EU OFFICIALS are making tentative plans for a “convention” next spring to draw up changes to the Lisbon Treaty to establish permanent measures to settle sovereign debt crises in euro-zone countries.
The development, which could lead to another referendum in Ireland, follows the decision of French president Nicolas Sarkozy to back a push by German chancellor Angela Merkel for new legal powers to fortify the EU’s economic system.
At their autumn summit next week, the German and French leaders will ask their EU counterparts to ask European Council president Herman Van Rompuy to prepare the ground for a narrow revision of the treaty to create a permanent bailout fund and new procedures for a renegotiation of sovereign debt.
They also say there should be new powers to deprive a country of its EU voting rights if its government persistently breaches newly reinforced budget surveillance rules.
Ireland’s response to the Merkel-Sarkozy initiative was sanguine, although it is no secret there is little appetite in Dublin for measures that would necessitate another referendum in the short term. “We look forward to hearing more concretely from France and Germany what their proposals are,” an Irish official said.
As British officials expressed scepticism about the Franco-German plan, certain European diplomats said the initiative was likely to run into resistance from fiscally weak member states who stand to lose their voting rights if they do not balance their books.
But even though diplomats from several member states argued that the Franco-German intervention was “premature” and served to overshadow a deal reached in Luxembourg on a new financial sanctions regime, there was widespread agreement that EU leaders would find it very difficult to rebuff Dr Merkel and Mr Sarkozy. “There will be a mandate for Herman Van Rompuy at the European Council to organise all that,” said an official close to Belgium’s EU presidency of next week’s summit meeting.
“As far as the timetable is concerned, I think everybody sees spring next year as the moment to bring together a convention to go forward with the formal lines of change.”
In the first instance, Mr Van Rompuy is likely to be asked next week to submit a written report to the March summit of EU leaders.
Under provisions in the Lisbon pact, the leaders can ask Mr Van Rompuy to lead a convention involving EU leaders, the European Commission, MEPs and national legislators to examine treaty change. The European Central Bank would also be consulted.
Dr Merkel said the measures she is seeking are necessitated by the fact that the ad-hoc bailout scheme for any distressed euro country will expire in 2013 and will not be extended.
“That’s why we must take steps on what to do next. We agree that we need a rescue mechanism that is lasting, but different,” the chancellor said in Deauville.
However, diplomats have long expressed the view that any reopening of the treaty could open the floodgates to competing claims for change from member states during negotiations.
In the Luxembourg talks the provisions on financial sanctions were watered down at the behest of France and Germany to allow greater political discretion over sanctions and additional steps in the process for penalising errant governments.
This led to political criticism of Berlin and fears among senior EU officials that the new system would not be as robust as initially hoped.
“I’m a little bit surprised that we did not have the full 100 per cent backing for fiscal discipline from Germany. We could have reached a little bit further,” said Sweden’s finance minister Anders Borg.
Sarkozy and Merkel union just too powerful to ignore: page 14; Editorial comment: page 15