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EUROPEAN LEADERS have failed to agree on common plans for an amendment to the European Union’s founding treaty – raising the possibility of the emergence of a formal two-tier European Union.
All-night talks in Brussels ended without unanimity, with the United Kingdom and Hungary both using their veto to block plans for treaty change – agreeing only to a new “fiscal compact” reinforcing previous rules on the limits for budget deficits.
British prime minister David Cameron refused to yield to a full treaty because he could not secure exemptions from certain rules for the City of London – fearing that the UK’s main financial district could be hit by tough new regulation rules.
“At the end of the day I made my judgement that it was not in Britain’s interests,” he said. “I effectively wielded the veto.”
French president Nicolas Sarkozy said Britain’s demands were “unacceptable” but was consoled by the fact that all 17 euro members – including Ireland – agreed to sign up to the deals.
Without unanimity, the 17 euro members – plus another six, with two more potentially to follow – will now sign up to what the eurozone leaders called an “international agreement”, seemingly outside of the main umbrella of the European Union.
Bulgaria, Denmark, Latvia, Lithuania, Poland and Romania will also voluntarily sign up to the new code, with Sweden and the Czech Republic also set to join if their parliaments agree to do so.
The deal reached between those 23 countries, formally described as a “fiscal compact”, will see member states adopting legally binding “automatic correction mechanisms” to automatically reduce any Budget deficits beyond a certain threshold.
The European Commission has been tasked with finalising the deal, with the European Court of Justice then responsible for making sure it is adhered to by member states.
The deals will be introduced on a “constitutional or equivalent level” – an important clause that will likely allow Ireland to sign up to the deal without the need for a procedural referendum.
Taoiseach Enda Kenny had previously indicated – and yesterday affirmed – that he would be introducing similar “debt brake” legislation in Ireland in the New Year.
Other measures agreed by the 23 countries include a formal deal allowing a “qualified majority” of euro members to waive the economic sanctions for countries who breach the 3%-of-GDP limit for budget deficits.
They also agreed to minor amendments to the conditions that bailed-out countries must observe – and a vague clause where members will work “towards a common economic policy”, with “major economic policy reforms” to be discussed and coordinated at euro level.
In separate agreements, euro member states agreed to fast-track the introduction of the new permanent bailout fund, the European Stability Mechanism – which is now to be introduced in July 2012 instead of 2013.
Eurozone and other countries will also consider providing an extra €200 billion in loans to be given to the IMF – which, in turn, can use those loans to lend to struggling European countries.
European Council president Herman van Rompuy said after the meeting that the current approach to involving the private sector in bailout programmes – effectively, burning any bondholders – was “now officially over”, with members signing up to the IMF’s own guidelines on doing so.
Britain has denied that staying outside of the new regime will mean a two-tier European Union, with foreign secretary William Hague citing the euro itself and the Schengen agreement as previous examples of EU agreements not involving all member states.
The summit will resume in Brussels this morning – where Croatia will formally sign an accession deal to join the EU in July 2013.
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They’re fecking right too. If only Kenny went to Brussels with the same intentions of protecting Irish interests like jobs, health, SOVEREIGNTY.
Is SOVEREIGNITY the new NEUTRALITY?
No, it’s a basic fundamental of any republic.
Yeah, but is it really that important? Does it really matter at the end of the day? If we can get this island back on its feet with people back working and the country functioning effectively an efficiently like never before, will sovereignty really matter? If countries stop thinking about me me me, then they might start thinking about the people – if they are constantly competing against one another there will be sacrifices for all…
Luke.
I’d say it is the basic of any democracy.
People like Barrosso, Van Rompuy, have absolutely no electoral mandate yet demand more control. They have put in 2 unelected stooges in Rome and Athens. One the man who cooked Greece’s books prior to joining.
By the people, of the people and for the people. A revolutionary slogan to the EU.
Si, we won’t get this country back working if we don’t have the sovereignty to ensure it is more competitive, as a nation within which to do business, than other EU member states! We are a peripheral nation and need to maintain a competitive advantage over the EU powerhouses and that won’t be the case if we can’t determine our own economic policy.
The purpose of the new EU Treaty is to give Germany and France more say over our fiscal policy. At the end of the day, the Eurozone is ruled by the elite few. We can’t sit around and be their bit*ch*s all the time. Too many people died in the name of our sovereignty for us to go and sign it off willingly to Merkzoy.
Thanks si mon !
I could give two fecks about our complete economic sovereignty if it helps people’s lives.
Cultural sovereignty is a different kettle of fish. But the EU member states are generally more left wing than us so I like it generally.
Also ‘looking out for their interests’ is used to mean protectionism which is just political racism when you cut the bullsh*t.
Cultural sovereignty? The people leaving this country everyday on flights for good to England, Australia and US couldn’t care less about cultural sovereignty… They care about jobs!
