Lisbon Treaty

Peter Spiegel

Greece’s recently-departed finance minister Yanis Varoufakis repeatedly argued that Greece could never leave the eurozone because there is nothing in the EU treaties that permits exit from the bloc’s common currency. But that hasn’t stopped EU lawyers from looking.

According to eurozone officials, EU legal scholars have been combing through the treaties to find provisions that would allow for Grexit – not because it is something they’re pushing for, but rather because they’re worried the country could be soon entering a legal limbo that could prevent it from getting the financial aid it desperately needs.

If Greece begins printing its own money – which could happen in a matter of weeks if the European Central Bank decides to cut off emergency loans to Greek financial institutions – it may no longer be eligible for aid from the eurozone’s €500bn rescue fund, since it is using a different currency.

But because Greece would still be legally part of the eurozone, it wouldn’t be eligible for the aid scheme reserved for non-EU countries, known as a “balance of payments assistance” programme. Hungary, Romania and pre-euro Latvia all received so-called “BPA” programmes during the crisis.

The traditional assumption is that because there is no explicit way to leave the eurozone, the only clause that comes into play is Article 50 of the Treaty on European Union, which allows for withdrawal from the entire EU. This would require Greece to request a departure, however, which is unlikely, and while there are an increasing number of leaders willing to let Greece leave the eurozone, none want it to leave the EU.

Officials say lawyers are instead looking at Article 7, which was adopted for a very different reason: In the wake of the Austrian government’s decision to include the far-right Freedom Party of nationalist Jörg Haider in a coalition, EU leaders wanted a way to punish countries that did not live up to European values. Read more

Peter Spiegel

Herman Van Rompuy, left, with President Barack Obama at last week's EU-US summit.

Fellow Brussels Blogger Josh Chaffin has a scoop in this morning’s paper on the five-page “interim report” on EU treaty changes for this week’s summit written by Herman Van Rompuy, the European Council president, which we were able to get our hands on yesterday.

Our story focuses on what is likely to be the central element debated about the report – the suddenly fashionable proposal to do a quick-and-dirty, limited treaty change through the hitherto obscure Protocol 12 of the EU treaties, which is described on page 3 of the Van Rompuy document, which Brussels Blog loyalists can read here.

But there’s much more to digest in the report, and as is our practice, we thought we’d give a more extended evaluation here on the Blog. Read more

Peter Spiegel

We now have a full copy of the conclusions reached by the European heads of government. Not many surprises in there, but I thought I’d post an annotated version below for those interested in EU arcana.

1. The European Council welcomed the report presented by its President following up on its conclusions of 28 and 29 October 2010. It agreed that the Treaty should be amended in order for a permanent mechanism to be established by the Member States of the euro are to safeguard the financial stability of the euro area as a whole (European Stability Mechanism). This mechanism will replace the European Financial Stability Facility (EFSF) and the European Financial Stabilisaton Mechanism (EFSM), which will remain in force until June 2013. As this mechanism is designed to safeguard the financial stability of the euro area as a whole, the European Council agrees that article 122(2) will not be used for such purposes.

The interesting thing here is the last sentence. This is the language David Cameron, the UK prime minister, was seeking to ensure non-euro countries do not get sucked into another bail-out when the new rescue system goes into effect in 2013. Read more

The clash over next year’s EU budget has widely been viewed as a contest between the austere and the profligate. The end result, after a final round of negotiations collapsed in the wee hours of the night, is that the forces of austerity, led by UK prime minister David Cameron and his Dutch and Danish allies, prevailed over a spendthrift European parliament.

But there is another – often overlooked – element to the debate that animated the member states’ unexpectedly stubborn stance: a desire to punish a Parliament that has grown increasingly assertive – some say grasping – since the Lisbon treaty came into force in December.

“There’s a feeling that they’re just going to keep pushing and pushing for more power. So it’s better to confront them now,” one diplomat explained. Read more

Any day now the advertisements should go out for the top jobs in Brussels’ new diplomatic service – the European External Action Service, as it will be boringly known.

If the optimists are right, the service will be anything but boring. It’s the most important single invention to come out of the Lisbon treaty, say the true believers. It will give the European Union the eyes and ears to forge a genuine foreign policy, and the voice to put it into effect.

On the other hand, eurosceptics are convinced it will just be a vast and expensive new bureaucracy, merely duplicating the role of national embassies. So the battle to keep its wings clipped may also be anything but boring.

The 27 member states sit somewhere in the middle – not quite sure they believe in what they are creating, wanting to keep it under control, and no doubt trying to do it all on a shoe-string. In the end, their attitude will determine if it’s a success or a failure. Read more

Tony Barber

With good reason the eurozone’s political leaders have been criticised for reacting too slowly to the Greek sovereign debt crisis.  But what’s new about that?  Slowness often seems to be a defining feature of Europe’s approach to policymaking.

