De Morgen, 19 november 2009
Pieter Cleppe stelt dat een benoeming van Van Rompuy geen goed vooruitzicht biedt voor kleine landen. Cleppe leidt het Brusselse kantoor van de denktank Open Europe, die zich richt op fundamentele hervorming van de Europese Unie, www.openeurope.org.uk. Wordt Herman Van Rompuy een dezer dagen op het schild gehesen als eerste EU-president, dan is dat geen reden tot juichen, schrijft Cleppe. Cleppe, die zich tussen eurofederalisme en -scepticisme in profileert als een eurorealist, voerde de voorbije dagen in Britse en andere Europese pers scherp campagne tegen de premier van zijn land. "Herman Van Rompuy als Europees president: geen goed vooruitzicht voor kleine landen."
***
Vandaag of in de komende dagen wordt duidelijk wie de eerste "President van de Europese Unie" zal zijn. Premier Herman Van Rompuy (CD&V) lijkt alvast een goede kans te maken. De benoemingsprocedure is minder transparant dan een pausverkiezing en zoals een diplomaat het de afgelopen dagen stelde, mocht men dan ook de "kremlinologie" weer van onder het stof halen, wat de kunst was om te weten te komen wat er zoal omging in de machtscorridors van het Kremlin voor 1991. Wat een contrast met de verkiezing van de Amerikaanse president, waarbij miljoenen hun stem kunnen uitbrengen en die wereldwijd emotie losmaakt.
Dat België de eerste Europese president zou mogen leveren, heeft zonder twijfel een aantal voordelen voor ons land, net zoals het een eer is dat Jacques Rogge IOC-voorzitter is. Nochtans wegen die beperkte voordelen niet op tegen de nadelen van de visie die Herman Van Rompuy heeft - en met hem een groot deel van de Belgische politieke klasse - over de Europese Unie. Volgens die visie moet het vetorecht van lidstaten zoveel als mogelijk sneuvelen, ook op het vlak van justitie, binnenlandse zaken, fiscaliteit, sociaal beleid en buitenlands beleid, zoals het Europees programma van CD&V stelt. De Europese Grondwet moest er voor de partij in 2004 "hoe eerder hoe liever" komen. Van Rompuy zelf stelde al in 1989: "Eenmaal de EMU gestalte heeft gekregen, zal het streven naar de politieke unie een extra elan krijgen als logisch en onmisbaar complement van de EMU." Ongetwijfeld vertolkt hij de grondstroom onder onze politici.
Regelneverij
Nochtans zouden zij beter moeten weten. Zoals een studie van Open Europe duidelijk maakte, is 69,5 procent van de impact van regulering in ons land afkomstig van het Europese beslissingsniveau. Toegegeven, de nationale regeringen hebben daar via hun vertegenwoordigers in de Raad een belangrijke zeg, maar de transparantie in de totstandkoming van de wetgeving is er ondermaats. Misschien net daarom houden regeringen zoveel van de EU?
Het is ronduit onrustwekkend te noemen dat meer dan twee derde van onze voorschriften van het meest gecentraliseerde beleidsniveau afkomstig is, waar de macht van de democratisch verkozen regering van één land om belangrijke beslissingen te wijzigen, miniem is. De impact van die voorschriften is dan nog eens toegenomen met 50 procent in de laatste vijf jaar, ondanks pogingen zoals de "Better Regulation Agenda", een goedbedoeld initiatief van de Europese Commissie tegen regelneverij.
Herman Van Rompuy hebben we daar nog niet over gehoord. Integendeel, hij was steeds een groot voorstander van het Verdrag van Lissabon, dat het nog makkelijker maakt voor de EU om tal van nieuwe wetten te maken. Die vrees zorgde er volgens de Duitse krant Frankfurter Allgemeine Zeitung alvast voor dat het nieuwe Duitse regeerakkoord een voornemen voorziet om de Europese regels niet nog eens aan te dikken bij de omzetting naar nationaal recht, zoals vaak gebeurt. Voor een KMO¿land als het onze zou de zorg om overregulering tegen te gaan op de eerste plaats moeten staan. Het makkelijker maken voor een reguleringsmachine om nog meer wetten te maken, zou daar niet mogen bijhoren.
