A Twin Track approach, or we missing another track, and where are we headed to anyway? Thoughts for the impending EU Summit Friday 9th December.
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The President of the European Council (that is the summit of the 27 heads of government and state that will meet this Friday ) has suffered a leak…or perhaps deliberately leaked a curious document which sits a little at odds with the Sarkozy/Merkel line that we need major Treaty change……he seems to suggest something I’ve pointed out is maybe both possible and sensible….a very limited Treaty tweak using the Lisbon Treaty’s speedy revision procedure ….
You can find the text of his leaked ‘non paper’ here: http://blogs.ft.com/brusselsblog/files/2011/12/INTERIM-REPORT-FINAL-6-12-.pdf
Keep in mind it may be a willful negotiating deception of a rather classic kind-the exclusive leak, which is of course deliberate. The end result of what emerges on Friday evening could be quite different.
But what does Van Rompay actually say?
Well its the usual stuff about greater fiscal discipline, etc., and a key observation is that he draws the content from a Commission proposal of late November….which is full of Christmas Cheer…..(this proposal can be found here: http://ec.europa.eu/commission_2010-2014/president/news/documents/pdf/regulation_1_en.pdf).
One thing I note is that the text of this legislative proposal (if adopted) could have implications for our domestic budgetary provisions under our Irish constitution, in particular the submission of draft budgetary plans to the Commission potentially before the Oireachtas had seen it! Article 21.1 of the 1937 Constitution states that only the Dáil can initiate a money bill and paragraph 2 says it must be sent to the Senate….by demanding that draft budgets be basically pre-vetted before legislative initiative are these constitutional provisions not being circumvented, by giving the European Commission a de facto veto over Money bills before the Dáil and Senate have debated them?
One respected website described the Commission proposal as: “Brussels pushes for radical shift in budget powers away from parliaments”, available at: http://euobserver.com/19/114372
I am not comfortable with the substance of such proposals.
But the main point is a finicky legal one: some of what needs to be done could be achieved by a reform of Protocol 12, which he argues: “Changes to Protocol N°12 can be introduced by a unanimous decision of the Council on a proposal from the Commission after consultation of the European Parliament and the European Central Bank. This decision does not require ratification at national level. This procedure could therefore lead to rapid and significant changes.” (pt.12).
NOTE, this would not involve invoking the procedure for a speedy reform as set out in Article 48, which is qualified by the need for such a revision to be approved by national parliaments, any one of which can stop the revision. There is also a stipulation that Article 48 cannot be used to give the EU new competences.
However, he then goes on: “Another avenue to be pursued either in parallel or subsequently would be to undertake a revision of the TFUE articles related to Economic and Monetary Union, through the revision procedure set out in Article 48 of the Treaty on European Union. Such a revision could consist in a modification or replacement of Article 136 and/or a revision of Protocol N°14 on the Eurogroup.”
The point he makes is that while using the Article 48 route takes longer and is somewhat risker politically, it would allow a more thorough change of the rules that govern the Euro.
Crucially, one needs to understand they are likely to do both-we are now looking at a twin-track treaty change. the first track is a quick and dirty reform of Protocol 12 and the second will be a fast tracked reform of the other bits of Articles 122-126 to toughen up the Euro rules under the procedure of Article 48.
What puzzles me at this stage is how he thinks he can do this without granting a new competence to the EU, for example he suggests in the leaked ‘non paper’:
“an enhanced role for the EU institutions, with a higher intrusiveness in the case of lack of implementation. For euro area Member States in an excessive deficit procedure, there could be a the possibility for the Commission and the Council (Eurogroup) to request changes in a draft budget before it is submitted to the national parliament if the budgetary stance is not in line with the agreed plans. In the case of euro area Member States that are under an assistance programme and persistently fail to meet the conditionality, the Commission could receive exceptional powers, such as ex-ante approval of all major economic reforms”
That all seems to be giving the Commission rather obviously new powers..(and) does that not mean new competences under the terms of Article 48?…….and if so to what extent can Article 48 then be actually relied upon? Much may turn of a very limited and technical definition of what a ‘new competence’ is. Doubtless the Commission legal staffers are polishing a paper on that now.
Other ideas in the non-paper include the use of the oldish ‘enhanced co-operation’ possibility to allow the 17 Eurozone members, which is not really news because Merkel and Sarko signaled they may need to go ahead with a new set of rules for just the Eurozone 17 and the British would be happy with that as long as some safeguards are met.
Intriguingly, he raises the possibility of Eurobonds in coded language: “Opening up the possibility, in a longer term perspective, of moving towards common debt issuance in a staged and criteria-based process, for example starting with the pooling of some funding instruments.” This matches the point I made yesterday that as a fake major concession the Germans will probably get ready on Saturday night to ‘concede some type of common European debt instrument’…… presenting it as a major shift…when in fact one can see it just sensible.
There is also a rather banal statement that the soon to emerge European Stability Mechanism (ESM) rules will come under heavy pressure to be re-written so that unanimity is edited out...”bringing the ESM decision making procedures more in line with mechanisms in place in the IMF (unanimity being restricted to a limited number of decisions)”.……..this is despite the fact that the ESM Treaty (2011) was only agreed a few months ago….and they are already changing it…..Moreover, as I posted yesterday some of the rules taken by unanimity within the ESM are really important.
What is missing here is all that stuff about Golden Rules…but remember what Merkel is looking for there is a national government political promise to change national constitutions to write in a balanced budget rule……so the question of framing that in EU law may not arise at all….
But if there is a desire to push for further demanding changes…or if the limits of Article 48 are breeched…then the only way to change the Treaties is through some kind of laborious series of inter-governmental conferences…which could last years. It may well be that they also feel the need to sign off on that as well…and let it slow burn…..so we could be looking at a triple track Treaty reform eventually……
And what does all this mean for Ireland?
Quite a lot.
If Treaty reform can be kept to a twin-track use of Article 48 together with a reform of the obscure protocol 12, then we may well avoid the need for a referendum…although that would be controversial and may be litigated. However, when the ESM Treaty was negotiated and agreed it was enabled by a simple reform of Article 136 which was pushed through using Article 48(6)…..and the legal advice was that this was consistent with the Crotty judgement and therefore we did not require another referendum….
What remains unclear is the extent to which all of what they want to do can be really done under Article 48…or whether in fact they will have to countenance a more substantial and slower change of the Lisbon Treaty….if so, then we are for sure in a referendum zone…….in any event I think sooner rather than later Ireland will find it hard to avoid another divisive EU mandated referendum………..