Cameron talks treaty change with EU chiefs

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UK Prime Minister David Cameron held a series of discreet talks with top EU officials in Brussels on Friday (18 November), with treaty change featuring prominently in the agenda, sources told EURACTIV.

En route to Germany where he was expected to meet German Chancellor Angela Merkel, Cameron had breakfast with European Commission President José Manuel Barroso and held separate talks with European Council President Herman Van Rompuy later on.

Sources from both the Commission and the Council said that treaty change had featured prominently among the issues discussed.

At the next EU summit on 9 December, Van Rompuy is expected to table an interim report on consultations he is holding regarding a possible change of the EU treaties, as requested by Merkel.

In the German perspective, a treaty change should allow enforcing stricter budget discipline in the euro zone, and could include provisions to expel countries from the single currency bloc.

Other sources suggested that treaty changes could include a clearer mandate for the European Central Bank to intervene on the sovereign bond market in order to ensure the stability of the euro zone, something that Germany has so far resisted as infringing the ECB's mandate.

Merkel found an unexpected ally in David Cameron, who jumped on the opportunity to back her on treaty matters in exchange for guarantees that the UK will continue to have an explicit opt-out from tighter fiscal rules in the European Union.

Open Europe, a Eurosceptic British think-tank said "Cameron will restate his opposition to Franco-German proposals for a financial transaction tax and is also expected to urge Merkel to allow the European Central Bank (ECB) to bailout the single currency by acting as a lender of last resort."

The UK Prime Minister also wants guarantees that none of the changes envisaged will hurt London as a global financial center, according to UK officials familiar with the matter. Cameron is said to be prepared to back Merkel's plans to strengthen economic union in the euro zone, on condition he wins safeguards to protect the City of London from European legislation, the Financial Times reported.

Herman Van Rompuy is adopting a more cautious approach, and is expected to make a proposal to change the treaties, based on his consultations, in Spring next year at the earliest.

Barroso confirmed that treaty change was indeed on the agenda, but stressed that this should not distract leaders from taking short term important decisions which do not require a heavy ratification procedure.

“The Prime Minister and President Barroso agreed on the importance of prioritising the decisive action needed to ensure the stability of the euro area as well as fast-tracking measures to stimulate growth and jobs," a UK government spokesman said.

The eurosceptic UK daily Express reported about a leaked memo from the German government, according to which larger eurozone economies which are considered too big to bail out should be allowed to default on their debts, and effectively go bankrupt.

The six-page memo also reportedly sets out plans for the establishment of a new European Monetary Fund that can intervene in the economies of debt-hit eurozone countries.

Sources from the Council and the Commission denied that the "German memo" had emerged at the Brussels talks.

Some EU leaders, including German Chancellor Angela Merkel, have argued that a treaty change could help enforce fiscal rules to avoid repeats of the debt crises plaguing members of the eurozone.

Making changes to the EU Treaty has proven cumbersome. The most recent example was Lisbon Treaty, which was eventually ratified by all 27 member states after heated debate and two referendums in Ireland.

Art 136 of the Treaty on the Functioning of the European Union (TFEU) says eurozone countries may "adopt measures specific to those member states whose currency is the euro", for example to:

  • "strengthen the coordination and surveillance of their budgetary discipline;"
  • "set out economic policy guidelines for them, while ensuring that they are compatible with those adopted for the whole of the Union and are kept under surveillance."
  • 9 Dec. 2011: Van Rompuy to submit "interim report" on treaty change options at EU summit in Brussels.
  • 1-2 March 2012: EU leaders to approve roadmap on how to implement the agreed measures.
  • 2012-2013: Possible end of ratification process.

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