Van Rompuy verdedigde afgelopen week - op een geheime bijeenkomst - het idee van een Europese belasting op financiële transacties. Opnieuw gaat hij daarmee in tegen het belang van kleine landen zoals het onze. Niet alleen verdwijnt daarmee de discussie over landen zoals België die netto bijdragen aan het Uniebudget, dat overigens verleden week voor het vijftiende jaar op rij geen goedkeuring kreeg van de Europese rekenkamer. Bovendien zorgt het harmoniseren van de tarieven in de praktijk ook voor hogere belastingen. Zij die daarvan kunnen meespreken, zijn onze horeca-uitbaters. Jarenlang eisten zij om een verlaging van het btw-tarief van 21 procent, en hoewel nagenoeg alle Belgische democratisch verkozen politici het daarmee eens waren, heeft het toch tot verleden jaar geduurd eer dit mogelijk werd.
Geen wonder, aangezien een akkoord op EU-niveau noodzakelijk was over dat Europese belastingtarief. Zo moeilijk is het nochtans niet: als je als klein land de beslissingen laat nemen door de EU, verlies je heel wat macht.
Ontspoord EU-project
Laat er echter geen twijfel over bestaan: de EU was bij haar ontstaan een goede zaak, en in de eerste plaats voor kleine landen. De EU heeft vrijhandel en vrij reizen mogelijk gemaakt, maar helaas is dit mooie project de voorbije twintig jaar ontspoord tot een project voor een Europese superstaat, al wilden sommigen dat al van in het begin.
Eén van de meest onrustwekkende evoluties vindt momenteel plaats op het vlak van de burgerrechten, en net daar vergroot het door Van Rompuy geliefde Verdrag van Lissabon de macht van de Unie het meest. Het recente protest van de Liga voor de Mensenrechten tegen de databewaringsrichtlijn die aan internetproviders oplegt om allerlei data lange tijd te bewaren is maar één van de vele voorbeelden. Er zijn ook de pogingen van de EU om de grootste database ter wereld van vingerafdrukken te creëren, of het project INDECT, waarbij de EU dure technologie bestelt die moet dienen om internet en computers automatisch te kunnen bewaken, om zo "abnormaal gedrag" vast te stellen.
Het leidt geen twijfel dat iemand met de profileringsdrang als Tony Blair weinig zou bereiken als Europees president. Herman Van Rompuy daarentegen kent als geen ander de kunst om achter de schermen gaandeweg aan de weg te timmeren, wat ook de wijze is waarop de EU gaandeweg heel wat macht heeft verworven. Als hij het juiste kompas zou hebben en ook maar één van de bezorgdheden over de koers van de EU zou delen, zou hij misschien een goede president zijn, maar helaas ontbreekt het hem daaraan.
Saturday, January 09, 2010
Britse pers laat zich voeden door Pieter Cleppe
Pieter Cleppe in Terzake op Canvas, 18 november 2009
Is Lisbon in the interest of the Czech Republic?
Czech Daily MF Dnes, 20 October 2009
European Commission President José Manuel Barroso said that “it is not in the Czech Republic 's interest to keep postponing the completion of the ratification of the Lisbon treaty”. It’s not clear whether this remark by the top Commission official was meant as a threat or a claim, but it is worth looking into what the Lisbon Treaty would actually mean for the Czech Republic. The Lisbon Treaty means a critical transfer of power to the European Union. It will make it easier to pass laws in Brussels rather than in national parliaments like the Parliament of the Czech Republic.
Firstly, it abolishes over 60 national vetoes - a country's right to say no. The Czech Republic will give up its right to veto new EU laws on everything from what rights criminal suspects should have to aspects of foreign policy. If you don’t like what is proposed then that’s too bad, because the Czech government won’t able to say veto EU laws it dislikes. At the same time a new voting system also lowers the threshold for passing laws in the areas where majority votes are taken. The new version of the Qualified Majority Voting (QMV) system is complicated - but one of its main features is to sharply downgrade the influence of small member states.
According to a study by academics at the London School of Economics, the power of the Czech Republic to block laws it dislikes will be cut by a massive 51% under the Lisbon Treaty, compared with less than 2% for Germany. This means it will be much more difficult for the Czech Republic to steer new EU rules in the right direction. These changes to the voting system inevitably mean we will find that the EU will produce more laws than ever before. Open Europe has found that the annual cost to Europe of EU regulation has soared over the last five years by more than 50% from €108bn to over €161bn – and with Lisbon this is set to rise even higher.
Moreover, the study also found that 62 percent of the cost of regulations in the Czech Republic is already coming from the EU, where it is more difficult to exercise democratic control of laws than it is at the national level. Under Lisbon this will only get worse. If we are going to compete with America and China the last thing European business needs is to make it easier for unaccountable EU institutions to churn out even more red tape. But this isn’t just about business. If the Lisbon Treaty came into force, it would greatly expand the EU's control over important areas of public policy. For the first time the EU would begin to make important decisions over issues such as healthcare, transport and sport.
