There is joy and harmony in euro world today. After looking over the precipice, European leaders decided to pull back and agree a rescue package for Greece. At a press breakfast this morning, José Manuel Barroso, European Commission president, was positively buoyant. Europe, he said, could have gone either way in the face of the latest crisis. In the end, it decided to leap forward towards greater integration and cooperation. In rock and roll terms, the whole thing had the feel of a band, whose bickering members — after threatening to embark on ill-conceived solo projects — finally calm down, come to their senses and determine to go on tour again.
-But don’t you guys hate each other? the media asks.
-No, no. We love each other. But this time we’re going to do things differently. There will be new rules about wives and girlfriends on the bus. Oh – and drugs. Vince has agreed to go cold turkey – at least during shows.
We’ll see how long that lasts.
Saving Greece is certainly cause for relief. But I can’t help but think that some of the happiness of European leaders this morning can be attributed to something that was left out of the agreement: an insistence on re-opening the Lisbon treaty. Germany had demanded this as a way to institute tougher sanctions against countries that run excessive budget deficits. The idea was to prevent any future crises. In the end, member states agreed that there were ways to tighten economic governance without necessarily re-opening the Pandora’s box of Lisbon.
That’s a good thing, because the prospect of doing so was almost universally dreaded. Fredrik Reinfeldt, the Swedish prime minister, recalled the day Lisbon was finally hashed out. “That morning, we said, ‘not in 10 years time will we re-open the treaty for changes.’ I want to remind my colleagues that that was a good idea. Why? Because it’s a lengthy process and very, very hard.” That qualifies as under-statement following the angst and misery of passing Lisbon. In a worst-case scenario, a re-opened treaty could be held hostage by a new Conservative UK government, which would certainly like to change more than just matters of economic governance.
Related reading:
Has Europe put the loaded gun on the table? Naked Capitalism
Greece, the IMF and the ECB (with CFA in supporting role) FT Money Supply blog
Across the globe: Gideon Rachman and his FT colleagues debate international affairs on