Never before has an EU-De-Briefing of EM Germany taken place in such temporal proximity to the actual summits: Only nine hours after the informal European Council had closed its session in Brussels, more than 100 representatives from public administration and interest groups were briefed on the events by the Federal Foreign Office and the Federal Ministry of Economics and Technology. Consolidation and growth were the hot topics on the agenda of the 28 delegations – in addition to the 27 member states, Croatia was invited to a European Council for the first time.
The Heads of State or Government discussed the subject of economic growth for much longer than expected. The European Council decided on impulses for employment, especially for young people, the completion of the internal market – through coordinating tax systems, reducing administrative burdens, improving intellectual property rights, and strengthening rights of the services sector – as well as the allocation of greater financial funds for the economy, especially for SMEs. In contrast to other programmes that are under the aegis of member states, one can expect better results thanks to mechanisms of peer pressure, government representatives assured.
The basic content of the fiscal compact was already decided upon during the ECOFIN Council last week. Some crucial details like the number of signatories necessary for the entry into force of the treaty, however, were left for debate amongst the political leadership. In the end, 25 of 27 EU member states signed the compact, with the United Kingdom and – somewhat surprisingly – the Czech Republic abstaining. When the treaty enters into force in January 2013, the signing parties are given a year to establish the so-called ‘debt brake’ in their national law and hence to keep their structural budgetary deficit below 0.5 per cent of the GDP. If the European Commission were to initiate the deficit procedure, the Council could only veto this decision with a qualified majority – until now, this qualified majority was necessary to open the procedure. Furthermore, the signatories will be entitled to bring dilatory states before the European Court of Justice. The exact details of these legal procedures shall be determined over the upcoming weeks. The Federal Government expressed satisfaction with the results. According to the rapporteurs, a crucial fact is that the debt brake – albeit no longer having a constitutional character – will be ranked above the national budgetary procedures. The integration of the fiscal compact into EU law is expected to take place within five years the latest – if the necessary political conditions were in place.
The Council also managed to reach agreement on the European Stability Mechanism (ESM), which is likely to be signed during the next COREPER meeting in order to be ratified by 1 July. According to the Federal Government, due to several ‘linkages’ between the ESM and the fiscal compact it will be ensured that only countries that ratified the compact will be entitled to call for funds from the ESM. The following discussion touched upon the situation of countries that will not be able to ratify the treaty in time, but are in need of financial support through the ESM.
On behalf of the Federal Government, Claudia Dörr, Head of Section in the European Division of the Federal Ministry of Economics and Technology, and Dr. Arndt Freiherr Freytag von Loringhoven, Representative of the European Division of the Federal Foreign Office, informed the audience.
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