It would also give the EU huge new powers over extremely sensitive issues such as decisions on criminal justice. Under the Treaty the European Court of Justice would effectively become the Czech Republic's highest criminal court. Unelected EU judges would increasingly begin to determine Czech criminal law, for example, rather than the Czech courts and Czech voters. It has been said by EU leaders that this will be the last big EU Treaty for a long time. Indeed it is, but not because the appetite to constantly transfer power to the EU will disappear. It’s because the Lisbon Treaty introduces a system to make the Treaty self-amending, meaning EU leaders can change the treaties incrementally, without the need to go back to their electorates or national Parliaments.
It is a common myth that the Lisbon Treaty brings greater powers for national parliaments. In fact, the combination of the loss of policymaking powers to the EU level, the loss of the national veto brought by the increase in the use of majority voting, and new arrangements for amending the treaties means that national parliaments will have less influence on policymaking than ever before. As the German Constitutional Court recently pointed out: “The status of national parliaments is considerably curtailed by the reduction of decisions requiring unanimity and the supranationalisation of police and judicial cooperation in criminal matters.”
Under the Treaty the Charter of Fundamental Rights becomes legally-binding for the first time. It is likely to affect national law and give the European Court of Justice substantial new powers. The European Commission has confirmed that the Treaty of Lisbon introduces new rights. How the ECJ will use these powers is difficult to predict, so President Klaus is right to ask for stricter legal guarantees. And it would be no bad thing if this delays the Treaty for a few months. Having bullied the Irish people in voting a second time on the Treaty, when they had already rejected it, EU leaders are desperate to pass this Treaty and will stop at nothing to cajole the Czech President into signing it. We must resist this anti-democratic trend.
Polls show that a majority of people all around the EU wanted a say on any Treaty handing new powers to the EU, including 82% of Czech voters, but they were ignored. In the UK, the public is crying out for a vote, and the Conservative Party, which looks likely to win the next election in a few months’ time, has promised to give them a say if the Treaty is still not in force by then. Everything depends on what President Klaus decides to do next. It is only by resisting the entrenched forces prevalent in the EU institutions and in EU capitals that we can hope to stop this undemocratic Treaty once and for all and force Europe to change for the better.
Pieter Cleppe is the Head of the Brussels office of Open Europe
European Commission President José Manuel Barroso said that “it is not in the Czech Republic 's interest to keep postponing the completion of the ratification of the Lisbon treaty”. It’s not clear whether this remark by the top Commission official was meant as a threat or a claim, but it is worth looking into what the Lisbon Treaty would actually mean for the Czech Republic. The Lisbon Treaty means a critical transfer of power to the European Union. It will make it easier to pass laws in Brussels rather than in national parliaments like the Parliament of the Czech Republic.
Firstly, it abolishes over 60 national vetoes - a country's right to say no. The Czech Republic will give up its right to veto new EU laws on everything from what rights criminal suspects should have to aspects of foreign policy. If you don’t like what is proposed then that’s too bad, because the Czech government won’t able to say veto EU laws it dislikes. At the same time a new voting system also lowers the threshold for passing laws in the areas where majority votes are taken. The new version of the Qualified Majority Voting (QMV) system is complicated - but one of its main features is to sharply downgrade the influence of small member states.
According to a study by academics at the London School of Economics, the power of the Czech Republic to block laws it dislikes will be cut by a massive 51% under the Lisbon Treaty, compared with less than 2% for Germany. This means it will be much more difficult for the Czech Republic to steer new EU rules in the right direction. These changes to the voting system inevitably mean we will find that the EU will produce more laws than ever before. Open Europe has found that the annual cost to Europe of EU regulation has soared over the last five years by more than 50% from €108bn to over €161bn – and with Lisbon this is set to rise even higher.
Moreover, the study also found that 62 percent of the cost of regulations in the Czech Republic is already coming from the EU, where it is more difficult to exercise democratic control of laws than it is at the national level. Under Lisbon this will only get worse. If we are going to compete with America and China the last thing European business needs is to make it easier for unaccountable EU institutions to churn out even more red tape. But this isn’t just about business. If the Lisbon Treaty came into force, it would greatly expand the EU's control over important areas of public policy. For the first time the EU would begin to make important decisions over issues such as healthcare, transport and sport.
