Monday 16. December 2019
#147 - March 2012

 

Solidarity and Responsibility

 

Twenty years after Maastricht, the twin treaties on the European Stability Mechanism and on Stability, Coordination and Governance in the Economic and Monetary Union, negotiated under pressure of the debt crisis, represent important steps towards the necessary consolidation of the European Union. The price, at least for the time being, is a Union of ‘variable geometry’.

 

The new Treaty on Stability, Coordination and Governance in the Economic and Monetary Union was ceremonially signed on 1 March. The text of the Treaty was decided during the EU summit on 30 January and will enter into force at the earliest on 1 January 2013, assuming it has been ratified by the twelve Eurozone states by that date. With this Treaty (with which neither the UK nor, ultimately, the Czech Republic are associated), the signatory states intend to establish a fiscal compact providing rules that require a balanced budget to be incorporated into national law, at constitutional level where possible. ‘Balanced budget’ means that the overall state deficit may not exceed 0.5% (or 1% during a recession) of Gross Domestic Product.  In the event of a breach of this rule, as recognised by the European Commission, the other treaty partners have the right to lodge complaints with the European Court of Justice, which may in the end also impose financial sanctions on a country which is infringing budgetary discipline requirements.

 

Making a commitment to discuss far-reaching national reform projects in advance among treaty partners should help achieve the objective of better coordination of national economic policies. ‘Euro summits’ will in future be held at least twice a year; and at least once a year signatory states that have not yet adopted the Euro will also be invited to these summits. The incoming Euro summit President will submit a report on each of these meetings to the European Parliament. A conference, to be established with members of the national and European parliaments, will discuss the budgetary policies of the EU and the Member States. After five years at most, the substance of the new Treaty will be incorporated into the existing treaties and working procedures of the European Union.  We set out below a few comments on the content and on further dealings with the new Treaty.

 

The following points should be noted when evaluating the situation: the intention is, together with the previously negotiated Treaty Establishing the European Stability Mechanism (coming into force on 1 July 2012), to set up the two pillars of responsibility and solidarity for economic and monetary union for the members of the Eurozone and for the other participating states.  The largely legally enforceable commitment to take responsibility for themselves and the whole Eurozone by observing the balanced budget rule corresponds to the Solidarity Pledge of reciprocal financial support via the European Stability Mechanism, which is a type of European monetary fund.  These Treaties have therefore created the conditions for the formation of a ‘Community of Solidarity and Responsibility’, in favour of which the COMECE Bishops pronounced support in their statement of the same name published last October. Meanwhile, it is important that the perspective of this community should remain open to all EU Member States and that none should find themselves locked out. Exactly twenty years after the conclusion of the Maastricht Treaty, a serious attempt has been undertaken, influenced by a severe public debt crisis, to remedy its weaknesses.

 

We need to ask whether this will be enough. It has certainly not yet solved the core European issue of generating the momentum for an ageing continent for a growth which saves resources as much as possible. This would require, inter alia, the consistent expansion of the Common Market towards a European social market economy. However, there is evidence that the pressure of the international financial markets during the debt crisis has accomplished what many well-meaning experts and wise politicians have been drawing our attention to for two decades:  in a crisis situation, all members of a monetary union must be able to rely on the solidarity of the others and every member must clearly prove its readiness to assume responsibility for itself and also for the whole membership.

 

Stefan Lunte

 

Translated from the Original German

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