Wednesday, December 07, 2011

Which is the master race?

In an angst-ridden piece, the Spiegel is torturing itself about German dominance of the European Union. Despite its apparent strength, however, German is still only one voice in the community and it gains much of its influence through working within community structures. Even now, the voting spread amongst the small nations is sufficient for them, with a few allies, to gang up and pull the Federal Republic into line.

But when it comes to throwing their weight around in a thoroughly objectionable way, there seem few to compare with Herman Van Rompuy who, according to The Guardian, has produced a confidential paper (no longer) which suggests that the EU commission could be empowered to impose austerity measures on eurozone countries being bailed out.

It would, says the paper, usurp the functions of government in countries such as Greece, Ireland, or Portugal. Bailed-out countries, we are told, could also be stripped of their voting rights in the EU, under radical proposals that have been circulating at the highest level in Brussels before "this week's crucial EU summit" (i.e., European Council) on the sovereign debt crisis.

Van Rompuy is obviously pre-empting the formal approach from the Merkozy and his proposals seem to go way beyond that which Merkel has laid on the table – far more draconian. But despite that, there seem to be echoes of the suggestions made by Merkel on 2 December, and one suspects she has pulled back from them to avoid a constitutional referendum. More to the point perhaps, there are elements here of the commission's new action plan for growth, governance and stability, which it unveiled on 23 November.

But Rompuy he plans to get all this through the system is not specified. It seems, however, that some of the ideas are too rich even for the "colleagues", and have already been junked.

This has not prevented the emergence of another report which has Van Rompuy claiming that European Union treaties "can be amended without undergoing a politically risky national ratification procedure".

This appears to be via the same report to which The Guardian refers, suggesting that eurozone reforms could be introduced via an amendment of Protocol 12 of the EU's Lisbon Treaty, which would only need a "unanimous decision" of the EU's 27 leaders, following "consultation" with the European Parliament and the European Central Bank (ECB).

I cannot speak for other nations but this is not the case with the UK. At the very least the Ponsonby Rules would apply, as protocols are an integral part of a treaty. Changes still require ratification, and anything beyond minor changes would require full parliamentary ratification, involving an amendment to the ECA.

On the other hand, Klein Verzet is raising speculation via Bruno Waterfield and ZeroHedge that the EU could invoke the "passerelle" clause, but this seems extremely unlikely.

Firstly, as EU Referendum readers will recall, this procedure cannot be used to increase the Union's competences, which would seem to rule out its use, as that is precisely what is being proposed. Secondly, if applied, the changes still require unanimity by the Council and separate ratification by member states.

The effect of this power, therefore, was to remove the need for the IGC, allowing the European Council to approve minor treaty changes, but it is not a tool that would be appropriate here.

Something of a degree of rationality is beginning to creep into the debate elsewhere though. Although earlier reports were still shrieking about referendums, in line with my piece yesterday we are now seeing a report of Cameron threatening a veto if "British safeguards" are not met. Such was always the most appropriate option.

This is carried by The Daily Mail and The Guardian, the latter newspaper also having Kenneth Clarke dismissing the idea of repatriating powers. "No, we're not going to renegotiate any transfers of powers, in my opinion", Clarke has told the Financial Times.

This, then, is getting close to the real world, and Witterings from Witney gives a fair summary in what is a fraught and complex issue. Your Freedom and Ours adds to that complexity, which means we are all struggling to understand precisely what is going on.

Interestingly, noises off may be the determining factor as the pressures in the market build up.  Soon enough, even the political innocents in the financial world will realise they have been had. When that happens, on trusts that the Leader of the Known Universe, Herman Van Rompuy, will be looking for another job.

I wish.