It would also give the EU huge new powers over extremely sensitive issues such as decisions on criminal justice. Under the Treaty the European Court of Justice would effectively become the Czech Republic's highest criminal court. Unelected EU judges would increasingly begin to determine Czech criminal law, for example, rather than the Czech courts and Czech voters. It has been said by EU leaders that this will be the last big EU Treaty for a long time. Indeed it is, but not because the appetite to constantly transfer power to the EU will disappear. It’s because the Lisbon Treaty introduces a system to make the Treaty self-amending, meaning EU leaders can change the treaties incrementally, without the need to go back to their electorates or national Parliaments.
It is a common myth that the Lisbon Treaty brings greater powers for national parliaments. In fact, the combination of the loss of policymaking powers to the EU level, the loss of the national veto brought by the increase in the use of majority voting, and new arrangements for amending the treaties means that national parliaments will have less influence on policymaking than ever before. As the German Constitutional Court recently pointed out: “The status of national parliaments is considerably curtailed by the reduction of decisions requiring unanimity and the supranationalisation of police and judicial cooperation in criminal matters.”
Under the Treaty the Charter of Fundamental Rights becomes legally-binding for the first time. It is likely to affect national law and give the European Court of Justice substantial new powers. The European Commission has confirmed that the Treaty of Lisbon introduces new rights. How the ECJ will use these powers is difficult to predict, so President Klaus is right to ask for stricter legal guarantees. And it would be no bad thing if this delays the Treaty for a few months. Having bullied the Irish people in voting a second time on the Treaty, when they had already rejected it, EU leaders are desperate to pass this Treaty and will stop at nothing to cajole the Czech President into signing it. We must resist this anti-democratic trend.
Polls show that a majority of people all around the EU wanted a say on any Treaty handing new powers to the EU, including 82% of Czech voters, but they were ignored. In the UK, the public is crying out for a vote, and the Conservative Party, which looks likely to win the next election in a few months’ time, has promised to give them a say if the Treaty is still not in force by then. Everything depends on what President Klaus decides to do next. It is only by resisting the entrenched forces prevalent in the EU institutions and in EU capitals that we can hope to stop this undemocratic Treaty once and for all and force Europe to change for the better.
Pieter Cleppe is the Head of the Brussels office of Open Europe
Betraying liberal democratic principles in the EU
EU Observer, 30 September 2009
On Friday, the citizens of Ireland will go to the polls to vote for the second time on the Lisbon Treaty, after apparently giving the 'wrong' answer the first time around.
After agreement was reached in June on the so-called guarantees that are supposed to assuage Irish fears about the Treaty, the EU Presidency confirmed that "the text of the guarantees explicitly states that the Lisbon Treaty is not changed thereby." The Irish people are therefore being served a re-heated Treaty – even more unappetising than it was before.
One can argue over whether transferring more power to the EU level is a good or a bad thing. Clearly many people across Europe are opposed to it, as shown by the French and Dutch people's rejection of the EU Constitution, whose content, in the words of the man who presided over its drafting, Valery Giscard d'Estaing, is "all to be found in the Treaty of Lisbon" .
But that is not the only issue at stake here. Asking people the same question until they give the desired answer raises an utterly more fundamental debate – about the rules of the game, about democracy itself.
It has been said many times before that politicians in Brussels and Strasbourg live in a bubble, safely out of the public eye and at a comfortable distance from the platform they were elected on back home. The leader of the German CSU party recently accused one of his own MEPs of having "lived too long on the Brussels gravy train".
This phenomenon is particularly apparent when it comes to the EU's so-called liberal parties, which in the European Parliament sit in the ALDE group (Alliance of Liberals and Democrats for Europe). All over Europe, these have always championed their firm belief in democracy and opponents will say that they have often been ahead of other parties when it comes to advocating initiatives such as citizens' petitions or referendums. The fact that they are often not the dominant political force probably plays a role in that.
However, it is striking how often these parties' attitudes to direct democracy don't make it on to the plane when their MEPs head to Brussels or when they are forced to confront EU issues.
Direct democracy
Take the German liberal party, the FDP, which has just enjoyed great success in national elections. Back in 2003, they were in favour of submitting the European Constitution to a popular vote. They even launched a legal proposal to change the German Constitution to make this possible. But they changed their position after the referendums in France and the Netherlands delivered the 'wrong' response.
Now they are only in favour of a 'Europe-wide' referendum – a poor substitute and so politically impossible it comes across as an empty gesture rather than a bold policy proposal.
