Countdown to Another Summit

Tomorrow (Monday 3oth), the European Council will meet again at an “informal meeting” in Brussels. This will be sort of a half-way milestone in the process that was initiated at the last formal Council summit on 8-9 December last year to find a lasting solution to the sovereign debt crisis that has been haunting Europe for the last couple of years now, and which should ideally result in the adoption of a treaty on economic stability and governance within the Eurozone (the so-called ‘fiscal compact’).

With that in mind, it’s a bit amusing to see that van Rompuy’s invitation letter spends a lot of words to emphasise how the meeting will focus on “youth unemployment, the Single Market and SMEs”, only to mention almost as an afterthought that “[w]e will also use this opportunity to endorse the ESM treaty and to register agreement on the new treaty on stability and convergence within the euro area.” It’s almost a given thing that this ‘registration of agreement’ will in fact take up the vast majority of the meeting.

So where are we at this point? Since the last summit on 8-9 December, a group of negotiators led by Council President Herman van Rompuy have been working on a draft text for the Eurozone fiscal compact treaty that is scheduled for adoption in March. The (as far as we in the public know) fourth and latest draft text of January 19th is probably the one that will be discussed at the summit, and it is not without problems.

The Polish government in particular has had some concerns about the extent to which non-Eurozone member states can expect to be involved in the future governance of the Eurozone and its new rules – the most recent draft proposes that whereas the full Eurozone members would meet in summit “when necessary, and at least twice a year” (Art. 12(2)), those other countries have ratified the treaty, but are not part of the Eurozone would be invited only “when appropriate and at least once a year” and only “to discuss specific issues concerning the implementation” of the treaty (Art. 12(6)). So we might see some wranglings over this and similar issues, but on the other hand, these are definitely questions of process, and the fact itself that they are being brought up at all would suggest that there is in fact agreement among the 26 on the general substance of the agreement.

The continuing crisis in Greece is another topic which has come back to the top of the headlines in the last couple of days, with reports that the Greek bailout could be up to €15 billion more expensive than anticipated, as well as especially the revelation by the Financial Times that the German government has proposed the appointment of a special EU commissioner who would essentially take over control of the Greek budget from the nation’s parliament – a possibly necessary, but still unprecedented infringement on the sovereignty of a member state.

There will apparently also be a telephone conference tomorrow between the ministers of finance to discuss Greece specifically, which would allow the heads of government at the European Council to focus their attention on the high-level issues. However, it’s fairly safe to assume that the Greek government will not appreciate these suggestions of being placed under administration, and could prove uncooperative at the summit – and if pushed too far, they might even come to the conclusion that the political costs of the bailout are too great (elections are planned for early April) and simply decide to enter an uncontrolled default.

Another topic which may be brought up at the summit is the proposal for an EU-wide  financial transaction tax (often incorrectly referred to as a ‘Tobin tax’), i.e. a small tax or fee on the exchange of shares, bonds and other financial instruments within the EU. However, I doubt that the FTT will be discussed on Monday, since it is highly controversial in itself, and would likely overshadow all the other important and more immediate topics.

We should probably also expect some more passive-aggressive behaviour from Cameron and Sarkozy towards each other, but I guess that’s pretty much par for the course by now.

In all seriousness, however, it will be very interesting to see how Cameron conducts himself at the summit. This will be the first high-level meeting since his veto at the last summit back in December, so the question is whether we’ll see a more conciliatory stance this time around, in an attempt to salvage some of Britain’s political capital and get at least some influence on the  or if Cameron will continue the hard-line approach. If the latter, this could turn out to be a very boring summit for him, because the other 26 will focus on their own business, and no one will be particularly interested in what he has to say. In that case, this summit would be the first in a new state of affairs in which Britain essentially finds itself reduced to the status of an observer on a core European issue; a remarkable enough event in itself, even if nothing else were to happen at the summit.

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