Daily Archives: November 25, 2013

Van Rompuy at last month's EU summit. Will December's summit agree to the contracts?

When is a eurozone bailout not a eurozone bailout?

It’s a question that sherpas to the EU’s presidents and prime ministers will be grappling with on Tuesday when they are scheduled to debate a new proposal from Herman Van Rompuy, the European Council president, intended to further centralise economic decision-making in Brussels.

Under the 9-page plan (first uncovered by our friends and rivals at Reuters; we’ve posted the copy we got our hands on here), a country that is struggling economically could agree to a “contractual agreement” with Brussels that legally codifies its economic reform programme.

In return, that country could avail itself of a low-cost loan that would only be disbursed in tranches to insure compliance with the “contractual arrangement”. Oh, and one other thing: the European Commission would monitor the country to make sure its complying with the “contractual arrangement”.

Legally-binding economic reform agreement. Low-cost eurozone loans. European Commission monitoring missions. Sounds a bit like a bailout, no? Well, because it would be available to all eurozone countries, Van Rompuy doesn’t call it a bailout. In eurocrat-ese, it’s a “solidarity mechanism”. And if sherpas give it the signoff Tuesday, it will be debated by EU leaders at their December summit