Another prominent ALDE member is the Dutch "Democrats 66" (D66) Party, which has always called for "radical democratisation of the political system". The party, formed in the Sixties, considers the proposal to introduce referendums as one of the "crown jewels" of the party due to its entrenched belief in direct democracy.
At least this is what Dutch voters were led to believe. After the Dutch referendum, where 61.6 percent of the population rejected the European Constitution, D66 approved the Treaty of Lisbon in parliament in 2008, while at the same time admitting that Lisbon "only cosmetically" differs from the rejected Constitution .
Interestingly, D66 stresses in its manifesto that "parties should always promise beforehand that they will respect the outcome of a referendum." This seems to have slipped leading D66 MEP Sophie in 't Veld's mind when she voted on 20 February 2008 with the rest of the parliament in favour of ignoring Ireland's first referendum on the Lisbon Treaty, even before that referendum had taken place. Shockingly, no less than 88 percent of ALDE MEPs joined her, including Dianna Wallis, Fiona Hall and Andrew Duff, Liberal Democrat MEPs from the UK.
Liberal U-turn
In 2005 the Lib Dems joined all the other main parties in the UK and pledged to hold a referendum on the European Constitution. In 2008 however, leader Nick Clegg U-turned on his promise, blocking calls for a referendum on the treaty in parliament. Clegg instead proposed to have a poll on Britain's continued membership of the EU, using the same political trick as the German liberals: promise something politically distracting in the knowledge you will never be called on it.
The ALDE Group itself, while defending the idea of direct democracy and referendums, is at the same time the group that has been viciously fighting all attempts to respect the outcome of the referendums in France, the Netherlands and Ireland. Reacting on its website to the No votes in 2005, ALDE is proud that the group "played a substantial role in the careful analysis of the possible reasons for these negative results", setting out how "a period of reflection must re-launch the constitutional project".
Many liberals will be familiar with monetarist economist Friedrich von Hayek, who said: "Whoever betrays his principles, will go to hell". They'd better take his advice.
Pieter Cleppe is head of the Brussels Office of Open Europe, a think tank campaigning for EU reform.
On Friday, the citizens of Ireland will go to the polls to vote for the second time on the Lisbon Treaty, after apparently giving the 'wrong' answer the first time around.
After agreement was reached in June on the so-called guarantees that are supposed to assuage Irish fears about the Treaty, the EU Presidency confirmed that "the text of the guarantees explicitly states that the Lisbon Treaty is not changed thereby." The Irish people are therefore being served a re-heated Treaty – even more unappetising than it was before.
One can argue over whether transferring more power to the EU level is a good or a bad thing. Clearly many people across Europe are opposed to it, as shown by the French and Dutch people's rejection of the EU Constitution, whose content, in the words of the man who presided over its drafting, Valery Giscard d'Estaing, is "all to be found in the Treaty of Lisbon" .
But that is not the only issue at stake here. Asking people the same question until they give the desired answer raises an utterly more fundamental debate – about the rules of the game, about democracy itself.
It has been said many times before that politicians in Brussels and Strasbourg live in a bubble, safely out of the public eye and at a comfortable distance from the platform they were elected on back home. The leader of the German CSU party recently accused one of his own MEPs of having "lived too long on the Brussels gravy train".
This phenomenon is particularly apparent when it comes to the EU's so-called liberal parties, which in the European Parliament sit in the ALDE group (Alliance of Liberals and Democrats for Europe). All over Europe, these have always championed their firm belief in democracy and opponents will say that they have often been ahead of other parties when it comes to advocating initiatives such as citizens' petitions or referendums. The fact that they are often not the dominant political force probably plays a role in that.
However, it is striking how often these parties' attitudes to direct democracy don't make it on to the plane when their MEPs head to Brussels or when they are forced to confront EU issues.
Direct democracy
Take the German liberal party, the FDP, which has just enjoyed great success in national elections. Back in 2003, they were in favour of submitting the European Constitution to a popular vote. They even launched a legal proposal to change the German Constitution to make this possible. But they changed their position after the referendums in France and the Netherlands delivered the 'wrong' response.
Now they are only in favour of a 'Europe-wide' referendum – a poor substitute and so politically impossible it comes across as an empty gesture rather than a bold policy proposal.
Another prominent ALDE member is the Dutch "Democrats 66" (D66) Party, which has always called for "radical democratisation of the political system". The party, formed in the Sixties, considers the proposal to introduce referendums as one of the "crown jewels" of the party due to its entrenched belief in direct democracy.
