EUROPEAN COUNCIL president Herman Van Rompuy glossed over opposition to Franco-German demands for an EU competitiveness pact by saying euro countries “feel a stronger need” for economic co-ordination measures beyond those they have already agreed.
The initiative, jointly promoted by German chancellor Angela Merkel and French president Nicolas Sarkozy, met resistance from some of their closest allies at an EU summit four days ago as countries within and outside the euro zone took issue with elements of their plan.
In the European Parliament yesterday, however, Mr Van Rompuy spoke of a “political commitment” to develop concrete proposals around policy areas, the economic tools to be deployed and the limits to be set.
The competitiveness pact plan originates with Dr Merkel, who wants higher pension ages, constitutional debt brakes, a decoupling of wages from inflation and a common corporate tax base.
Ireland is opposed to the corporate tax element of the plan and other aspects are being strongly resisted by Belgium, Austria, Spain, Portugal, Poland and Luxembourg. Non-euro countries such as Britain and Poland have expressed reservations about the plan.
Italian foreign minister Franco Frattini added his voice to the dissenters when he said yesterday that Europe was not ready to harmonise taxes. “There are issues in the pact that Europe is not ripe to solve yet, this includes, for example, harmonisation of taxes and tax systems,” Mr Frattini told reporters in Prague.
Before a committee of senior MEPs in Brussels, Mr Van Rompuy insisted no formal proposal was put to the summit and said he was convinced that EU leaders would find “yet more agreement on the way forward” in March.
He and European Commission chief Jose Manuel Barroso have been asked to present a concrete proposal to EU leaders following consultations with heads of state and government.
There will be a special euro zone summit in the middle of the month to discuss these issues before the scheduled spring summit of all EU leaders towards the end of the month. Following heated scenes in the course of a six-hour lunch debate on Friday, some critics of Dr Merkel and Mr Sarkozy believe it is overly ambitious to seek agreement in that timeframe.
MEPs criticised Mr Van Rompuy’s positive tone, one of them saying it smacked of Soviet-era propaganda. “We’re getting feedback as if everything had gone swimmingly, that wonderful results had been achieved,” said German Green Rebecca Harms.
“It’s a bit like the Politburo when things didn’t go well. In future, we should be getting hold of more honest reports which do pinpoint the problems,” she said.
Liberal group leader Guy Verhofstadt said the summit was a “disaster”, arguing many prime ministers arrived at the gathering without sight of Germany’s basic position paper. He said linking proposals of this nature to the reform of the euro zone bailout fund, the European Financial Stability Facility (EFSF), was very risky.
“The outcome of the European Council is that there is a secret deal saying that there shall only be an agreement to reinforce the EFSF if there is also an agreement on the Franco-German pact, the one is linked to the other. I am saying that is very dangerous. That is playing with matches while sitting on a haystack.”
Opponents said the proposals were difficult to accept. “I don’t think it’s possible for the European Union to regulate the pension age because there are large differences in the individual countries,” said Austrian chancellor Werner Faymann. “I don’t think it’s right to interfere in wage negotiations, like some have demanded.”
