to present a new draft budget by December 1st after which a new round of negotiations will begin that will involve Ecofin, the European Parliament and the Summit of the Heads of Governments and State in mid-December. At this point it is clearly not “an economic question”, meaning that a financial agreement has already been reached. However, there are hanging thorny issues regarding the attribution of powers to the parliament provided for in the Treaty of Lisbon and also on the three-year budget. Funds for the new responsibilities. Assembly president Jerzy Buzek recalled that MEPs are ready to approve the draft-budget put forward by the Council, but that “In exchange we wanted agreement on the question of flexibility in the budget” (to subsidise new priority plans or emergencies) “and on how the Lisbon Treaty should be implemented with a view to future talks on the MFF and own resources. Almost all political groups except for the Euro-sceptics upheld this stand. Group leaders also criticized national governments “which are asking the EU to perform various tasks without granting an appropriate budget to Brussels”. EPP leader Joseph Daul said, “the present budget does not take into account the EU’s new competences; it does not take into account the budget review Parliament has asked for and contains no funding for the 2020 strategy” for growth and employment. For the S&D group, Martin Schulz said, “The discussion is not about money anymore but about the direction in which the EU is developing”. “”New tasks cannot, at least not entirely, be financed within the current budget”, said Lothar Bisky of the GUE/NGL group.Saving Ireland, saving the EU. The debate heated when the time came to discuss the outcomes of the summit of the heads of Government and State at the end of the October, EU governance, eurozone stability measures, and the provisions providing for financial support to Countries undergoing financial crises, starting from Ireland (although Portugal was mentioned on several occasions). Council president Herman Van Rompuy illustrated the strategy to avoid “excessive deficits and to strengthen the European Union if a Member State once again jeopardizes” common stability. On his part, Commission president José Manuel Barroso said he is “convinced of the importance of safeguarding the financial stability of Ireland, the euro area and the entire EU” and underlined that the proposals of the Executive must become operational “as soon as possible in order to strengthen European economy” and thus remain a “global player”. Crucial weeks lie ahead. MEPs took different stands. Some of the speeches upheld the importance of rigorous public accounts, others highlighted the “dangers of protectionism” and national closures, others still recalled that the integration project must be based on the solidarity between States. Liberal leader Guy Verhofstadt focused on “sanctioning those Countries with offset balances”, that could become “automatic” and thus be directly “managed” by EU institutions. “The real problem” said Rebecca Harms, of the Greens – is that a European spirit of solidarity is missing, even on the part of Germany, although the Irish crisis is also a German crisis”. According to MEPs the forthcoming weeks will be crucial as relates to the budget and to measures to avoid the collapse of the euro currency.

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