EUROPEAN COUNCIL president Herman Van Rompuy reconvenes difficult talks in Brussels today on new measures to fortify the EU’s economic system.
The talks between finance ministers herald the beginning of a new political season in Brussels after the creation of a €750 billion EU/IMF rescue net for struggling euro zone members four months ago eased the sovereign debt crisis in the single currency area.
Although EU leaders’ prime concern in the coming months will be to avoid a situation in which any government has to make use of the EU/IMF scheme, they fear any failure to improve the system of economic governance would store up serious fiscal problems.
Tasked with strengthening an economic rulebook whose existing provisions were routinely breached by major member states, Mr Van Rompuy has been trying for months to find common ground on the steps required to toughen the regime.
Minister for Finance Brian Lenihan will represent the Government at the talks. On the sidelines of the meeting, Mr Lenihan will discuss the Anglo Irish Bank rescue scheme with EU competition commissioner Joaquín Almunia.
The ministers and their leaders have already agreed to submit draft annual budgets to Brussels in April of the preceding year, but knotty questions over the extent and scope of new sanctions remain to be resolved.
But the big powers remain divided on such questions, particularly over German demands for the suspension of voting rights at EU meetings for finance ministers whose governments persistently breach European budget rules.
Although chancellor Angela Merkel shows scant sign of backing down from that demand, her fellow leaders have no appetite for a proposal that would necessitate any change to the EU treaties.
Given the systemic weakness in EU controls that was exposed by the financial crisis in Greece, most governments agree that new sanctions are required to give teeth to budgetary surveillance in Brussels.
Ministers are divided, however, on the question of whether sanctions should be imposed automatically or whether the EU authorities should retain a level of discretion. There are divisions, too, over proposals to use a withdrawal of EU structural funds as a form of sanction, as such a penalty would have no bearing on the wealthy countries that do not receive such funding.
With little sign in advance of today’s meeting that any ministers have changed position since their last discussion, Mr Van Rompuy has indicated he will make an interim report to EU leaders on Thursday week when they gather in Brussels for the first of three planned summits before the end of the year. Sources say it is only after this summit that Mr Van Rompuy will push for a final deal on an overall package of measures. They also say Mr Van Rompuy hopes to achieve agreement in time to make a formal submission on the overall package in time for the leaders’ autumn summit at the end of October.
This chimes with plans by the EU economics commissioner Olli Rehn to produce a definitive set of proposals on sanctions on September 29th.