At least this is what Dutch voters were led to believe. After the Dutch referendum, where 61.6 percent of the population rejected the European Constitution, D66 approved the Treaty of Lisbon in parliament in 2008, while at the same time admitting that Lisbon "only cosmetically" differs from the rejected Constitution .
Interestingly, D66 stresses in its manifesto that "parties should always promise beforehand that they will respect the outcome of a referendum." This seems to have slipped leading D66 MEP Sophie in 't Veld's mind when she voted on 20 February 2008 with the rest of the parliament in favour of ignoring Ireland's first referendum on the Lisbon Treaty, even before that referendum had taken place. Shockingly, no less than 88 percent of ALDE MEPs joined her, including Dianna Wallis, Fiona Hall and Andrew Duff, Liberal Democrat MEPs from the UK.
Liberal U-turn
In 2005 the Lib Dems joined all the other main parties in the UK and pledged to hold a referendum on the European Constitution. In 2008 however, leader Nick Clegg U-turned on his promise, blocking calls for a referendum on the treaty in parliament. Clegg instead proposed to have a poll on Britain's continued membership of the EU, using the same political trick as the German liberals: promise something politically distracting in the knowledge you will never be called on it.
The ALDE Group itself, while defending the idea of direct democracy and referendums, is at the same time the group that has been viciously fighting all attempts to respect the outcome of the referendums in France, the Netherlands and Ireland. Reacting on its website to the No votes in 2005, ALDE is proud that the group "played a substantial role in the careful analysis of the possible reasons for these negative results", setting out how "a period of reflection must re-launch the constitutional project".
Many liberals will be familiar with monetarist economist Friedrich von Hayek, who said: "Whoever betrays his principles, will go to hell". They'd better take his advice.
Pieter Cleppe is head of the Brussels Office of Open Europe, a think tank campaigning for EU reform.
An EU bail out for Ireland? No thanks, say the EU’s biggest contributors
Europe's World, 23 July 2009
As the economic recession limbers on, there have been suggestions from several corners that the bigger EU member states – led by Germany – might be willing to bail out the weaker ones – notably Ireland.
On 18 February 2009, German Finance Minister Peer Steinbrueck said: "If one euro zone gets into trouble, then collectively we will have to be helpful."
Soon after, following a speech to foreign journalists in Berlin, the Irish Times reported that Chancellor Angela Merkel “gave the strongest signal yet that Berlin may act under Article 100 of the EC Treaty, allowing financial assistance to be given to countries experiencing 'difficulties caused by natural disasters or exceptional occurrences beyond its control.”
European Commissioner for Economic Affairs Joaquin Almunia sparked controversy in March when supporting the idea of a eurobond as he said: "If a crisis emerges in one eurozone country, there is a solution before visiting the IMF. Don't forget we are equipped to interact politically and economically to face the crisis, but these kinds of things should not be explained publicly”.
Later, in June, Times columnist Anatole Kaletsky wrote that "Germany is at the heart of a huge plan to prop up crippled EU economies - not that the German people would ever know."
Not only that, but the German Finance Ministry is reported to have come up with several draft scenarios for rescue measures. One involves Germany issuing 'bilateral bonds' to raise money for struggling countries; another involves groups of several member states collectively floating a bond; a third involves using a clause in the EU treaties which allows it to provide aid if a member state is facing extraordinary circumstances - which would mean the EU taking out its own loans on capital markets for the first time; and a fourth involves an aid package provided by the IMF.
It is widely acknowledged that all these options would represent a huge burden on the German taxpayer. Der Spiegel magazine has estimated that, "for German taxpayers, this would be no small sum. If Germany were to pay into a bailout based on its size relative to other euro zone countries, it would be forced to cover one-fourth of the entire tab." Peter Bofinger, a member of the German Council of Economic Experts, estimated that a German bailout operation of other eurozone countries "could cost the taxpayer about 1.5 billion euro per year".
But what do German taxpayers think? According to a new Psyma poll commissioned by Open Europe and the Institute for Free Enterprise in Berlin, 70 percent of Germans, are, perhaps unsurprisingly, against the idea.
And they are not alone.
In a recent article in Europe’s World, Otmar Issing, former Chief Economist of the European Central Bank argued against the idea of a common eurozone bond, saying that it would imply that “France and Germany would have to pay higher interest rates, and that would in the end mean higher tax burdens for their citizens”, given the higher risk premia for buying bonds, troubled countries such as Ireland and Greece have to pay.
