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13th Aug 2022

Parliament worried new treaty divides Europe

  • MEPs say the fiscal treaty is a 'dangerous' exercise (Photo: European Parliament)

As negotiations on a new inter-governmental agreement on fiscal discipline reach the final stage, MEPs have warned that it risks dividing Europe and widening the democratic gap

Adopted with 521 out of the 695 votes cast, the non-binding resolution questions the necessity of the new fiscal treaty, noting that its aims - to balance national budgets - could be more effectively achieved through normal EU law.

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Speaking ahead of the vote, several MEPs insisted the text - which is meant to signed off by EU leaders in March - be as narrow as possible and merged within EU law within five, but preferably three years.

"This agreement would not have been our first choice of how to approach the issue. We must avoid a split EU and the rights of all EU institutions must be guaranteed," said German centre-right MEP Elmar Brok, who took part in the negotiations as an observer. He also insisted on the importance of allowing non-euro area states and European Parliament representatives in the eurozone summits - something also contained in the resolution.

A similar call was made by EU commission president Jose Manuel Barroso: "The euro area must be strengthened, yes, but not at the expense of the wider Union. We must not erect new governance and structures that would lead to split with member states that intend to join it in the future."

The commission also participated as an observer in the working group drafting the legal text, whose final version is expected on Thursday, ahead of a meeting of finance ministers early next week. Barroso also alluded to Germany's insistence that the fiscal treaty be in place before it agrees to the establishment of the permanent eurozone bail-out fund (ESM) this summer.

"We must also keep in mind that this agreement is an essential element of a larger package of action to respond to the sovereign debt crisis, including a strengthened and anticipated European Stability Mechanism, which is urgently needed for the stability and coherence of the euro area," he said.

MEPs from smaller groups showed less understanding for the bargain. "This intergovernmental agreement is a very dangerous exercise. We must limit its scope to the minimum: to the golden rule [on balanced budgets]," said Liberal leader Guy Verhofstadt, who was also part of the working group as an observer.

Green leader Daniel Cohn Bendit called the treaty "completely useless" and "not the response the crisis is demanding," while British Conservative MEP Martin Callanan said it "diverted attention and resources away from truly addressing the crisis."

Ratification problems

Yet even in a number of countries willing to sign up to the treaty - all EU member states except Britain - support for the text is less than certain. In Finland, a euro-member, the Social Democrats - a junior partner in the ruling coalition - is opposing the deal. The same goes for the Swedish Social Democrats, on whose votes the government is counting to pass the bill through Parliament.

Speaking to EUobserver on Wednesday, Social Democrat spokesman Mikael Sundesten said that "the government is very unlikely to get the support from other opposition parties, who are all against the treaty as well."

Meanwhile, the possibility of the pact triggering a referendum in Ireland, the Czech Republic and Romania poses further ratification uncertainty. The number of countries required to adopt the pact for it to enter into force has yo-yoed from 9 to 15, only to be lowered again to 12 in the third version of the text.

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