Saturday 15. August 2020
#159 - April 2013

 

An EU guided by an Ariadne thread

The recent European Summit focused on economic and social policy

 

In Greek mythology, Ariadne gave a ball of thread to Theseus to unwind as he negotiated the Cretan labyrinth in order to fight the Minotaur. Following the thread back thus allowed her beloved to escape. A method not unlike that being used by Herman Van Rompuy.

 

Since the start of the Euro crisis, European Council President Herman Van Rompuy has been unrolling his thread to guide the EU towards greater competitiveness of its industry in the world economy. Without this, there would be insufficient growth to fund the high level of social protection that characterises the European social market economy. Without growth, simply servicing the debt would stifle national budgets.

 

While hammering home this idée fixe shared, by the way, in the original text by the other members of the European Council and by the Presidents of the European Commission and the European Central Bank, this Flemish Christian Democrat has been organising the work of the Council since his first term of office. Nothing, however, is ever as easy as it seems. Unforeseen events can bar the way and the thread of Ariadne consequently seems to have disappeared into the hidden depths of the labyrinth. Thus, the European Council of 13–14 March was caught in the crossfire between its dispute with the European Parliament on EU financing for the period 2014-2020, and the agreement reached by the Eurozone finance ministers on Cyprus.

In a Resolution passed the day before the Summit, the European Parliament flatly refused to approve the draft Multiannual Financial Framework that the Heads of State and Government had set up in February. Without necessarily wanting to raise the overall amount of MFF, the MEPs mainly called for far greater flexibility that would make it much easier to divert unused funds from one category to another. They also wanted the insertion of a revision clause that would leave open the possibility for the next European Parliament to review the MFF. EP President Martin Schulz delivered a strong message to the European Council ... in the presence of the media.

 

Once the Heads of State and Government had returned home, the Eurozone finance ministers embarked on a marathon meeting to reach agreement on a bailout plan for Cyprus. The main result of the agreement was an aid grant of €10 billion together with the mobilisation of the Cypriots’ own resources as a result of demands made by countries such as Finland, Germany and Slovakia. This Cypriot contribution ignited a major crisis which was only resolved one week later by restructuring the island’s banking sector and taxing heavily savings above €100 000. The initial proposal to tax also small savings sparked a major protest among Cypriot citizens … and this had become the focus in the world press.

 

It therefore comes as no surprise that the conclusions of this recent Summit have had little coverage in the public sphere, even more so since this was an important – but not yet final – stage of the new procedure called the ‘European Semester’. On the basis of the annual growth forecasts published by the Commission at the end of November 2012, and the preliminary discussions in various committees of the Council of Ministers, the European Council of mid-March settled for adopting a series of rather more general guidelines for the Member States. Thus, it encouraged “pursuing differentiated, growth-friendly fiscal consolidation” and continued work on “structural reforms aimed at promoting sustainable growth”. The Heads of State and Government had also emphasised “the importance of shifting taxation away from labour”. Member States are required to report on their stability and convergence programmes by the end of April. These reports will then be reviewed by the Commission. The European Semester will come to an end with the June Summit, when the European Council will draw up recommendations that will be more specific, and therefore also more sensitive, for each of these countries.

 

In the light of this completed procedure, we cannot help noticing that in the future the EU’s Ariadne thread will be winding around many bends in the road. Following all the stages will require increasing expertise, and the curious observer might find a bit more reassurance if, at least at European level, words were systematically followed by actions. But, in areas such as taxation or the Single Market, the last European Council has had to admit to substantial delays in work progress. The European Union cannot allow the Ariadne thread to break while it adapts the whole of our continent – not just a few privileged regions – to the challenges of globalisation.

 

Stefan Lunte

COMECE

 

 

Translated from the original text in French

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