So much for the “six pack,” the sprawling fiscal reform package that was supposed to rein in government debt and prevent a recurrence of the crisis currently threatening the euro.
Hungary placed the six pack atop the priority list for its six month European Union presidency, and worked doggedly to try to forge a compromise with the European parliament before its term ended last week.
The Hungarians were not the only ones keen to close a deal: Herman Van Rompuy, the European council president, spent months in tortured negotiations leading a task force that developed the rules, which would allow Brussels to fine governments that do not put their fiscal houses in order. Angela Merkel, the German chancellor, has promised the Bundestag she will not participate in a new eurozone bailout fund, set to go into effect in mid-2013, without the new budget controls in place first.
But as Poland takes the EU’s presidential reins, it appears intent on dialling back the urgency. Polish diplomats will resume negotiations with MEPs in Strasbourg this week. But people involved in the talks say it is now impossible that a deal could be finalised before September – if one gets done at all.
“It’s not quite as centre-stage as it was,” Jacek Rostowski told reporters in Warsaw on Sunday.
Just a few weeks ago, the Hungarians warned that such a delay would send a disastrous signal to financial markets as they urged MEPs to give ground on the chief sticking point: a demand that sanctions against governments that violate fiscal rules be made nearly automatic, with little wiggle room for politicians to avoid them. Several national diplomats seconded the warning.
Whether it was sincere, or a negotiating tactic, Rostowski suggested that reasoning no longer applied. Because of the Greek parliament’s recent vote for an austerity package – as well as the EU’s agreement to release a crucial €12bn aid payment – markets were no longer so sensitive to signs that member states were unable to work together to confront the crisis, he argued.
More broadly, the finance minister seemed to suggest that the six pack’s importance may have become exaggerated. There are limits to regulation, Rostowski observed, “therefore, we cannot expect that even with the six pack, we will be entirely crisis-proof.”
Bagging a deal would, no doubt, be a big accomplishment for the Poles. But with Rostowski re-setting expectations, the failure to get one may not sting as much as it did for the Hungarians.
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