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3rd Mar 2024

Van Rompuy economic governance task-force fizzling out

  • The initiative appears to be returning to the commission (Photo: Council of European Union)

EU Council President Herman Van Rompuy's pet project, a task-force exploring EU 'economic governance', appears to be fizzling out as 'economic governance' endeavours developed by the European Commission take centre stage instead amid bickering between member states.

One EU diplomat told this website he believed there would not be much more to see from the task force, established in May as a hot-house composed of finance ministers to come together with ideas on how to achieve closer harmonisation of European economies

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"Van Rompuy has probably already achieved what he expected to achieve in terms of the European semester," he said, referring to the new six-month budget review period agreed by finance ministers last week. "We are not expecting a huge amount of progress more."

Another European official told this website "It's a task-force and that's it. What do task-forces do? They produce reports, reports which can acted upon or put in a desk or even a bin."

According to diplomats, there is "a very large degree of disagreement" over a "large number of issues" regarding the issue of sanctions, what they will be, when they would kick in, which parts of the EU budget they would apply to, who decides when sanctions are to be imposed."

Having first met toward the end of May, a further two times before the summer recess, and again on 6 September, the task-force set itself four goals under the rubric of "stronger economic cohesion of the union" - a phrase that from the beginning produced conflicting interpretations from London, France and Berlin.

Beyond the construction of new crisis-response mechanisms - some of which are now already being imposed - the task force is also supposed to come up with proposals for strengthening economic governance, to give teeth to EU rules on budget discipline that have historically been flouted with impunity and, finally, a way to reduce the divergences in competitiveness.

'Nebulous'

The task-force and, crucially, what punishment should be meted out to laggards - on Monday was criticised as "nebulous" by Berlin, which is growing frustrated at the lack of progress seen so far.

German deputy foreign minister Werner Hoyer on Monday said: "We hope that President Van Rompuy will soon present concrete propositions."

"This dossier is too important to be treated on the basis of nebulous texts," he said in Brussels on the margins of a meeting of EU foreign ministers, according to French and German media.

He added that the president had "chosen a way of working that sets imprecise foundations for debate."

While EU foreign affairs chief Catherine Ashton has on a number of occasions been the subject of member-state grumbles, most recently for choosing to travel to China at the expense of participating in the relaunch of Middle East peace talks, this is the first time the man whose job title in some quarters has been simplified to that of 'European President' has been publicly attacked by a member state.

Germany is instead looking for a "comprehensive dialogue" between the member states and the European Commission, something that so far "has certainly not been the case," he continued.

"The EU must show a focussed and determined attitude when it comes to constructing our common future currency."

The comments followed a editorial in the influential Financial Times Deutschland that ridiculed the task-force for its lack of concrete proposals, arguing for a shift back toward the European Commission to develop proposals, given its experience drawing up legislative proposals compared to an ad-hoc meeting of politicians.

The paper also quoted Luxembourgish finance minister Luc Frieden as suggesting that the task-force be dissolved.

"We always come together again and repeat the same principles," he said.

Slovakia's Ivan Miklos meanwhile slammed Van Rompuy's task-force for having "too many voices, too many views."

State of play

The task-force was originally given a deadline by EU premiers and presidents of the European Summit in Brussels this Thursday for producing its final report.

However on Monday, the Belgian six-month rotating EU presidency said that Mr Van Rompuy will only produce an interim "state-of-play" report at the summit.

There is to be a discussion on the subject at the meeting and further discussions by Europe and foreign ministers in October, after which the task-force will present its report.

According to the draft of a final statement to be made at the end of this week's European Summit seen by EUobserver, EU leaders simply "welcome the important progress made" and "underline the need to keep the momentum."

The statement makes no mention at all of any of the suggestions of sanctions that have been mooted by different member states, including halting delivery of structural funds to a member state or even temporary withdrawal of voting rights in the Council.

While in principle all member states back the idea of tougher discipline for countries that break any new rules put in place, there are wide divergences as to what form such sanctions should take. Germany backs the idea of a suspension of voting rights in the Council.

This is an unpopular position as it would likely require treaty change, although Finland and Latvia have both signed up to the idea.

Sanctions needed ASAP

Instead, the initiative appears to be returning to the EU executive, which is to unveil a package of legislative proposals regarding sanctions on 29 September.

However, the proposals will limit themselves to a discussion of a withholding of structural and possibly agricultural funds, with voting rights off the table as they would require a treaty change.

"This is not to say that treaty changes could not be up for discussion at a later point - the door is not closed - but everything that is to be proposed is feasible within the existing legal framework, the treaties, which means that they can be launched from the very first of the new year, in concert with the European semester."

For confidence to be returned to markets, the commission feels that the possibility of fresh sanctions being applied needs to be imposed as soon as possible "and we all know how long a treaty change would take: years. It's just not likely."

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