He said: “issuing a common bond would be a first step on the slippery road to ‘bail-outs’, and thus the end of the euro area as a zone of stability”, and indicated that a common bond would be harmful for a “weak” country as “it would foster the illusion that it is possible for a country to get out of difficulty without having undertaken fundamental reforms.”
Last year Issing told the Frankfurter Allgemeine Zeitung that it would be a “catastrophe” to water down the 'no bailout' clause in the EU treaties, arguing that “it would spell an end to the political stability of the monetary union". He said that in order for financial discipline to prevail every member state must be responsible for its own debt and deficits: "without this there would be no end", he said (FAZ, 20 February 2009).
Other prominent German economists agree. Current ECB Chief Economist Jürgen Stark has said "the ban preventing the EU and its member states from taking responsibility for the debts of partner countries is an important foundation needed for the currency union to function." Karl Otto Pöhl, former President of Germany's Bundesbank, said that if Germany decided to bail out other members of the eurozone it would open a Pandora's Box, adding "It would be like jumping in a swimming pool without water".
Many argue that a bail-out is not, in any case, legally possible, pointing to the well-known ‘no bail-out’ clause in Article 103 of the EU treaty. It reads:
“The Community shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project.”
Article 100, on the other hand, notes:
Article 100
1. Without prejudice to any other procedures provided for in this Treaty, the Council, acting by a qualified majority on a proposal from the Commission, may decide upon the measures appropriate to the economic situation, in particular if severe difficulties arise in the supply of certain products.
2. Where a Member State is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the Council, acting by a qualified majority on a proposal from the Commission, may grant, under certain conditions, Community financial assistance to the Member State concerned. The President of the Council shall inform the European Parliament of the decision taken.
Article 103 however prevails over article 100, following a of a declaration inserted at the occasion of the Treaty of Nice, whereby it was recalled that decisions regarding financial assistance, such the ones provided for in Article 100, are compatible with the "no bail-out" rule laid down in Article 103 (1).
Why then, are politicians trying to implicitly link the outcome of the upcoming second Irish referendum on the Lisbon Treaty to the possibility of Ireland securing financial help from other member states?
German MEP Jo Leinen, said the Irish must vote "Yes" if they wish to continue to benefit from the "protective umbrella" the EU provides. And the ‘Generation Yes’ campaign in Ireland claims among its top five reasons for voting ‘yes’ that it is “Our best chance for an economic recovery: Ireland can’t fight global economic forces on its own, in this financial storm the EU is Ireland’s safe harbour.”
These unsubstantiated claims deserve to be challenged. Even if politicians do find a legal way forward, nothing in the Lisbon Treaty changes the simple fact that any financial help flowing across EU borders depends entirely on the willingness of taxpayers – particularly German ones – to cough up, and the clear public opposition to the idea makes it politically unfeasible.
The clear ‘no’ from the Germans shows these attempts to build a common European union of debt by exploiting countries suffering in the crisis are a recipe for disappointment, at best.
(1) http://eur-lex.europa.eu/en/treaties/dat/12001C/htm/C_2001080EN.007001.html and http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+CRE+20090507+ANN-01+DOC+XML+V0//EN&query=QUESTION&detail=H-2009-0237&language=EN
Pieter Cleppe, Head of the Brussels Office of Open Europe
As the economic recession limbers on, there have been suggestions from several corners that the bigger EU member states – led by Germany – might be willing to bail out the weaker ones – notably Ireland.
On 18 February 2009, German Finance Minister Peer Steinbrueck said: "If one euro zone gets into trouble, then collectively we will have to be helpful."
Soon after, following a speech to foreign journalists in Berlin, the Irish Times reported that Chancellor Angela Merkel “gave the strongest signal yet that Berlin may act under Article 100 of the EC Treaty, allowing financial assistance to be given to countries experiencing 'difficulties caused by natural disasters or exceptional occurrences beyond its control.”
European Commissioner for Economic Affairs Joaquin Almunia sparked controversy in March when supporting the idea of a eurobond as he said: "If a crisis emerges in one eurozone country, there is a solution before visiting the IMF. Don't forget we are equipped to interact politically and economically to face the crisis, but these kinds of things should not be explained publicly”.
Later, in June, Times columnist Anatole Kaletsky wrote that "Germany is at the heart of a huge plan to prop up crippled EU economies - not that the German people would ever know."
Not only that, but the German Finance Ministry is reported to have come up with several draft scenarios for rescue measures. One involves Germany issuing 'bilateral bonds' to raise money for struggling countries; another involves groups of several member states collectively floating a bond; a third involves using a clause in the EU treaties which allows it to provide aid if a member state is facing extraordinary circumstances - which would mean the EU taking out its own loans on capital markets for the first time; and a fourth involves an aid package provided by the IMF.
