Repeat: EU Summit Menu: Nitty Gritty Details And Water
–Originally transmitted Tuesday at 12:24 EST
By Peter Koh
BRUSSELS (MNI) – EU leaders meeting here Wednesday evening to
discuss over dinner ways to boost growth and ideas for fundamental
reforms of Europe’s currency union will be chewing a mix of nitty gritty
details washed down by cold water poured by Germany.
On the table is a three course “growth compact” served by the
European Commission consisting of an initial analysis of governments’
national reform policies, a scolding about initiatives already agreed
but not implemented, and warmed-up proposals to stimulate investment
mainly through funds already pledged.
The first course prepares the way for concrete policy
recommendations that Brussels will give to governments at the end of the
The second consists of important but slow-acting measures such as
energy efficiency, free trade negotiations and plans for a single
EU-wide patent regime that has been held up because of a dispute about
where the patent authority should be located.
The third course, which could prove the most substantial and
pleasing all-round, will be made of proposals to boost the capital base
of the European Investment Bank and to direct EU aid funds to where they
can have the biggest and quickest stimulus effect, along with a plan for
“project bonds” that would use EU money to entice private investors to
build key infrastructure projects.
EU officials are optimistic that national leaders will at least
agree to take further the measures served in the third course, possibly
taking them all the way to an agreement when they next meet at the end
of June. But German Chancellor Angela Merkel’s flask of cold water could
wash away some of the flavor, as she is likely to complain that no
concrete projects to finance have yet been identified, an EU diplomat
After dinner the leaders of the EU’s 27 member states have been
promised by their host, EU Council President Herman Van Rompuy, a lively
debate “without taboos” about fundamental changes to the Eurozone. But
first-time guest Francois Hollande, the newly-elected President of
France – brimming with enthusiasm for ideas also championed by his
predecessor such as plans for the Eurozone’s 17 members to jointly back
some debt issuance, tax financial transactions and remold the European
Central Bank to look like the dual-mandate US Federal Reserve – will
likely be disappointed by Merkel’s decision to shun the French wine in
favor of water.
Germany led Europe’s response to the crisis over the last two years
with a sober vision of fiscal responsibility and discipline but now has
no new ideas to offer and only skepticism about everyone else’s.
In Germany’s view Eurobonds are legally impossible unless the EU
re-writes its treaty; the ECB’s laser-like single focus on inflation
targeting is sacrosanct; and a good EU-wide tax on financial
transactions is impossible with veto-wielding English, Swedes and Dutch
at the table.
That’s not to say that there won’t be a lively debate about the
ideas, particularly for Eurobonds. Merkel has not ruled them out
altogether but just said they cannot happen until the Eurozone is more
deeply integrated, and the EU treaty is re-written. The European
Germany is working on ideas of its own, officials insist, and may
have some practical suggestions to make when a “reflection group” of
foreign ministers tasked with looking at the potential for
root-and-branch reform of the EU meets over the summer, they say.
–Brussels newsroom: +324-9522-8374; firstname.lastname@example.org
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