Institutional Affairs

'Small, small, small' EU treaty change to deliver 'quantum leap'

29.10.10 @ 17:26

  1. By Leigh Phillips

BRUSSELS - European leaders have given way to German demands for a change to the European treaties, but the procedure for the change and its size has been calculated explicitly to avoid the danger that it could provoke referendums in some EU states.

  • The Pandora's Box of referendums, as happened twice in Ireland, had to be avoided at all costs (Photo: infomatique)

In a significant victory for German Chancellor Angela Merkel, early on Friday (29 October), EU prime ministers and presidents backed "a limited treaty change" to deliver tighter fiscal discipline and allow for the creation of a permanent bail-out fund for members of the eurozone.

European Council President Herman Van Rompuy is to explore the details of how this will be achieved and what language should be used in the change. He will report back to EU leaders with his conclusions in December.

Viritually all EU member states had vehemently opposed any treaty change going into the summit, but in the end they were convinced by Germany's need for the change in order to avoid a legal clash with its Karlsruhe-based Constitutional Court.

The leaders agreed to construct a permanent crisis mechanism to fill the void left when the existing but temporary €110 billion bail-out package for Greece and €440 billion fund set up for the eurozone as a whole expire in 2013.

According to diplomats, it is currently unclear whether this new mechanism would involve participation of eurozone members alone or the full 27 EU member states, including those who do not use the euro.

Germany is worried that any permanent structure could run afoul of treaty rules forbidding EU bail-outs of member states and be struck down by the country's strict Constitutional Court, thus opening the euro once again to an assault by markets as occurred in the spring.

Caught between the need for a structural change and their fear of both the activism of Karlsruhe and the growing euroscepticism of citizens, the other leaders signed off on the move only so long as the change envisaged was "small, small, small - the smallest possible ... in order to ensure there is no possibility of referendums," in the words of a Danish diplomat speaking to EUobserver.

The method EU leaders chose to achieve the change will be via what is called the "special revision procedure," introduced by the Lisbon Treaty, under which the treaty can be amended by the European Council alone, so long as there is unanimity and the changes do not extend the competences of the European Union.

In this way, a full Intergovernmental Conference, normally required ahead of a treaty change and which involves consultations with the European Parliament and negotiations amongst the different member states, is also to be avoided.

"This leaves out the parliament and the possibility that different countries would come to the table with different things they want to add or take away from the treaty," the Danish diplomat continued. "We had to make sure that we did not open the Pandora's Box."

Ms Merkel was quite clear however, that the changes will deliver a "quantum leap" for the Union in terms of economic convergence between member states.

"This is a quantum leap as to the future handling of the treaty - especially the preventive arm for deficit procedures allowing for quasi-automatic sanctions," Ms Merkel told reporters after the summit. "One important measure I want to underline: the surveillance of competitiveness of country - so that council works as economic government you have all been asking me for."

Asked about concerns in the UK and the Netherlands about a potential referendum on the treaty changes, Ms Merkel explained: "That's why we have said 'limited changes,' limited to the crisis resolution mechanism that will be the object of it."

The "nuclear option," as one other EU diplomat described the potential sanctions of profligate spenders in the bloc via the withdrawal of voting rights from the Council of Ministers, was kicked into the long grass. Germany had been adamant that punishment for overspenders be severe.

"Suspension of voting rights are not off the table," said Ms Merkel. "But they would require a more comprehensive treaty change."

Such a change will also be looked into by Mr Van Rompuy, but it is understood only after the initial "limited" treaty change is made.