It is widely acknowledged that all these options would represent a huge burden on the German taxpayer. Der Spiegel magazine has estimated that, "for German taxpayers, this would be no small sum. If Germany were to pay into a bailout based on its size relative to other euro zone countries, it would be forced to cover one-fourth of the entire tab." Peter Bofinger, a member of the German Council of Economic Experts, estimated that a German bailout operation of other eurozone countries "could cost the taxpayer about 1.5 billion euro per year".
But what do German taxpayers think? According to a new Psyma poll commissioned by Open Europe and the Institute for Free Enterprise in Berlin, 70 percent of Germans, are, perhaps unsurprisingly, against the idea.
And they are not alone.
In a recent article in Europe’s World, Otmar Issing, former Chief Economist of the European Central Bank argued against the idea of a common eurozone bond, saying that it would imply that “France and Germany would have to pay higher interest rates, and that would in the end mean higher tax burdens for their citizens”, given the higher risk premia for buying bonds, troubled countries such as Ireland and Greece have to pay.
He said: “issuing a common bond would be a first step on the slippery road to ‘bail-outs’, and thus the end of the euro area as a zone of stability”, and indicated that a common bond would be harmful for a “weak” country as “it would foster the illusion that it is possible for a country to get out of difficulty without having undertaken fundamental reforms.”
Last year Issing told the Frankfurter Allgemeine Zeitung that it would be a “catastrophe” to water down the 'no bailout' clause in the EU treaties, arguing that “it would spell an end to the political stability of the monetary union". He said that in order for financial discipline to prevail every member state must be responsible for its own debt and deficits: "without this there would be no end", he said (FAZ, 20 February 2009).
Other prominent German economists agree. Current ECB Chief Economist Jürgen Stark has said "the ban preventing the EU and its member states from taking responsibility for the debts of partner countries is an important foundation needed for the currency union to function." Karl Otto Pöhl, former President of Germany's Bundesbank, said that if Germany decided to bail out other members of the eurozone it would open a Pandora's Box, adding "It would be like jumping in a swimming pool without water".
Many argue that a bail-out is not, in any case, legally possible, pointing to the well-known ‘no bail-out’ clause in Article 103 of the EU treaty. It reads:
“The Community shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project.”
Article 100, on the other hand, notes:
Article 100
1. Without prejudice to any other procedures provided for in this Treaty, the Council, acting by a qualified majority on a proposal from the Commission, may decide upon the measures appropriate to the economic situation, in particular if severe difficulties arise in the supply of certain products.
2. Where a Member State is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the Council, acting by a qualified majority on a proposal from the Commission, may grant, under certain conditions, Community financial assistance to the Member State concerned. The President of the Council shall inform the European Parliament of the decision taken.
Article 103 however prevails over article 100, following a of a declaration inserted at the occasion of the Treaty of Nice, whereby it was recalled that decisions regarding financial assistance, such the ones provided for in Article 100, are compatible with the "no bail-out" rule laid down in Article 103 (1).
Why then, are politicians trying to implicitly link the outcome of the upcoming second Irish referendum on the Lisbon Treaty to the possibility of Ireland securing financial help from other member states?
German MEP Jo Leinen, said the Irish must vote "Yes" if they wish to continue to benefit from the "protective umbrella" the EU provides. And the ‘Generation Yes’ campaign in Ireland claims among its top five reasons for voting ‘yes’ that it is “Our best chance for an economic recovery: Ireland can’t fight global economic forces on its own, in this financial storm the EU is Ireland’s safe harbour.”
These unsubstantiated claims deserve to be challenged. Even if politicians do find a legal way forward, nothing in the Lisbon Treaty changes the simple fact that any financial help flowing across EU borders depends entirely on the willingness of taxpayers – particularly German ones – to cough up, and the clear public opposition to the idea makes it politically unfeasible.
The clear ‘no’ from the Germans shows these attempts to build a common European union of debt by exploiting countries suffering in the crisis are a recipe for disappointment, at best.
(1) http://eur-lex.europa.eu/en/treaties/dat/12001C/htm/C_2001080EN.007001.html and http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+CRE+20090507+ANN-01+DOC+XML+V0//EN&query=QUESTION&detail=H-2009-0237&language=EN
Pieter Cleppe, Head of the Brussels Office of Open Europe
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