21 October 2013

Merkel demands EU Treaty change to give Commission control over national budgets

Partially translated from the German

The Spiegel reports that in a meeting with EU Council President Herman Van Rompuy last week, German Chancellor Angela Merkel set out her proposals for giving the EU greater powers over eurozone members’ national budgets, a move which would require EU Treaty change.

Merkel will reportedly insist on legally enforceable contracts between the Commission and individual Member States, setting out their obligations for maintaining budgetary discipline and improved competitiveness. In return, Germany could agree to a eurozone budget which would amount to tens of billions. Finally, the President of the Eurogroup would become a "Euro Finance Minister".

Merkel is aiming for sharp control and veto rights for Brussels and the transfer of far-reaching control over the budgets of the 28 Member States. Thus, the euro would be permanently stablised. This route would involve far-reaching changes to existing EU treaties. According to the Spiegel, the previously unbinding "protocol 14" of the EU Treaty should be enriched with clear powers for the European Commission to conclude contract-like agreements for competitiveness and fiscal discipline with each euro country.

Merkel has already tested how her plans would be received by her partners. The response was more than subdued. "This will not be possible with us", signalled the SPD, with whom the CDU/CSU are about to enter into coalition negotiations. Spiegel Online cites Axel Schäfer, deputy-chair of the SPD’s parliamentary group as saying that "the SPD will not support any settlements if Merkel conducts parallel negotiations with Britain’s David Cameron over the transfer of EU competences back to Member States". Schäfer also warns that the SPD will not support an EU Treaty changes that trigger referenda in individual Member States. 

Even Martin Schulz, Socialist president of the European Parliament, has already warned the Chancellor internally that a treaty change would be very difficult with him as EP President. The European Parliament has a clear cross-party consensus: national governments should stabilise the eurozone with the instruments that have been created over the past three years - without treaty change.

The Welt reported that the SPD claimed the post of a European Commissioner for themselves - probably in exchange for their approval to Merkel's plans. The CDU's Günther Oettinger will thus be replaced by the SPD's Martin Schulz "who sees himself as a promising candidate for the succession of President José Manuel Barroso".

It is hard to imagine that Britain and France will agree to such far-reaching encroachment on their national sovereignty, the DWN reports, as the distribution of European taxpayers' money by Brussels would ultimately lead to the dissolution of budget sovereignty of individual states.

The Irish Times warns that other Member States are worried at the prospect of opening the treaty at a time of popular unrest towards Brussels and its institutions, with populist and eurosceptic parties on the rise. In recent months though, Berlin has insisted treaty change would be unavoidable to provide a sound legal footing for EU measures to wind up failing banks, part of the so-called Banking Union. Berlin’s plan is still medium- rather than short-term. Ms Merkel wants to wait until after next year’s European election to progress the measures.

Responding to German Chancellor Angela Merkel’s demand for an EU Treaty change to give the European Commission control over eurozone national budgets, President of the EU Commission, José Manuel Barroso, yesterday said in Berlin that: “We need a strong [European] institution in the centre”, while urging a “step by step” approach. Separately, Horst Seehofer, head of Merkel’s CSU sister party, said that the CSU does not want the “nation state to lose financial sovereignty” and that the competences of the Commission should not be increased “as long as we comply with the debt ceiling and the stability criteria”.

Further reporting © Open Europe