At the end of a grueling overnight summit, this was the verdict: given the impossibility of involving all 27 member countries in the agreement (which concerns in particular the state-saving fund and fiscal union), in particular the strongly opposed Great Britain, Europe is going ahead at 26: The 17 eurozone countries plus nine other volunteers (Bulgaria, Latvia, Lithuania, Poland, Romania, Hungary, Denmark, Sweden and the Czech Republic). Only the British are left out.
The differences of views between Cameron, on the one hand, and France and Germany, on the other, are therefore insurmountable. AND Sarkozy launches the accusation “”If a two-speed Europe is born today, it is Great Britain's fault. We have not found an agreement on the modification of the treaties to 27 due to the unacceptable conditions posed by the British premier David Cameron". The President of the French Republic refers to a protocol that would have exempted the United Kingdom from the application of the rules on financial services.
The British premier thus replied: “We don't want to join the euro, we are happy to be outside it, just as we are happy not to be part of the Schengen zone. We do not want to give up our sovereignty as these countries are doing. We want our interest rates, our monetary policy: what we were being offered was not good for Britain, so they better make a treaty between themselves”.
THE DECISIONS. Here are the point-by-point decisions:
- TAX UNION: The 17 countries of the euro area plus the other members of the Union willing to join in have decided that they will have to submit (for now only 7, but Sweden and the Czech Republic have to ask the Parliaments, while Great Britain says no) to a regime of automatic sanctions for those who violate the agreements unless three quarters of the countries vote against. The new rules on budgets will have to be written into national constitutions, and it will be up to the European Court of Justice to supervise this. The so-called "structural deficit" is limited to 0,5% of GDP. Stricter rules, with the European court of justice called to verify their compliance. Automatic sanctions for those countries that exceed the 3% deficit/GDP limit, unless a qualified majority votes against.
- EUROPEAN STABILITY MECHANISM: The bailout fund will be managed directly by the ECB and will no longer be called EFSF but starting from its entry into force, scheduled for July 2012, it will be replaced by the ESM (European Stability Mechanism), to which other important changes to the bylaws.
In particular, as requested by Berlin, the elimination of the provisions on the participation of banks and private investment funds (the so-called PSI – 'Private sector involvement') to the costs of any future rescue interventions of the Eurozone countries; And the adoption of voting procedures borrowed from the decision-making mechanisms of the IMF, which in some cases provide for an 85% majority of the financing shares assigned to the various member countries, while the new treaty establishing the ESM will enter into force when it has been ratified by a number of member states representing the 90% of the shares.
- INTERNATIONAL MONETARY FUND: European leaders pledged to explore the possibility that their respective central banks could engage in bilateral loans to the International Monetary Fund of €150 billion to which another 50 billion could be added from non-eurozone European countries, in order to strengthen the Fund's firepower save-States for any interventions aimed at tackling the EU sovereign debt crisis.
- PRIVATE PROTECTIONS: Private sector involvement excluded in the future. Leaders acknowledged that the previous policy during the crisis in Greece, of forcing private investors to accept losses on their Greek debt holdings, has failed and will not be repeated.
REACTIONS. Merkel satisfied: “We will create a fiscal union – said the German chancellor – which is a union of stability, which will guarantee a debt brake for all the euro countries and the others who want to participate. A good result, with which the euro will recover its credibility”.
Partially satisfied too Italian Prime Minister Mario Monti, who, however, together with Sarkozy has relaunched his proposal (which will be discussed, according to Van Rompuy, only in June) on Eurobonds. The professor would have preferred a solution of 27, but he still receives a new promotion from the leaders for his 'homework': "We have welcomed the measures taken by Italy in the maneuver, which represent a great effort,” said Van Rompuy. “Italy has done its part – Monti said – by making its contribution to overcoming a crisis in the Eurozone which was certainly not only Italy's responsibility. The decisions of Thursday and Friday in Europe are far-reaching: there will be a public finance framework and the firepower possessed by the institutions will be increased to prevent the spread of the contagion of the crisis in Europe”.
Comment like this Mario Draghi, particularly satisfied: "The results of the EU summit are very good for the Eurozone: they will be the basis for greater discipline in the economic policies of the member countries".
Meanwhile, from Washington emerges all the concern of US President Barack Obama on the summit that continues today: ”Obviously I am very worried about what is happening in Europe. Courageous choices are needed because the future is at stake not only of Europe but of the world economy”.
Also the former Belgian premier and group leader of the Liberals in the European Parliament Guy Verhofstadt he commented the summit with journalists: “EU leaders have taken some positive steps towards strengthening discipline – explains Verhofstadt -. I believe this though is not enough to face today's crisis".
The former Belgian premier is then argumentative with British Prime Minister David Cameron: "I regret your decision to prevent a deal for twenty-seven."
On the other hand, the press release from the director of the International Monetary Fund was positive, Christine Lagarde, who welcomed the agreements on the strengthening of budgetary discipline and anti-crisis systems just signed between European leaders. “They are an important contribution to solving the debt crisis in the euro area and strengthening the global economy. Europe has shown leadership with the agreement we have just reached and now I hope that others will do their part as well".
