Saturday

11th Jul 2020

Sarkozy pushes for 'two-speed' Europe

  • Together but not for long? Euro and non-euro leaders at a summit. (Photo: consilium.europa.eu)

With France's borrowing costs on the up and with its prized triple-A rating under threat, French leader Nicolas Sarkozy is publicly advocating a fast-lane Europe for 'core' euro-countries.

"In the end, clearly, there will be two European gears: one gear towards more integration in the euro zone and a gear that is more confederal in the European Union," Sarkozy said Tuesday (8 November) during a discussion with students at Strasbourg University.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Key to his argument was that as the EU will one day take on the Balkan countries, deeper economic integration at 32, 33 or 34 member states will be "impossible."

Keeping non-euro countries outside the room when it comes to discussions on eurozone troubles has already sparked friction in the EU.

The 'outs' as they are called have been clubbing together to make sure that their views are not completely discounted as eurozone leaders rush through new policies.

The division has also produced sharp friction between Sarkozy and British Prime Minister David Cameron, with the French leader saying that he is "sick of" of Britain telling euro-countries what to do.

And despite Sarkozy's talk about 'core' eurozone integration, markets in the last couple of years have had no problem in rating countries within the euro-area very differently. The French president is keen to avoid the markets focussing too closely on France, as they are currently doing with Italy, sending Rome's borrowing costs soaring.

But there are signs that France is already on the markets' radars. On Wednesday, for the first time, traders flocked to German bonds deemed as "safe haven", while French papers were dumped, pushing up Paris' borrowing costs as Berlin's are inching towards zero.

How to deal with the ever worsening crisis has exposed the panic and the ad hoc decision-making among eurozone leaders.

According to unnamed Brussels-based officials quoted by Reuters, France and Germany have discussed plans for a radical overhaul that would involve setting up a more integrated and potentially smaller euro zone.

"France and Germany have had intense consultations on this issue over the last months, at all levels," the source told Reuters.

Both Berlin and Paris deny that this is the case.

But a speech held by European Commission President Jose Manuel Barroso in Berlin on Wednesday suggests he is taking the threat of such plans seriously.

"Let me be clear - a split union will not work. This is true for a union with different parts engaged in contradictory objectives; a union with an integrated core but a disengaged periphery; a union dominated by an unhealthy balance of power or indeed any kind of directorium," he said.

The EU is based on justice, equality and rule of law, "not on any power or forces," he insisted.

Barroso even went a step forward and suggested that all EU countries should adopt the euro, directly challenging Britain and Denmark, who are the only two EU members who have ruled out ever joining the single currency area.

"No, the euro area is not an 'opt-out' from the European Union. In fact all the European Union should have the euro as its currency. So the challenge is how to further deepen Euro area integration without creating divisions with those that are not yet in it," he said.

Non-euro finance ministers discuss approach to crisis

Finance ministers from the 10 EU countries outside the eurozone gathered on Monday night for an "informal dinner" in Brussels. The meeting, highlighting the rift between the 'ins' and the 'outs', took place in parallel to a euro meeting.

Cameron: 'We sceptics' want a flexible Europe

British Prime Minister Cameron has said his country should stay within the EU and shape decisions but would prefer a "flexible network" rather than the "rigidity of a bloc."

Agenda

This WEEK in the European Union

With lending between banks freezing up, contagion spreading to Germany, and EU economy chief Rehn fretting the euro has days to prevent collapse - the coming week is the mother of all crunch weeks for the European Union.

Opinion

Cameron needs to bring home the bacon

The UK premier will have to bring home some very definite commitments from Brussels to make it up for the promised referendum on the Lisbon Treaty and silence his eurosceptic critics, writes Helen Szamuely.

News in Brief

  1. Citizens' perception of judicial independence drops
  2. Irish finance minister voted in as eurogroup president
  3. Italy's League party opens office near old communist HQ
  4. 'Significant divergences' remain in Brexit talks
  5. Germany identifies 32,000 right-wing extremists
  6. WHO to hold probe of global Covid-19 response
  7. China accuses Australia of 'gross interference' on Hong Kong
  8. EU to let Croatia, Bulgaria take first step to join euro

Commission chief under fire for Croatia campaign video

EU Commission president Ursula von der Leyen recorded a video in support of Croatia's ruling party, which the EU executive said was in her "personal capacity" - and admits it was a "mistake" that this was not made clear.

Parliament vaping booths 'too confidential' to discuss

The European Parliament is refusing to disclose documents on an internal debate on whether to set up e-cigarette smoking booths at its premises in Strasbourg and Brussels, posing questions on how it handles transparency on relatively minor issues.

Stakeholders' Highlights

  1. UNESDANext generation Europe should be green and circular
  2. Nordic Council of MinistersNEW REPORT: Eight in ten people are concerned about climate change
  3. UNESDAHow reducing sugar and calories in soft drinks makes the healthier choice the easy choice
  4. Nordic Council of MinistersGreen energy to power Nordic start after Covid-19
  5. European Sustainable Energy WeekThis year’s EU Sustainable Energy Week (EUSEW) will be held digitally!
  6. Nordic Council of MinistersNordic states are fighting to protect gender equality during corona crisis

Latest News

  1. Michel lays out compromise budget plan for summit
  2. Border pre-screening centres part of new EU migration pact
  3. EU 'failed to protect bees and pollinators', report finds
  4. MEPs give green light to road transport sector reform
  5. If EU wants rule of law in China, it must help 'dissident' lawyers
  6. Five ideas to reshape 'Conference on Future of Europe'
  7. EU boosts pledges to relocate minors from Greece
  8. Hydrogen strategy criticised for relying on fossil fuel gas

Join EUobserver

Support quality EU news

Join us