Wednesday 7 December 2016

Germany, France now appear to be running Europe on their own

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Emmet Oliver

Published 17/08/2011 | 05:00

THE demand by France and Germany that eurozone members legally commit to balancing their budgets emerged not from the 17 members themselves, but from the zone's two largest members after a private meeting.

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This is now increasingly the way Europe, and the eurozone in particular, is governed and run. A Franco-German position is formulated in private to solve a certain problem, a meeting is held in private to finesse this position, and then the conclusions are presented in public to the other members very much as a fait accompli.

This approach -- of France and Germany effectively instructing other eurozone members -- has been in evidence for several months, most notably in February when again France and Germany proposed a "pact for competitiveness'', including the original germ of the idea to force countries to balance their budgets.

While there is a large and powerful body for deciding on major European decisions -- the European Council -- increasingly this body is simply acting as a rubber stamp of Franco-German proposals.

This is despite the fact that the European Council is meant to be the chief crisis-solving body of the EU.

While there are specific eurozone bodies -- the Eurogroup for instance -- they also appear to be neutered and regularly bypassed by the increasingly aggressive lead taken by Germany and France.

Strategic decisions

Many will argue that as the two largest eurozone economies, France and Germany should not be weighed down by the cumbersome machinery of Europe when significant strategic decisions have to be taken.

But this is to miss the point in the current European debt crisis.

Many of the decisions the two leaders are taking primarily impact, in the first instance, smaller peripheral economies such as Greece, Portugal, Ireland, Spain and now the larger Italian economy.

Consultation with these countries before yesterday's summit seems to have been minimal.

This seems at the very least undiplomatic, considering countries like Ireland will have to hold a constitutional referendum to make the debt-limit proposals a reality.

Likewise with corporation tax -- while the announcement from Merkel and Sarkozy strictly refers to a tax on company profits in their own countries, it's impact will be widespread.

Yet the proposals are simply to be implemented by 2013 without apparently much discussion.

Irish Independent

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