Tag Archives: Herman Van Rompuy

The Debate on Economic Governance Intensifies in the EU

The Van Rompuy task force on economic governance has produced its report that will be discussed during the European Council meeting on 28 October. According to Mr. Van Rompuy this will be the biggest reform of the Economic and Monetary Union since the euro was created.

The most important provision is about creating a mechanism for macro-economic surveillance. The mechanism will serve as an early warning system for detecting substantial macroeconomic imbalances, including strong divergences in competitiveness. The mechanism will operate for eurozone member states.

The second reform concerns the corrective arm of the Stability and Growth Pact. The debt criterion will carry much more weight when deciding on the excessive deficit procedure. According to Euractiv the task force has also endorsed plans for an interest-bearing fine on countries with high debts. The task force has also endorsed the European Semester for the coordination of budget planning.

The new proposals may need the revision of the Treaties. Le Figaro reports that France and Germany have agreed on such a revision in 2013 (hat tip: OpenEurope).

In summary, the report of the task force will generally repeat the proposals of the Commission on European economic governance. The big question, however, remains – will these proposals suffice to reverse current macroeconomic imbalances in the eurozone and the EU in general. Economists remain sceptical, and if we do not manage those imbalances, all other political measures will have only incremental value.

The Missing Link in the Eurozone Governance Debate

The President of the European Council Herman Van Rompuy proposed a “crisis cabinet”. He said that “there is not much hierarchy or organic links between the main players and the main institutions”. The idea is to include the European Comission President Jose Manuel Barroso, the head of the European Central Bank Jean-Claude Trichet and Mr Van Rompuy himself in this “crisis cabinet”.

At the same time the President of the European Commission called Germany’s plans on improving economic governance in the eurozone as “naïve”. He believes that any treaty reform is not feasible in the moment.

To me it is apparent that the debate is triangular – among the Commission, the ECB, and the European Council, leaving one player out. The European Parliament, that is.

In a way this is understandable. Any further integration of economic governance will encroach on state sovereignty. That is why it is essential to have sound support in the Member States for any further reform.

Then again, the weak conditionality of the Stability and Growth pact, as negotiated by the Member States, failed to perform. Any coordination mechanism short of Treaty reform will probably go the same way. We can see this in the conceptual disputes between Germany and France during the years and even today.

True, the EP did have a debate on economic governance coordination last week. But did it really influence the debate in the EU? Did it reach the European citizens? I am not so sure.

The dark scenario is political divergence rather then convergence. This may well be happening, given some unilateral steps made by Germany. But it should not surprise us – governments do calculate their own tactical interest, betting against the other participants in the currency union. In fact, history is full of such examples where currency unions dissolute due to political disagreement.

The European leaders seem to believe that they can “fix” the eurozone on an intergovernmental level with the support of the ECB, preferably without introducing Treaty reform. It would be great, but it is not possible.

That is why it would be much, much better if the European Parliament had a stronger voice in the debate. It is in the moment the only institution that can provide a forum for open deliberation of diverging political ideas for reform.

On a bitterer note – Member States may well circumvent the public discussion, but they will not fool the markets.

Van Rompuy is the First President of the European Council

Herman van Rompuy has been appointed as the first President of the European Council – a new post created with the Treaty of Lisbon. In his first public appearance, he has outlined some of his priorities on the post:

  • Continuity, especially for multiannual dossiers such as the financial perspectives and the Lisbon Strategy;
  • Economic and social agenda;
  • Environmental and energy challenges;
  • Greater security and justice for the European citizens.

Interestingly, Mr. van Rompuy believes that “every country should emerge victorious from negotiations”. He also thinks that institutional debate in the EU “is closed for a long period”.

The post of High Representative of the EU for Foreign Affairs and Security Policy goes to Catherine Ashton. Her appointment will have to be approved by the European Parliament. Pierre de Boissieu will be the Secretary-General of the Council.

The reactions to these appointments are diverse. One thing is clear – both Mr. van Rompuy and Mrs. Ashton do not have substantial foreign policy experience.

Quentin Peel says that the choice shows what a powerful role the European parliament has come to play in EU politics. He also says that the immediate reaction in Washington was one of shock and disappointment. This somewhat contradicts the news that the US welcomes EU appointments. Andreas Ross says this is an example of old-school EU compromise. Christopher Bickerton says in an interview to the LA Times that “the whole thing has descended into farce…it’s made the European Union seem more of a joke than a reality.”

Van Rompuy Still Not “Consensual”

FT reports that there’s still no consensus on the election of the first President of the European Council. The newspaper says that the Swedish presidency is positioning Herman Van Rompuy as the leading candidate, but the difficulty remains to find a suitable candidate for the post of High Representative on the Foreign and Security Policy.

 

 

Transparency vs. Conspiracy

Conspiracy theorists, rejoice: one of the leading candidates for President of the European Council, Belgian Prime Minister Herman van Rompuy, has reportedly given a speech to the arcane Bilderberg Group.

This purely unofficial appearance of Mr. Van Rompuy will also fuel criticism from Eastern European Member states that have persistently attacked the intransparent nomination process for new EU posts created under the Treaty of Lisbon.

 

Now You Can Choose the President of the European Council!

Fondation Robert Schuman is giving you a unique opportunity – to choose the first President of the European Council! Naturally, your vote won’t be counted during the summit next week, but then – who knows?

You can choose from Vaira Vike-Freiberga, Jean-Claude Juncker, Tony Blair, Herman Van Rompuy and Jan Peter Balkenende.