It’s amazing to hear someone remark that they are happy to cede more power to Europe on the grounds that Europeans are generally more left-wing which is not a brand of politics the Irish people have overwhelmingly embraced at the polling stations!
As for ‘political racism’ ! WTF? I’d call looking after ones nations own citizens a form of political realism! Is Merkel looking out for us? Get real.
List all the good things we’ve done with this ‘sovereignty’? I don’t know whether to be amused or frightened that people value this fairytale ‘sovereignty’ over the well-being of our people. Mainly frightened I think.
@Luke Mac an Bháird. If there is a new treaty France and Germany will have the same voting power as they do now. So can we stop with all the ‘EU stealing our babies’ talk.
@Gary.
If the new treaty will actually give both Germany and France more control over our fiscal policy. If you want to be subjected to their customs then I suggest you buy a one way ticket to either country and live there.
If this is just budget controls I have no problem in making us play within our means with a reasonable bit of leeway.
But does it not concern you that only yesterday the ECB offered a facility for debt ridden banks to borrow unlimited cash over the next three years?
Know nothing about bank economics but it would yes.
However nothing to do with stopping us spending stupid.
If the powerful countries need cheap money, we’ll get it too with fiscal union. Can you not see what’s stupid about that? It’s the idea of the eurozone that’s stupid, not us!
Good old enda, probably just voted as instructed by angela
Isn’t that what a good subservient does? Jump when told to and according how high!
Yeah and all those that clicked the green thumb there will probably vote for him again – we are as much sheep as he is in the EU!
Gotta laugh, I know treaty changes are a mixed bag in terms of popularity. But Cameron blocking them to save the City and the bankers who caused all this crisis in the first place, like RBS and Morgan Stanley!
And as a result now, are we to suffer?
Cameron is protecting British interests better than our government is protecting ours!
How dare he look after the jobs and interests of his own countrymen. The bastard!
Well, no I understand wanting to look after British interests, of course. But I’m pretty sure when being elected he wanted to punish the banks and the ones responsible for the collapse, now he protects them, and the very organizations which caused it, with what looks like no room for negotiation? We can hardly look to burn the bond holders ourselves if Cameron refuses to enact measures to restrict much more dangerous banks… Just my opinion, I do agree though that he should defend British interests, but he’s gotta play ball too, we wouldn’t be in this mess to a large extent if not for British banks!
Ciaran. You’re dead right. He wasn’t looking after his country’s interests , only those of “the City”!
Réada, you are very naive if you fail to realise that the interests of the British people and ‘the city’ are not intertwined. It’s easy to stereotype those working in London’s financial district as fat cat bankers etc but the revenue generated, jobs created, ancillary industries developed and tax intake accumulated by ‘the city’ is staggering!
It’ll probably end up employing countless numbers of young Irish professionals in the coming years…
And BJ I don’t believe half of your stories either. No problem tho. Takes all sorts! :)
And the EU lived happily ever after…
Not
More jokes and BS from the circus that is the EU.
Germany alone has approx. 450bn in bad debts in its banks. It’s banking system is the worst in Europe.
Treaty change will not resolve that debt.
but hey, isn’t it better to talk about integration than deal with the problems at hand.
This restraint mechanism, is not worth the paper that it is written on. When the French or the Belgians, or even the Germans break it, conditions will be fudged.
Are they going to tell Italy or Spain, or Portugal, all drowning in debt.”Oh you have broken the rules”, here is a massive fine, just add it to your debt. Coup de grâce is a good term for this.
Cameron is doing exactly what Merkel and Sarkozy are doing, looking after his own countries needs, protecting them. Unfortunately for about a 1/3 of the EU, none of this resolves the crisis of debt and how the Euro is totally unsuited to the economic needs of those countries.
The mind truly boggles that there are people out there who still believe in the myth the EU is about solidarity and mutual benefit.
So Tim will the Euro survive ? My guess is it will rumble on a little while longer. But the amount of debt countries have and banks hold is just not feasible in the long run. Wait till France has to start austerity budgets !
Ann
I can’t see it surviving in its current form. Italy, Spain, Greece, Portugal and to a degree ourselves, France and Belgium are in a currency that is totally contrary to our needs and benefit.
We might balance the books, they all might by some miracle but the stagnation or very low growth will continue for a 1/3 of the continent. That is the killer long term.
The killer in the immediate future is that there is several hundred in debt to be rolled over in Italy alone. The EU are looking at a 500bn Euro pisspot fund for the entire zone. Yields to borrow are rising across all European states. So everyone is deeper in the hole.
One of France’s major banks was going to collapse last week, that is why all the central banks stepped in, in unison.
Even if this charade would work it will take years for it to have any effect.