Consider the proposals that are in the air for the creation of a European Monetary Fund to manage Greek-style crises in the future.  There is widespread support for such a fund, ranging from the European Commission to Wolfgang Schäuble, Germany’s centre-right finance minister, and socialists in the European Parliament. Read more

Eurozone leaders back Greek rescue deal

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. Read more

Greetings Brussels blog fans. As you may have guessed, Tony Barber is away this week, and so I will attempt to step into his shoes for a few days. Think of me as a younger, fresher version of our Brussels bureau chief. Which is to say, while Tony has lived and reported from every corner of Europe over the last 20-plus years – covering Balkan wars and Berlin walls – I am a New Yorker who first set foot in Brussels 18 months ago. Believe it or not, before I came to Brussels I barely knew my GAERC from my GYMNICH and I still get lost in the European Parliament building.

Angela Merkel arrives at the European Council

Angela Merkel arrives at the European Council

I don’t think it’s a stretch to say that today’s is the most gloomy European Council meeting I’ve ever been associated with. This was supposed to be the time when a post-Lisbon treaty Europe was confidently striding on the world stage. Instead, Europe is still suffering the hangover from December’s Copenhagen climate summit, when it was rudely elbowed aside by China and the US. (A Copenhagen post-mortem will be the main Council exercise on Friday morning. Fun.) Read more

Tony Barber

Whether it’s climate change, foreign policy or the increasingly alarming fiscal crisis, the European Union’s difficulties can be summed up in one word: disunity.  After December 1, when the EU’s Lisbon treaty came into force, disunity was supposed to be a thing of the past.  Instead, disunity has proved to be very much a thing of the present.  What’s more, the Lisbon treaty may – at least in the short term – be making matters worse.

Take the world conference on climate change at Copenhagen in December.  According to Connie Hedegaard, the EU’s incoming climate change commissioner, disunity – in the sense of a cacophony of European voices – was an important factor behind the ability of other powers to brush aside the EU’s views.  “Those last hours in Copenhagen, China, India, Japan, Russia and the US each spoke with one voice, while Europe spoke with many different voices.  Sometimes we spend so much time agreeing with one another that when finally the EU comes to the international negotiations, we are almost unable to negotiate,” she told her confirmation hearing at the European Parliament last month. Read more

Tony Barber

There is a need to clear up some misconceptions about how Greece, or some other fiscal miscreant in the 16-nation eurozone, would be rescued by its partners in the event that it was unable to refinance its debts.

Quite a few commentators seem to think eurozone governments would find it hard to sidestep the ban on bail-outs specified in European Union treaty law.  The European Central Bank, the European Commission and certain EU governments, not least that of Greece itself, have contributed to the confusion by insisting in public that a rescue is undesirable and unnecessary (while quietly planning for precisely this contingency). Read more

Tony Barber

How many days can a Spanish kite stay in the air?  About four, to judge from the speed with which Germany and the UK have shot down a proposal from José Luis Rodríguez Zapatero, Spain’s prime minister, to introduce binding mechanisms to enforce economic reform in the European Union.

The short lifespan of Zapatero’s brainwave, which he unveiled last Thursday in Madrid, is hardly surprising.  Not that it’s an especially bad idea – in principle.  Deep in their hearts, most European policymakers know the EU would benefit from closer fiscal and economic policy co-ordination, particularly in the eurozone.  They also know that the lesson from the EU’s ill-starred Lisbon agenda, which notoriously set out – and failed - to turn the bloc into the world’s most competitive economy by 2010, is that it was all too easy for governments to pay lip service to reform without doing much about it in practice (except for the virtuous Nordic countries). Read more

Tony Barber

What does 2010 hold in store for the European Union?  With people in Brussels only just drifting back to work after a couple of weeks of snow, sub-zero temperatures and seasonally adjusted flu, it seems too brutal to plunge straight into topics such as the “2020 Strategy“, the “Reflection Group“ and other elusively named EU initiatives of which we are certain to hear more as the year moves on.

What one can say is that the EU ended 2009 feeling rather more pleased with itself than perhaps it had expected 12 months previously.  Despite suffering the most severe economic contraction in its history, the EU avoided a meltdown of its financial sector, stuck fairly well to its rules on fair competition and free trade, and even witnessed a return to growth in certain countries. Read more

Tony Barber

Seen from continental Europe, one of the biggest questions of 2010 concerns David Cameron, leader of the UK’s opposition Conservative party.  The Tories are widely expected to win the forthcoming British election, but few European Union politicians can claim with confidence to know where he truly stands on the all-important matter of Britain’s relationship with the EU.

