The EU’s New Budget Motto: “Mother May I?”

December 7th, 2011 at 4:00 pm | 2 Comments |

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European Council President Herman Van Rompuy has just floated a proposal to subject all EU members – not just eurozone members – to more rigorous budget scrutiny by Union organs. The proposal is so contrary to the Union treaties and its scope so overreaching to the current eurozone debt crisis that it is doomed to fail.

Van Rompuy is clever enough to know this, meaning that its purpose is likely to distract serious analysis of the Merkel-Sarkozy proposal.

Van Rompuy’s proposal is based on an imaginary view of what the treaties allow on excessive deficits. Article 126 of the Lisbon Treaty indeed sets forth commitments by all member states not to run excessive deficits, and Protocol 12 allows the details of that process to be amended by unanimous vote of all members. However, it does not allow for the rewriting of Article 126, only its implementation, and the protocol itself, in its Article 3, provides:

[T]he governments of the Member States shall be responsible under this procedure for the deficits of general government…The Member States shall ensure that national procedures in the budgetary area enable them to meet their obligations in this area…”

So any plan, like this one, that moves the responsibility for enforcing deficits away from the member states is a treaty change requiring the normal processes including member state action apart from just heads of state. Neither Van Rompuy’s plan nor anything else in Protocol 12 changes that. Nevertheless, one Irish commentator stated that “Altering the protocol doesn’t change the procedure set out in article 126. It merely changes the manner in which it is implemented.”

To the extent Van Rompuy is serious, expect several repetitions of this, though their number will not make them more true. Van Rompuy’s plan sets up the European Court of Justice to “supervise the implementation of this rule into national law.” So much for member state responsibility. Even LibDem MEP Andrew Duff himself correctly noted that “”I very much doubt that an extension of the functions of the Court of Justice can be made by such a light constitutional procedure without risking the possibility of a legal challenge.”

Tellingly, Van Rompuy’s only other named alternative is the Franco-German approach of treaty change, though there are other alternatives, including assuming the euro is already an enhanced cooperation exercise among the eurozone only and legislating pursuant to those rules.

Whether this plan is simply legally incompetent, intended to feign independence from the Franco-German proposal (details of which are still forthcoming), pretending that there are indeed a multiplicity of viable proposals, or required to consume part of the very short time member states have to choose a course of action by tomorrow, Van Rompuy’s proposal should be seen for what is, a dead letter. Its false expediency is overwhelmed by its cynicism.

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2 Comments so far ↓

  • ottovbvs

    “Van Rompuy’s proposal should be seen for what is, a dead letter. ”

    Probably, but then who thought six months ago we were going to see a massive increase in fiscal convergence in the Eurozone. Never say never.

  • Graychin

    Question today from the Washington Examiner for Mitt Romney:

    “The European Union might be on the verge of an economic meltdown and the U.S. is already getting involved at least indirectly. They opened the Fed window. The IMF, which we heavily fund, is sending money their way. Do you support this Fed and these IMF measures and, if this were still going on when you were inaugurated, what steps — what US aid — would you be willing to provide to Europe?

    Romney’s response:

    “Not much, because Europe is capable of solving Europe’s problems. I actually think that — I mean, I’m not an economist by training, but what limited understanding of the economy I have suggests it’s very difficult to cobble together Greece, Ireland, Italy and Germany with the same monetary policy and highly disparate fiscal policies. I don’t know how they hold it together.”

    We’re going to be in great hands in 2013. Right, Mr. Frum?