There is going to be one incredible recession in Europe next year as confidence has evaporated. Expect more summits, do not expect action.
Time for the Euro to be cut back to 7 or 8 countries, the rest leave and the ECB, the Fed, the IMF put a programme in place to mange the leaving. There is no alternative to this. It is a less bad choice for the world economy.
Tim. I just think the bottom line is there is too much debt to bail out anymore. With massive recession in Europe next year there is even less chance of Europe getting out of the hole it is in. Three words spring to mind Power Greed Corruption.
What a load of crap! Sovereign nations are restricted in their financial affairs, but private banks can borrow “unlimited amounts of cash” courtesy of the ECB.
Just knew Kenny would sell us out!What have the Irish people done to deserve politicians like we have.Whatever about Cameron at least he seems intent on protecting his people and country but then they seem to have a democratic country,not so sure about ours at this stage.
Our “democratic” country decided to vote for kenny – blame the people who gave him mandate. We hate change here and to move to the left would have been too much for the people on this island to take! Maybe one day we will wake up eh??? (I’m not hopeful)
Oh please, Cameron is terrified of the back bench rebellion within his own party and nothing more. How did you come to the conclusion that Kenny is selling us out? He stated quite clearly that he believes treaty change would take too long & he wants a better deal for Ireland on it’s loans.
I definitely didnt vote for him!
He is still feathering his own nest, when we are all suffering more as time goes on..dont forget how easy he will sleep knowing what a lovely cushion of pension he will have to look forward to.
How can anyone keep defending someone who dishes out medicine and takes nothing himself?
BREAKING NEWS:
Enda Kenny spotted in Grafton st wearing a sparkly pair of read baubles from his belt.
Joe Doyle, shop worker said ” Mr Kenny was asking for some balls like David Cameron, these were the closest we could find for him. He seemed very pleased when he hung them on his belt!”
RED!!
Stable door, horse bolted. What we need are proactive politicians not reactive.
All these talks are just putting off the inevitable, the Euro is done, the banking system is done. What they’re trying to agree now is how to get the people of Europe to pay for the banking mess. More tightly integrated Europe or not, they can’t stop what’s coming.
The delusion train rolls on. The IMF are not coming the Ireland etc. The irony is even if they come to a perfect agreement, they have no money and the markets will eventually realise it. The politicians cant agree on the colour of paint let alone anything worth while. It is likely that credit rating agencies will shortly downgrade Europe. While it is harsh, I honestly cant blame them.
In a way maybe its the best thing if they do downgrade Europe and get this farce that is masquarading as a European Union gone along with its bloated bureaucratic system and grossly overpaid MEPs etc. Its obscene. Democracy ? They have forgotten the meaning of the word.
We should all vote for a two-tier europe, and then we can all move to one of the top tier countries.
wo ist das Sozialamt bitte
Brace yourselves for the inevitable – …….”Once again, Britain finds itself standing alone in the face of tyrannical winds sweeping across the continent” …………….headlines in the British press.
hehe and I think you’ll be right. Do people in the UK not wonder why Britain often stands alone, maybe they think it’s the British stiff upper lip but I’m more inclined to think it’s too many vested interests.
In this case, i’m not going to complain too much, because Britain has effectively done our dirty work for us by exercising it’s veto….:-)
You all seem to be missing that Ireland has just agreed to increase its Corporation tax in line with what Sarkozi has been wanting for ages and Kenny has been saying will never happen, well it has!
Tax harmonisation has not been mentioned anywhere thus far. I’m as angry about what has gone on as anyone else, and dont want to see more sovereignty ceeded but a debt brake is no bad thing!
This whole budget deficit agreement is a bit of a misnomer. Sure Ire budget deficit didnt show up til 2007, 2008. Damage done.
I know people say ‘the enemy of my enemy is my friend’ but let’s get real here. Cameron is protecting the city of London, not the people of the UK or anyone else. He’s kowtowing to this own Euro-sceptic conservative party members. Perhaps people should consider where the conservative party gets the largest percentage of it’s funding… the city of London. Hate the EU all you want but it does not mean Cameron is doing you a favour. The city of London helped create a lot of the current worldwide mess and a financial transaction tax would be good for everyone, other than the bankers and profiteers.
BTW they are still talking about tax base not not tax rate. Elmar Brok an MEP and close associate of Merkel was on Primetime last night saying categorically that the Germans are not looking to change our corporate tax rate. He was getting pee’d off at Shane Ross for saying otherwise. Sarkosy can flap his big mouth all he likes but it’s not going to happen.
Exactly Gary. Another point is that relative to the size of the country, we have a huge financial services industry here, and if Cameron had got a derogation from a financial transaction tax, it would mean we were subject to it, bur the UK was not. Therefore, where do you think the finance companies based here would have gone?
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