The lack of clarity isn’t helped by the Tories’ distant relationship with their fellow EU centre-right parties.  I am in Bonn at a congress of the European People’s Party, the leading centre-right party group.  Everyone who matters is here: Germany’s Angela Merkel, Italy’s Silvio Berlusconi, Herman Van Rompuy (the newly appointed full-time EU president)…  Countries from Malta to Latvia and Georgia to Croatia are represented.  But there are no Conservative party politicians at all here – not Cameron, not William Hague, his shadow foreign secretary, not Kenneth Clarke, the only authentically pro-EU voice in the shadow cabinet. Read more

Tony Barber

As of today the European Union is going about its business under a new set of rules known as the Lisbon treaty.  In Brussels this is universally seen as a good thing because, to quote Rebecca Harms and Daniel Cohn-Bendit, co-presidents of the European Parliament’s Greens faction, the treaty “sets the framework for increased European democracy, better decision-making, higher levels of transparency and closer participation of European citizens”.

Well, perhaps it does and perhaps it doesn’t.  One thing’s for sure: the new arrangements strengthen the European Parliament – hence the enthusiasm of Harms and Cohn-Bendit.  But the Lisbon treaty’s reforms are like the ingredients of a good dinner.  Use them intelligently, and all will be well.  Forget to put in the garlic and the peppers, and it will taste terrible.  In other words, wise leadership and a sense of responsibility to something higher than one’s domestic political audience are going to be necessary to make Lisbon work effectively. Read more

Tony Barber

The distance separating Britain’s perceptions of the European Union from those of its Continental partners is so vast that the English Channel might as well be the Pacific Ocean.  This was my first thought when I read not just David Cameron’s speech on what steps a future Conservative government would take to limit EU involvement in British affairs, but also the way the speech was reported and the reactions on each side of the Channel.

The Financial Times story, for instance, said Cameron’s speech set out “a very limited programme for European reform” – an interpretation which would raise howls of laughter across much of Europe, where the Conservative leader’s proposals are not viewed as “very limited” and are most definitely not seen as an effort at “reform”. Read more

Tony Barber

It’s striking that the Czech constitutional court announced its approval of the European Union’s Lisbon treaty on Tuesday morning just as the prospect of another Russian gas import crisis began to loom on the EU’s horizon.  For even though the news from Prague is welcome, a moment’s reflection is all you need to remind yourself that the Lisbon treaty will, in and of itself, do very little to help the EU address its most serious foreign and economic policy problems.

The sheer sense of relief at adopting a new EU treaty – it’s taken eight years, required two different texts, gone through three failed referendums and caused endless trouble in countries such as the Czech Republic, Ireland and the UK – risks fostering the delusion that everything will be better once Lisbon is in force.  But this is to fall into the trap of assuming that process can substitute for substance (see Monday’s blog on how the same fallacy affects the EU’s approach to relations with other big powers). Read more

Tony Barber

The fuss over who will be the European Union’s first full-time president is obscuring the less sexy but potentially more important question of who will get the two or three most powerful jobs in the next European Commission.  A good many governments would prefer to see one of their nationals in a truly influential economic policymaking role in the Commission than occupying the EU presidency, which may turn out to be a more hollow job than once foreseen.

Commission president José Manuel Barroso says he will not nominate his new team until EU leaders have chosen their new head of foreign policy, a post that entitles its holder to a Commission seat.  Any country wanting a big economic portfolio at the Commission will therefore steer clear of putting forward a candidacy for the foreign policy job, because there is only one Commission seat for each nation. Read more

Tony Barber

With a mere 27 members (all European heads of state or government, admittedly), the electorate that will pick the European Union’s first full-time president and new foreign policy high representative is even smaller than the conclave of Roman Catholic cardinals that chooses a new pope.  But this isn’t stopping other European busybodies from trying to muscle in on the decision.

Take the main political groups in the European Parliament, for example.  They have no formal say in the matter whatsoever.  Nonetheless, the parliament’s socialist group appears confident that it has an informal understanding with the centre-right European People’s Party that the full-time EU presidency should go to a EPP politician and the foreign policy post should go to a socialist. Read more

Tony Barber

There can be few presidential campaigns that have kicked off with the declaration “I am not a dwarf”.  But this is what Le Monde quotes Jean-Claude Juncker today as saying in the interview in which Luxembourg’s prime minister reveals he would consider being a candidate for the European Union’s presidency “if the call came”.

I have interviewed Juncker and seen him in action more than a few times over the years, and I can confirm that he is not a dwarf – though I have heard other disparaging terms applied to him that need not concern us here.  What most interests me is the enormous gulf in perceptions of Juncker’s potential candidacy between the UK and certain mainland European countries. Read more

Tony Barber

There is something fishy about the race to fill two of the biggest jobs going in Europe – the first long-term presidency of the European Union, and the post of EU foreign policy chief.  The closer the EU gets to decision time, the more various unofficial candidates are ruling themselves out or running into difficulties.  As far as concerns the presidency, the latest person to say she doesn’t want to be considered for the job is Mary Robinson, the former Irish head of state.

In some ways, it’s a shame.  The politically independent Robinson commands much respect across Europe and beyond – more than certain candidates I could mention from Belgium and Luxembourg.  It would also be a clever move on the part of the EU’s 27 leaders to put a woman in the presidency and so boost the EU’s profile in the eyes of its citizens. Read more