Saturday, January 28, 2012

More problems with that pact

According to Der Spiegel there is more dislike of the propose fiscal pact than anyone will openly admit to. But the high expectations awakened by Merkel are unlikely to be fulfilled. Several elements in the agreement are of questionable legality. It can't be written as an EU treaty because Great Britain won't sign it, which means it will only be an "inter-governmental agreement" between the 17 euro-zone countries and a handful of other countries participating voluntarily.
It's turning out to be a big handicap. On the one hand, the European Commission's hands are tied, because it can only act on behalf of all 27 EU members. Despite Merkel's wish, the Commission cannot legally take those that violate budgetary rules to the European Court of Justice. According to the fiscal pact proposal, national governments can only do this among themselves. But no country has ever taken legal action against another in EU history. Such a case would be seen as a gross violation of diplomatic etiquette.
Even if it comes to that, the authority of the European Court of Justice's (ECJ) remains in question. The treaty proposal states that the Luxembourg judges can impose fines of up to 0.1 percent of a country's GDP if they don't properly anchor the debt brake in their national law.
But these sanctions aren't actually provided for by EU law. In fact, they deviate from Article 126 of the Lisbon Treaty. And, according to Matthias Ruffert, a European law expert at the University of Jena, it is likely that all 27 EU members will have to ratify the fiscal pact for any ECJ sanctions to be binding.
Other lawyers argue that the sanctions would not be as binding as other ECJ verdicts. Because the fiscal pact terms involve only an intergovernmental agreement, they aren't EU law, which means they don't automatically come before national law, says European law expert Ronan McCrea, from University College London. Thus, in the case of an emergency, it would be easier for a national government to disregard such a verdict.
It comes to something when the pet project of the German Chancellor is dismissed by the Prime Minister of Luxembourg as being "a waste of time and energy". That is, apparently, what M. Jean Asselborne said.


  1. Cameron seems to think the decision has been left up to him.

    "David Cameron provoked Tory anger last night by watering down his opposition to a new EU deal to prop up the euro.
    As Brussels demanded yet more cash from the taxpayer to save the single currency, the Prime Minister agreed that the European Court of Justice could be used to enforce limits on state spending in the eurozone.
    Until now, Mr Cameron has insisted the institutions of the EU, part-funded by Britain, must not be used to enforce a treaty that he has refused to sign".

    Does anybody know what's going on? I'm certainly baffled!

  2. So is Mr Cameron, by the looks of it, Sue.