Monday

18th Jun 2018

EU leaders stalling 'irresponsibly' on crisis, MEPs say

EU leaders are stalling "irresponsibly" and even rolling back some decisions on banking union and further integration of the eurozone, MEPs said on Tuesday (23 October) in a debate on the outcome of last week's summit.

The two-day summit, which saw 10 hours of debates and disagreements among EU leaders on Thursday night, was defended by EU council chief Herman Van Rompuy and European Commission President Jose Manuel Barroso as an "intermediate" one, aimed at "reconfirming" earlier decisions and paving the way for more "substantial" decisions in the coming months.

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Van Rompuy acknowledged that the EU may have "underestimated the breadth and depth of the crisis in some member states."

But he insisted that changes were coming, even if in small steps. Transforming the eurozone into a closer political and economic union - as markets expect - will need some "excruciating work," he said.

"What we're getting at now is the crux, the hard core of sovereignty and solidarity. There are number of taboos that have to be touched."

Leading members of the European Parliament were not impressed.

"We have seen some happy faces again after this summit. But this is not enough for us. Instead of discussing a 'super-commissioner for finance' as German Chancellor Angela Merkel has been doing, we must take robust action," said Socialist leader, Austrian deputy Hannes Swoboda.

Spain and Ireland "need our help and support now, not in 2015 or in the distant future," he added in a reference to the June agreement that the eurozone bailout fund (ESM) will be used to prop up banks in these two countries.

After last week's summit it became clear that this scheme will need another series of decisions which will require the approval of the German Bundestag.

Liberal leader Guy Verhofstadt accused EU leaders of dragging their feet because next September's elections in Germany. "This is irresponsible in the middle of the crisis," he said.

The Liberal leader also dismissed proposed "contracts" between member states and the EU commission which would make reform pledges more binding.

"Europe is a political Union, based on common policies, based on binding legislation, not contracts," he said.

The idea, backed by Germany and penned down in a report drafted by Van Rompuy on how to bring about more economic and political integration in the eurozone, will be "further explored" at another summit in December.

Not all countries were happy with the development.

According to sources, Dutch Prime Minister Mark Rutte on Thursday night took a long time to agree to the loose wording. He had originally demanded that the option only be considered for countries that have overstepped the EU's deficit and debt rules. Rutte also questioned who would double-check such agreements.

The other sticking point that night was on the eurozone budget.

Lithuanian President Dalia Grybauskaite insisted that plans for a eurozone budget should be clearly separated from the upcoming EU budget for 2014-2020 as such, not just the negotiations on it currently under way. This reflects a lingering fear from new member states that rich countries in the eurozone will have a pretext for putting less money in the common pot.

Her main opponent on the matter was Britain's David Cameron, who wants to make sure that his country pays as little as possible to the joint EU budget. Other eastern countries also quietly supported her, but given the late hour and the early stage of the eurozone budget idea, they chose not to put up a fight. In the end, the text stayed as initially drafted, separating between the eurozone budget and EU budget "negotiations."

Cameron also raised questions on the proposed eurozone banking supervisor with respect to British voting rights within the European Banking Authority - a London-based umbrella organisation of national supervisors.

For her part, British centre-left opposition MEP Sharon Bowles, who chairs the economics committee, on Tuesday in Strasbourg also questioned the rationale for the "legislative rush" on the banking supervisor when clearly a few more months could bring more quality to the bill.

"We are heading towards a banking union-lite," she said.

"Is it just about pushing for good news before the public and the parliament can realise what it's about?" she asked.

Analysis

Germany out on top after late-night summit

EU leaders left Brussels Friday after having spent the best part of the meeting tweaking wording on a banking union that was supposed to have been clear in June. But the German slower timetable prevailed.

Greek bailout exit takes shape

At a meeting next week, eurozone finance ministers and the IMF are expected to agree on new cash, debt relief measures, and a monitoring mechanism to ensure that Greece can live without international aid for the first time since 2010.

Opinion

Eurozone needs institutional reform

Both the examples of Greece and Italy test the limits of a system with inherent weaknesses that feeds internal gaps, strengthens deficits and debts in the European South, and surpluses in the European North respectively.

Opinion

Europe could lose out in North Korean bonanza

South Korean businesses including Hyundai and Samsung are already scoping investment opportunities. Will North Korea become a 'new Vietnam' opportunity - or more like Myanmar, where slow Brussels policy-making meant EU exporters lost out.

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