September 26, 2011
Over the past 18 months, observers have noted the alarming frequency with which things that were once ruled out of hand by EU leaders have become the norm.
It began with the mantra-esque refrain of “We won’t bail out Greece”, which ultimately morphed into a commitment to back Athens to whatever extent becomes necessary. This was a particularly tricky red line to cross given the “no-bailout” clause in the EU Treaties, but crossed it eventually was.
Then it was agreed that no default of any hue would be countenanced until the middle of 2013. This fell by the wayside in July when a second bailout was devised for Greece.
The possibility of private sector pain was once out of the question, until it became the mainstream position at an emergency EU summit. This, it was stressed, was an exception made for Greece alone – it would never apply to Ireland, Portugal or anyone else. We shall see.
Expanding the European Financial Stability Facility (EFSF), issuing eurobonds, harmonising taxes, and creating an EU finance ministry: all these kites have been flown and shot down, but refuse to go away.
The role of Herman Van Rompuy, President of the European Council, was deliberately designed to be limited but even that may be reopened. It was never intended that he would have any control over the common currency. But that was then.
Now, France is pushing for Van Rompuy to be given new powers which would appropriate those currently resting with Luxembourg Prime Minister Jean-Claude Juncker who heads the Eurogroup. Paris has pitched the idea to Germany and seems to have won Merkel’s approval, which says much about who calls the shots in Europe these days.
That the EU would grow into a union of 27 nations effectively answering to an increasingly powerful Germany was also once on the list of impossible eventualities.
Gary Finnegan writes the EU View column in Business & Finance magazine, a Dublin-based publicationAuthor : Gary Finnegan