This is looking more and more like the break-up of the euro zone. I know it’s difficult for the member states to agree on everything, and therefore they have to find compromises from case to case that not everybody is equally happy about. But when it comes to setting a date for an extraordinary important summit to discuss the increasingly threatening economic and political situation, they should at least be able to agree on a date. But no. Because of the French-German economic plans that has been drafted without anyone else involved, other EU members are now protesting by refusing almost any decisions made by the administration in Brussels.
“All countries should participate in the discussion, and there should be no groups created leading other countries.”
Setting the date for the extraordinary March summit of euro zone leaders is about to become impossible, as hostility grows amongst member states towards the fiercely conservative Franco-German proposal for economic convergence. The first top leaders summit since the 2008 crisis meeting, was originally set to March 13. But now the date is set to “floating.”
EU Council president Herman Van Rompuy have told MEPs and chiefs of the parliament’s political groups that the 17 premiers and presidents of the euro zone countries are to meet “mid-March”, ahead of the normal EU-27 spring summit on 24-25 March, the EUobserver reports.
However, one EU diplomat says: “It’s a date that was floated, as it fits the schedule of President van Rompuy.”
There has been no official confirmation however.
Agence France Presse reports that one major member state has ruled out March 13 as “impossible,” and favor March 11 instead.
The EU leaders was supposed to discuss a proposal from Berlin and Paris that would force European states to adopt a common corporate tax base, harmonize retirement ages, eliminate indexation of wages to inflation and hard-wire limits on government debt via constitutional amendments.
But as the March summit looms, opposition to the proposal is growing.
On Tuesday, Italian foreign minister Franco Frattini announced Rome’s dissatisfaction with both the ideas in the proposal and their source in the Paris-Berlin duo.
He said that it is premature to be discussion EU level tax harmonization and constitutional changes.
“There are issues in the pact that Europe is not ripe to solve yet, this includes for example harmonization of taxes and tax systems,” he said during a visit to Prague, Reuters reports.
“Taxes are probably one of the most sensitive issues. Frankly speaking, I believe it is premature to have even an agreement in principle on harmonizing taxation. All countries should participate in the discussion, and there should be no groups created leading other countries,” he added.
“We will not allow our social model to be undone,” Belgian Prime Minister Yves Leterme says.
Luxembourg prime minister, Jean-Claude Juncker, (who is also the chairman of the Eurogroup of finance ministers), says he don’t think “abolishing the indexation of wages should improve the competitively of my country or of the euro area.”
EU budget commissioner, Poland’s Janusz Lewandowski, describes “nervousness” over the plans in an interview with the UK newspaper The Times. Adding that developments are being watched with some nervousness in Warsaw and other capitals. “We need a discussion on how to avoid a two-speed Europe,” he says.
Meanwhile, economics and monetary affairs commissioner Olli Rehn – one of the key architects of austerity plans imposed on Greece and Ireland in return for EU bailouts – offer his support to the Franco-German plan.
“The competitiveness pact is broadly in line with proposals in the growth survey,” he said at a meeting at the American Chamber of Commerce.
Acknowledging the criticism, French finance minister Christine Lagarde underlines that the rules for individual countries do not have to be identical.
“The Franco-German proposals have been debated and have given rise to some statements, sometimes to some reservations,” she says.
The goal is not to that everyone in every European Union country will have to retire at the age of 67, Ms. Lagarde points out.
“Nor are we going to, from one day to the next, fix as an ultimate objective for all the countries in the euro zone to agree on an average corporate tax rate of 25 percent,” she adds.
Related by the Econotwist’s:
- Anger And Mystery Evolve Around French-German Economic Pact
- Europe: A Lehman Collapse in Slow Motion, Former Lehman Banker Says
- Are We Facing A Political Crisis, Too?
- 2011 Key European Issue: Politicians And Politics
- Europe In Debt (Part 3): Exit On Main Street
- Europe In Debt (Part 2): Poisonous PIIGS With Toxic Lipstick
- Europe In Debt (Part 1): Creating a Monster
- “We are all witnesses to the game.” (sluggerotoole.com)
- UPDATE 2-EU’s Juncker says Greek debt buyback worth considering (reuters.com)
- WRAPUP 2-Anger simmers at German austerity plan for EU (reuters.com)
- Italy says Europe not ready for tax harmonisation (reuters.com)