In a summit where no major short-term decisions are expected, several diplomats told EurActiv that the main question was what kind of endorsement would be possible for the document, called “Toward a genuine economic and monetary union”.
The document was prepared by Van Rompuy, together with European Commission President José Manuel Barroso in collaboration with Eurogroup President Jean-Claude Juncker and European Central Bank (ECB) President Mario Draghi (see background).
The paper outlines a process towards deeper EU integration and identifies the main building blocks – a banking union, a fiscal union and further steps towards a political union.
In the draft summit conclusions, there is space left for the endorsement formula. The four leaders could be tasked to continue work on this basis and present a roadmap at the December summit, and maybe an interim report in October.
The main discussion at the summit is expected to focus on the ‘Van Rompuy paper’, but also on the democratic legitimacy issue – jargon meaning that any major reforms need the endorsement at the national and EU levels, including EU treaty changes and amendments to national constitutions.
With the crisis biting across Europe and eurosceptic forces gaining strength, obtaining sufficient parliamentary majorities to back further EU integration appears to be a mission impossible for some political observers in Brussels.
If the Van Rompuy paper is given life, it would “change the face of European integration,” on ambassador said.
Indeed, the paper speaks of an EU “treasury office”, or an EU “central budget”, of “changing the budgetary envelopes” of individual countries if needed – implying the loss of national sovereignty.
Another diplomat referred to the same elements, complaining that they were “too vague” and that he was unable to report to his capital what the EU leaders had in mind.
All interlocutors blasted the authors for having revealed the paper only two days before the summit.
Another opinion is that many of the elements of the seven-page paper go too far and would be unacceptable for major countries such as France, which opposes surrendering sovereignty, and Germany, which opposes sharing debt.
“Would Germany accept the formula “to explore issuance of common debt in the medium term perspective? I don’t know,” a diplomat said.
Prague says no
Czech officials said they would oppose the Van Rompuy proposals.
“My mandate, approved by the government, stipulates not to accept those proposals that have been so far circulating in the media,” Prime Minister Petr Nečas was quoted as saying.
“We clearly stated that some parts, such as a banking union, could be very damaging to the Czech economy, where 95% of the banking market is operated by subsidiaries of foreign institutions.”
Diplomats, however, appeared to realise that they should avoid stoking further division – or indecision.
“There are huge expectations from the markets. The summit message should be that since Europe is capable of formulating proposals to shape its future, it’s not going to collapse tomorrow,” one diplomat said. “I don’t think we can invent anything else to impress the markets”.
Leaders are also expected to discuss the ratification of the European Stability Mechanism (ESM), due to be in force on 1 July. Of the 17 eurozone countries, Belgium, Finland, France, Luxembourg, the Netherlands, Slovakia and Slovenia have ratified the ESM. The fiscal compact treaty has so far been ratified by seven of the 25 signatory states. At least twelve countries need to have ratified it before it would enter into force.
Ratification of the ESM’s predecessor, the European Financial Stability Facility (EFSF), sparked the collapse of the government of Iveta Radičová in Slovakia in October.