Tuesday

9th Aug 2022

Opinion

Praise be to EU summits. You’ll miss them when they’re gone

  • "Summits may be the 20th century solution to 21st century problems but they offer more stability and comfort than being thrown at the mercy of the digital media and markets" (Photo: consilium.europa.eu)

The EU has always liked summits. Summits helped create it, and have been the medium through which it has evolved. Summits have always been how the Union resolved its problems – let them fester for a while, generate a bit of theatre, and then bring together political leaders to thrash out a deal to save the day. Where would the EU be without its summits?

The EU’s love of summits has been badly indulged by the on-going debt crisis. I count 14 'crisis' summits in the last 20 months, which is impressive going and very good news for the hotel and restaurant trade. Unfortunately, the seemingly endless negotiations on the debt crisis are increasingly like an interminable game of poker played by contestants who don’t understand that their opponents have worked out when they’re bluffing. While the summit agreements have gradually got more realistic in terms of Greece’s debts, the role and power of the EFSF and the ECB, and the fragility of the banks, the inadequacies of every summit communiqué have been swiftly exposed.

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But the most tangible achievement of the umpteen summits has been in making the euro crisis thoroughly boring for most people. The initial hope that I and others felt 18 months ago that Greece’s debt burden would be brought under control allowing the euro area to address its governance flaws, has been replaced by cynicism bordering on indifference. Like most Europeans I’m heartily sick of talking or being asked about the crisis. Perhaps this has been the aim of politicians all along – talk about the crisis for so long that people are finally fed up of hearing about it. If so, it doesn’t seem to have calmed the markets, the only group that seems to matter.

The blame doesn’t entirely lie with the politicians. The era in which the summit was king is ending. In the past, it was possible to reach broad agreements and then leave months for civil servants and diplomats to fill in the blanks. Negotiations on treaty change or the design of the single currency took years. Now newspaper websites and TV news channels offer live minute-by-minute coverage of summit meetings and political gossip, while electronic trading and algorithms allow traders to use summits as an excuse to take massive and virtually risk-free bets.

You’ve only got to look at the aftermath of the July and October summits, both of which produced results that probably would have held a decade ago. In July, leaders agreed a 21% hair-cut on Greece’s private debt and the ECB started buying Italian and Spanish bonds. Markets were placated for about a week. Three months on and 50% of Greece’s debts are to be written-off, the banks to be re-capitalised by €100bn and the EFSF’s funding capacity increased to a cool €1 trillion. Despite the sweat, tears and caffeine overdoses needed to achieve this, the lack of detail and the Greek government’s announcement - since abandoned- that it would hold a referendum on the deal brought almost immediate panic.

Still, the last summit gave us some decent theatre and some old-fashioned national stereotyping: the French picking a fight with the British; the Germans and French making fun of the Italians; everybody patronising the Greeks. With this casual nationalism and the major disagreement between France and Germany, the two countries capable of saving the euro, on the role of the EFSF and ECB, it is a minor miracle that any agreement was reached at all.

The Burkeian side of me likes the concept of getting Europe’s finest minds (or, at least, political leaders) around the table to thrash out a solution. At the very least, a summit gathering offers the promise that a problem is going to be resolved. But in an age where financial markets never sleep – you only have to watch the frenzied market activity in the weeks leading up to and then following a summit – and agreements can be immediately thrown into jeopardy by referendums and the clicks of traders’ computers, they are an out-dated throwback.

While the biggest winners from all these summits have been the restaurant owners and hoteliers of Brussels, what of the losers? Watching the visibly exhausted Presidents Van Rompuy and Barroso speaking in the European Parliament last Thursday it seems amazing that more politicians don’t crack under the strain. Meanwhile, the respective national diplomats deserve pity and well-earned trips to health spas and I wouldn’t want to be the person responsible for typing up the communiqués.

Although I think a few more summits will be needed before the euro’s ailments are cured we shouldn’t be so cynical about them. They may be the 20th century solution to 21st century problems but they offer more stability and comfort than being thrown at the mercy of the digital media and markets. We’ll miss them when they are gone.

The writer is a political adviser to the Socialists and Democrats group's vice-chairman of the European Parliament's economic and monetary affairs committee.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

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