EU countries still divided over voting rights issue

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A Franco-German proposal to sanction eurozone budget sinners by stripping them of their EU voting rights faces massive opposition from other countries in the bloc, it emerged after a two-day summit in Brussels on Friday (29 October).

EU Council President Herman Van Rompuy avoided giving a direct answer when asked by EURACTIV after the summit to comment on the divisive voting rights issue, which has been vigorously pushed by German Chancellor Angela Merkel (see 'Background').

But European Commission President José Manuel Barroso, who was standing beside him, set the record straight, stating that the mandate given to Van Rompuy excluded "any kind of suspension of voting rights in this revision of the Treaty".

Luxembourg Prime Minister Jean-Claude Juncker, meanwhile, said opposition to the Franco-German proposal had been "fierce […] very fierce" during the two-day meeting.

"This idea, which was Franco-German, to strip voting rights from countries which consistently breach the [Stability and Growth] Pact has not been endorsed by the European Council," Juncker said, in response to a question from EURACTIV.

He explained that Van Rompuy had been tasked with investigating whether budget sinners should be stripped of their voting rights on issues restricted to the European Monetary Union (EMU), meaning that their prerogatives in other areas would remain unaffected.

"Now Mr. Van Rompuy will ponder the limited issue of removing the right to vote on EMU-related issues," Juncker said, speaking in French.

The long-serving prime minister of Luxembourg, known for his outstanding expertise in EU monetary and financial affairs, expressed hope that the voting rights penalty would never be adopted.

France, Germany refuse to admit defeat

Speaking to the press in another meeting room, French President Nicolas Sarkozy presented a different interpretation of the voting rights issue.

"Herman Van Rompuy will examine this question, which is of particular importance […] even if thorough preparatory work is needed," he said.

At a press conference in an adjacent room, Merkel said the voting rights were "still on the agenda". "The subject of voting rights, which we are not taking off the agenda, remain on the agenda," she said.

The chancellor added, however, that those changes would come as part of future treaty change.  

Avoiding referendum threat

Juncker explained that the treaty would be changed in a "slight" way, which would not require ratification in some member countries. As the summit conclusions specify, the 'no bailout' Article 125 of the Lisbon Treaty will not be modified.

Instead, the mechanism will rely on Article 122, which allows for helping EU countries at times of "severe difficulties" like natural disasters or an energy emergency.

Because in such cases there would be no transfer of competence, there is no need to call referenda in those countries "which are fond of such exercises".

Irish Prime Minister Brian Cowen described the discussions on a permanent crisis resolution mechanism for the euro zone as "productive" and said European Council President Herman Van Rompuy would consult the member states on "any necessary limited amendments" to the Lisbon Treaty.

"It's very clear that what's envisaged is a targeted and limited approach. The Treaty specifically provides for a lighter mechanism to be used when changes are required that does not involve the transfer of any competence from the member states to the Union," he stated.

On the Franco-German proposal to suspend the voting rights of an EU country in violation of the principles of the euro zone, Cowen diplomatically said this would be examined at the next EU summit in December – though on Thursday he stated that the idea was "not a runner" for Ireland.

Asked whether treaty change would require a referendum in his country, the Irish leader said this would only become clear once the details had been agreed in December and the case had then been examined by legal experts on the Irish constitution.

Spanish Prime Minister José Luis Rodríguez Zapatero welcomed the fact that a consensus would first have to be sought among all member states before the suspension of voting rights could potentially take place in the event of budget indiscipline.

He added that he didn't think this would happen except for under "very exceptional circumstances".

Italian Prime Minister Silvio Berlusconi welcomed the fact that "only an amendment" would be necessary in order to create a permanent system for handling sovereign debt problems. He also claimed to have suggested creating the system back at the October 2008 EU summit.

Romanian President Traian Basescu said that he had proposed at the summit, that instead of punishing EU budget-sinning countries by stripping them of their voting rights, “automatic sanctions” could be applied instead.

 “Instead of deciding the suspension of vote at Council level, where the decision is political, to me it seems more appropriate if the European Commission would […] trigger an automatic sanction like one per cent of the [country’s] GDP. Or the country could be sanctioned, by cutting 1 billion euros from planned EU funding,” he said.

Speaking to a small number of journalists in Brussels, Basescu said that stripping a country of its voting rights was humiliating, while being fined one billion euros was more effective.

Better than a political sanction, a properly applied economic sanction is more adequate, he advocated.

France and Germany last week proposed setting up a permanent system to handle crises in the euro zone, admitting that doing so would mean changing the EU treaty.

joint statement issued on 18 October by French President Nicolas Sarkozy and German Chancellor Angela Merkel in the French town of Deauville said they agreed new rules were needed to address problems like the sovereign debt crisis that hit Greece earlier this year.

The Deauville paper foresees "in case of a serious violation of basic principles of Economic and Monetary Union, and following appropriate procedures, suspension of the voting rights of the member state concerned".

The proposal divided EU foreign ministers at a meeting on Monday (25 October), with several voicing strong opposition to the plans.

Since then, the question of suspending voting rights as a last resort has divided EU countries.

EU Council President Herman Van Rompuy was invited to consult with member states on "a limited treaty change" and to "subsequently examine […] the issue of the right of euro area members to participate in decision making in EMU-related procedures" when they threaten the euro zone's stability.

The former Belgian prime minister will present his proposals in time for the next EU summit on 17-18 December.

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