A European Union document says 26 of its 27 member countries are open to joining a new treaty tying their finances together to solve the Euro crisis. Only Britain remains opposed.
It came as little surprise as Britain – which is not in the Eurozone – had warned it would veto any treaty changes it thought might threaten its own national interests."I said before I came to Brussels, that if I couldn't get adequate safeguards for Britain in a new European treaty, then I wouldn't agree to it. What is on offer isn't in Britain's interests, so I didn't agree to it,"David Cameron said. He asserted that it was “the right thing for Britain. A tough decision, but the right one."Meanwhile, Italian Prime Minister Mario Monti called British demands at the EU summit negotiations unacceptable.Together, France and Germany want to remodel the EU to keep budget controls on its members, with German Chancellor Angela Merkel saying the Euro had lost credibility, with all EU members holding a duty to secure its future. “Words alone are not believed anymore, because too often we did not live up to our words,” Merkel said at a European People's Party (EPP) meeting in Marseille ahead of the summit.
‘Fining EU states’
The two nations pushed for a fiscal union to bind the Euro countries closer – forcing financially unhealthy economies to clean up their acts by imposing tougher punishments on deficit sinners, and bringing greater oversight by EU Institutions.“When you implement the proposals that they’re talking about, which will fine a country for failing to adhere to new rules about debt and deficits, well, you are basically taking a country that is bankrupt and saying, ‘Well, we are going to fine you,’ when that is actually absurd,” says Shane Firth from the New Direction think-tank.
Euro, charged and prosecuted
Yet even some eurosceptics acknowledge that maintaining the common currency system does have its good points.“It is an instrument. Now, an instrument is only as good as the way that you use it and the ability it has to do things. It’s a matter of discussing the Eurozone and what is it supposed to be – we have to rethink the whole system,” says former Belgian MP Lode Vanoost. Merkel and Sarkozy face a race against time – lest anyone forget, it took eight years to negotiate the original Lisbon Treaty. Now, effectively retiring the EU’s rulebook could open up a political minefield.And no matter how tough the new rules, the real question is – what will they change?“This will not solve the problem because the core of the problem is the Euro,” says Danish MP Morten Messerschmidt.The possibility of a Euro collapse brings yet another question: Is the Euro worth saving? For some at least, the answer is a resounding “Yes”: “For most politicians and for citizens at large, they rapidly see that a breakdown will be more expensive than maintaining what we have today, or to undertake the necessary structural measures,” says Karel Lannoo from the Center for European Policy Studies. At the same time, others say “No:” Speaking of the Eurozone, UK Independence Party MP Lord Dartmouth insists, “It was pretty clear that it was always going to end in disaster with very, very bad effects even for those countries which are not members of it. And the blame for that should be laid fairly and clearly with the European political establishment – whose obsessive pursuit of a United States of Europe has gotten us into this mess."If the Eurozone does survive, nobody seems too sure what it will look like, either economically or politically.
Agreements reached – at least, a few
Back at the summit table, there were a few positive first day moments – after nearly ten hours of talks, EU leaders agreed on a new fiscal pact to ensure tougher budget discipline."For the short term, we agreed on immediate action to overcome current difficulties; and for the longer term, we agreed on a new fiscal compact for the Eurozone," said EU Council President Herman Van Rompuy. “It means we all commit to a new, European, strong fiscal rule. It means member states will transpose it into their constitution or equivalent.”They also agreed that the currency bloc's permanent bailout fund, the European Stability Mechanism (ESM), will expand its lending capacity to 500 billion Euros, as Germany had insisted.Further, they agreed to loan an extra 200 billion Euros ($266.73 billion) to the International Monetary Fund to fight the crisis.To its backers, the Euro represents a dream: the grand idea of a single currency for what some would call the United States of Europe. But now that the problems are simply too big to ignore, the question being asked is whether they are also too big to solve.