Thursday

20th Jan 2022

Annual euro-pact summits will see refuseniks asked to leave the room

  • EU national leaders such as Sarkozy (r) are confronting increasingly volatile electoral situations (Photo: consilium.europa.eu)

Every year in the spring, governments that have signed on to the 'euro-plus pact' will hold a summit to take stock of its implementation, give management to new European economic governance and to deliver the 'peer pressure' needed to bring into line those countries that have not achieved the correct amount of ambition.

With 23 of the EU's member states now signed on to the pact for the euro, not just the 17 countries that use the single currency, the format for the summit will be '27-minus', in the phrasing of European officials, rather than '17-plus'.

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Euro-pact summits will take place every spring at the same time as the quarterly European Council. As with the eurozone summit that followed a special EU Council dedicated to the Libyan situation, those who are not part of the euro 'in-crowd' - meaning the Czech Republic, Hungary, Sweden and the UK - will then be asked to leave.

A senior EU official, who did not wish to be named, told reporters in Brussels on Monday: "There will be now a yearly meeting of the 23 members, to evaluate the euro-plus pact. It will be weird to tell the four others to leave the room, but that will be the case, normally during the spring EU Council in March."

Sweden for its part has not signed on as there is no majority in the parliament that supports the document, but Stockholm has indicated that it hopes to back the new economic oversight framework as soon as political conditions change, a move that would leave the UK as the only major European economy on the outside.

The senior EU official, briefly allowing a peek behind the curtain, explained that governments, even those nervous about the single currency, are desperate not to be left on the bottom tier in any two-tier Europe, where the key decisions that affect everyone are made by the top level.

"I was struck by the political psychology of it," he said. "A number of countries were very frustrated when they couldn't attend the 11 March summit [of eurozone leaders], even for countries who don't want to join the euro and where presidents are openly against the euro [such as the Czech Republic]."

"Others who want to join the euro were afraid that by not adopting the euro-plus pact it would be even more difficult to get into the euro [at a later point]."

The official also said there had been a sigh of relief that agreement on economic restructuring had been achieved before the bloc's increasingly volatile national political situations further deteriorate.

In recent days, Germany's Angela Merkel and France's Nicolas Sarkozy have been delivered bitter regional electoral setbacks, while Italy's Silvio Berlusconi has returned to court accused of embezzlement. Portugal's minority government has fallen and Finland is heading into a general election where a eurosceptic party, the True Finns, is expected to come second.

"I'm happy the bulk of the structural reforms was agreed before end of March," said the EU official, referring to the recent elections in France and Germany. "Europe is not only a union of 27, it's also the sum of 27 national political situations."

He said matters are getting increasingly difficult as a result of minority governments in Sweden, Denmark, Portugal and the Netherlands, as well as the "situation" in Belgium - home to the longest caretaker government in Western democratic history - and, he said, the rise of populism in "most countries."

The official also responded to the recent violent anti-euro-pact demonstrations that hit Brussels, wondering why the focus of the unions is only on the euro-pact and not the 'six-pack' of new laws on economic governance as well.

"There's something strange about these protests. People have not demonstrated against the taskforce report [a series of economic governance recommendations published last October] or the six-pack published by the commission, which are more binding and more 'anti-social' than the pact."

However, despite the electoral upheaval and civil opposition, the senior official remained optimistic about the single currency. "I was always confident the eurozone would not crumble," he said.

In recent months, EU leaders seem to have acknowledged more and more that they are in this together, he continued, adding that a country cannot simply leave the eurozone "as you walk out of a cafe" or default without hitting the others too.

He also mentioned that the situation in Portugal is dire, but that any movement on a bail-out is unlikely to come ahead before June.

"The political crisis doesn't help. They say they want to refinance themselves and have a very strict plan, agreed by the ECB and [the European Commission]. Up until June, there seems to be no problem with that."

Should Lisbon require the rescue however, decisions relating to the matter would not require any special EU summit.

"There is no need for an extra EU Council meeting on Portugal. If something were to happen, the decision would be taken by the [bail-out fund] and the eurogroup," he explained, referring to the group of countries that use the euro.

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